Just as global warming gains international traction with treaties, targets and timetables the price of oil miraculously drops. A coincidence? I think not.
Just as solar, wind, biofuel and electric technologies become more competitive with high-priced oil and gain wider adoption worldwide the price of oil miraculously drops. A coincidence? I think not.
Big Energy, the oil and gas industry, has had its foot on the neck of the developed world for a very long time, and it knows all the ins-and-outs of making barrels of money. That oil prices suddenly drop to mid-$50-a-barrel while investment, supply and production increase shows Big Energy knows how to use the powerful weapon in its hands. As oil prices decline the value of alternative energy companies begin to collapse, their product no longer as competitive therm-for-therm. Some very innovative and brilliant young companies are going to be picked up by Big Energy at rock-bottom prices in the year or two to come.
As for the economies of countries dependent upon high oil prices, like Venezuela? They too will become vassals to the Big Energy syndicate. Facing economic failure, some political regimes hostile to Big Energy will be replaced with new and favorable regimes, which will enjoy the financial largesse Big Energy capital and projects provide. The global political order will hew to the common-denominator – energy prices – and the Big Energy masters of the world will demonstrate the hardball practice of power.
There are those who will say “market forces” are simply at work; supply has increased beyond demand, and thus the price has dropped. The problem with this naïve line of logic, however, is that Big Energy controls both the market and the forces. Americans are not going to complain about lower gas prices; to the contrary, most people are not obsessively thinking about Big Energy’s global squeeze-play as they fill their tanks for under $2.80/gallon.
A year or two of lowered profits at Big Energy is no big deal when compared with the chance to squeeze their competition out of the market for what might be another 25 years or more. We are talking about a TRILLION dollar industry here, not some five-and-dime operation with empty pockets. Big Energy knows their shareholders will hang in there for the ride, bumpy as it may appear to the uninitiated. Once the squeeze-out period has passed and Big Energy has consolidated the new technologies into its food-chain, it can feed or starve any alternative energy source at its whim.
Oil price declines from the near-monopoly-like-syndicate of Big Energy forces consumer complicity in the application of naked power. Public opinion, in our democracy now measured by the consumer price index and GNP, takes on the appearance of popular support, adding backbone to national politicians who otherwise, supported by Big Energy money, collude with it to block carbon-regulating legislation and provide new tax breaks.
When it’s all over, the well-established hegemony of Big Energy will be renewed. Innovation and energy competition will have been savaged, restive national economies brought to their knees, global corporations and politicians rewarded for their loyalty, the myth of supply and demand reified, and attention to global warming pushed aside by fears of deflation. All it will cost Big Energy is a few trillion and what’s that among friends?