There was a staggeringly important article on the front page of the Wall Street Journal on Tuesday. Briefly, it said that the immense run up in oil prices in 2008, from roughly $33 a barrel to roughly $150 per barrel was not caused by an oil shortage, was not caused by an immense upsurge in demand from China and India and Brazil, not caused by bandits in Nigeria.
This finding was from President Obama’s Commodity Futures Trading Commission, hardly a mouthpiece of Big Oil.
The staggering 2008 run up in price, which beggared hundreds of millions of people throughout the world, was caused by the sinister machinations of a few dozen oil traders and speculators in the commodity pits and lush offices of hedge funds and investment banks. (Think Goldman, Sachs at its worst.) The shortage, which terrified innocent people and literally killed the U.S. automotive industry, made a few dozen or maybe a few hundred people very rich. It also made the nation believe we actually faced a major oil shortage. (I was briefly taken in before I realized that nothing in the supply demand situation had changed even remotely enough to justify the kind of price moon shot we had been through. When I wrote that the spike was the work of some oil speculators and I knew their names, one of them sent me threatening e-mails.)
This belief — that we faced an impending end of the supply of oil — was a huge part of the motivation to turn to “green power” sources like wind and solar, to look for ways, even quite radical ways, to control energy use. This totally fraudulent “fact” of rapidly depleting oil resources helped Mr. Barack Obama get elected and is now helping him get his radical cap and trade and energy control bill through Congress. This bill, largely turning U.S. energy production and use upside down and saddling the nation with innumerable regulations — down to small details like having federal regulators mark up or down every home up for resale based on every usage — was based upon a fraud.
Now what? Will someone wake the heck up and say that Mr. Obama is putting through his massive agenda of control in the energy sector based on a hoax? Will Mr. Obama say he’s re-thinking the whole scheme?
If there is no urgent or even semi-urgent need to control oil use (or natural gas usage, since natural gas is now in staggering oversupply), why reorganize an American energy industry that works extremely well already?
Will anyone in the administration get up on his hind legs and tell the truth: the Obama energy plan is based on a “fact” that is now shown to be a fiction? And will anyone have the guts to call the whole nightmare of regulation off?