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 The
O'Reilly Fiction
The Big Oil cabal…
[by Mac Johnson] 4/25/06
I have a
friend who is fond of the saying, “Analogy is the lowest
form of reason.”
Perhaps --
but conspiracy theory is not far behind. There is something
really emotionally satisfying about the idea that bad things
are all part of a plot and you know who the plotters are. To
start with it’s simple. There’s no need to study
macroeconomics or history or anything else with a lot of math
or footnotes involved. Your answer is as understandable as
the last episode of “Survivor.”
And like “Survivor,” it’s
excellent theater. Every good story has a bad guy, and fighting
bad guys is what defines a good guy. That’s why Hollywood
churns out conspiracy theory driven adventures by the dozen.
There are, of course, some real conspiracies in our world.
But nothing like the number that people believe.
Contributor
Mac
Johnson
Mac
Johnson is a freelance writer and biologist in Cambridge,
Mass. Mr. Johnson holds a Doctorate in Molecular and
Cellular Biology from Baylor College of Medicine. He
is a frequent opinion contributor to Human
Events Online. His website can be found at macjohnson.com [go
to Johnson index]
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The most popular conspiracy theories all involve a confluence
of politics and money: the trilateral commission, the Jews, the
freemasons, corporate evildoers. These are the motive forces
of history to simple minds -- or to those wanting to manipulate
such simple minds.
I’ll let you decide which category Bill O’Reilly
falls into, but as his latest
column demonstrates he is a big
proponent of the idea that high gas prices -- which are a violation
of your inalienable right to be insulated from market forces
-- are the result of a “cabal” of “Big Oil” “fat
cats.” I believe Hugo Chavez holds a similar belief.
Mr. O’Reilly rejects the notion that high gasoline prices
are related to simple supply and demand, stating: “Gasoline
supplies are at an eight year high, according to OPEC. There
is plenty of gas selling on the open market, more than enough
to meet the worldwide demand. So rising gas prices are not a
supply and demand issue.”
That would be fabulous
proof of a cabal, if only gasoline were a raw material -- as
Mr. O’Reilly pretends to believe.
But gasoline is not pumped from the ground or drained from maple
trees. It is a manufactured product made out of crude oil and
I believe that crude oil is somewhat more expensive than it used
to be.
To understand 90%
of everything one needs to know about gasoline prices, all
one has to do is examine the following chart. Drawn
from data secretly compiled by the Energy Information Administration,
which I found on the Internet, it shows the price of the four
major factors (not O’Reilly Factors, mind you) that actually
determine the cost of gasoline: 1) crude oil, 2) taxes, 3) refining,
and 4) distribution and marketing.
Let’s see if
we can figure out which one of these factors has somehow changed
recently.
Is it taxes? Nooooooo.
Although they remain a huge part of the cost of gasoline, they
have crept up only slowly in the last
three years. Taxes cost you about $0.42 per gallon on average.
So the next time you hear Sen. Chuck Schumer (D.-N.Y.) worrying
about the price of gas having an impact on “working families,” such
as those who I imagine work for him, just remember that the Federal
government could lower the price of gas $0.184 per gallon overnight,
if it simply suspended the excise tax it impacts upon those poor
working families. State governments could reduce the cost by
more than $0.22, if they really wished to.
Is it marketing and
distribution making prices rise? Nooooooo. Although advertising
on “The O’Reilly Factor” undoubtedly
is expensive and delivering gas to every street corner in North
America is quite a feat, these items are only a small part of
gas costs: just $0.11 per gallon this last March. That’s
pretty amazing when you consider the post office can’t
get a lightweight and non-flammable letter to your neighborhood
for less than $0.39.
Well then, maybe it
is refining costs that have made gas so expensive. You’re
getting warmer. Refining costs shot up noticeably after Hurricane
Katrina, since several refineries
were knocked out by the damage to the Gulf Coast. Most of our
refineries are concentrated there because people on the East
and West Coasts are too good to have to look at them. To ease
the Katrina price crisis, the government suspended all sorts
of very important and wise rules telling the petrochemical engineers
that run the refineries how to best make gasoline. The price
then dropped suddenly, proving that regulation does not affect
cost much.
But now the rules are back in place. And the government added
some new ones. Most fuel in the U.S. must now contain ethanol,
which is expensive, cannot be transported in pipelines and is
a pain
in the barrel to work with. So costs have gone back up,
and then up some more.
Well that just leaves
crude oil costs. Have they gone up? Well, yes, apparently they
have. In the three years in question they
have gone from about $0.70 per gallon to $1.34 per gallon --
a 91% increase. Perhaps the rise in crude oil prices was an underreported
story, and thus missed by Mr. O’Reilly? Together with the
increased costs of refining by Congressional committee, the increase
in crude oil prices totally explains the price of gasoline, without
the need to examine if Exxon had a second shooter on the grassy
knoll.
However, Mr. O’Reilly rejects the idea that the price
of crude should affect the price of gasoline, because it is just
a “paper price.” I’m not sure what other sort
of price he thinks there is (a “street price,” perhaps?)
but Mr. O’Reilly, a graduate of Harvard, thinks that the “paper
price” is some sort of new-fangled hocus pocus created
by speculators: “These speculators operate in the so-called
commodities markets. They gamble on where the price of oil and
other tangible assets will be months from now. These Vegas-type
people sit in front of their computers and bid on ‘futures’ contracts.”
What are these fancy “commodities markets” of
which he speaks? Are the Zionists involved?
Of course, these newfangled “futures” contracts
that Mr. O’Reilly has uncovered aren’t just bets
made by “Vegas-style” people removed from reality.
They are binding contracts and the buyers of these contracts
agree to buy oil at the high prices that we bemoan. They lose
their butts if they just bid up the paper price for no reason.
I would encourage Mr. O’Reilly to enter the futures market
and bet against these crazy Vegas-type speculators with his amazing
insights into cabals and paper and so-called markets.
But if you must have high crude oil prices explained by conspiracies,
then here is a partial list:
1. The Chinese. This
is an insidious plot of 1.3 billion people who are tired of
living in huts, eating dirt and riding bicycles.
They have demonically entered the world economy in a major way
and earned so-called “money,” with which they have
bought so-called “motor vehicles.” This has driven
up the paper price of oil. The “Indians” are also
involved in a similar plot.
2. Petro-nut jobs. This conspiracy involves the leaders of
major oil producing countries, like Iran and Venezuela and Saudi
Arabia and Iraq, pretending to be crazy or unstable. This makes
people want to foolishly stockpile oil or oil purchasing rights
against future uncertainty. Thus driving up the paper price of
oil.
3. Corn farmers. This conspiracy involves large corn farming
corporations, which have convinced most people that ethanol,
made from corn, can replace oil from petro-nut jobs. This ignores
the facts that it takes more energy to make corn ethanol than
it contains, and that, if the entire corn crop of the United
States were turned into ethanol, it
could replace only 2.5% of
the gasoline we currently use. If you still want to eat, though,
corn will have to replace something less than 2.5%. Adding this
wonder fuel to gasoline has driven up its so-called paper price
at the pump.
4. Environmentalists. This open conspiracy works to make sure
we cannot drill for oil in America and thus increase supply and
decrease price. This cabal also works to make sure that any large-scale
alternative to oil is considered bad. Coal is bad. Natural gas
is bad. Nuclear is bad. Hydropower is bad. Even wind is bad,
if it blocks views or harms birds. Solar is good, but will become
bad as soon as it is more practical. Restricting energy supplies
can drive up the imaginary paper price of so-called gasoline.
5. Congress. This is a conspiracy composed of a race of supermen
who know everything. They know who you should hire, how much
water a toilet should use, and where roads or yodeling museums
need to be. They know how much you should earn, how much sugar
belongs in ketchup and what the fuel of the future will turn
out to be. They know how to make baseball better, schools smarter,
bread yummier, and democracy more stable. They know what seeds
to plant and cows to milk and trees to cut and businesses to
smile upon. They know how much high gas prices hurt working families,
how big those families should be, and how many hours they should
work. They know everything -- including how you should really
make gasoline. Such knowledge is not cheap and thus drives up
the price of gasoline, at least on so-called paper.
6. Folks. Folks love to drive big cars, and to be warm, or
cool, and to have lights and possessions. This conspiracy drastically
increases demand without regard for supply. Thus increasing the
so-called price on so-called paper.
There you have it.
High gas prices are the result of conspiracies. I hate to break
such bad news, but I’m just looking out
for you, the folks. Somebody has to -- you’re never going
to get the truth about “Big Oil” from “Big
Talk.” ONE
First appeared at Human Events Online
copyright
2006 Mac Johnson
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