Vol. 3, Issue #9 May 2nd - May 15th, 2008

The Faulking Truth

For Want of a Magic Wand, the Kingdom Was Lost

By: Mark Faulk
© 2008 Mark Faulk. All rights reserved.

By the time this article comes out on Friday, ExxonMobile will have once again reported record earnings, adding to the string of obscene profits that dates, not coincidentally, back to the beginning of the Bush administration. Every other oil company will follow suit, and President Bush will still be looking around the Oval Office for a mythical magic wand to wave in hopes of lowering gas prices that are crippling our country’s economy.

On Tuesday, Bush blamed the rising cost of oil and gas on Congress, saying “I firmly believe that, you know, if there was a magic wand to wave, I’d be waving it, of course. I’ve repeatedly submitted proposals to help address these problems, yet time after time Congress chose to block them.”

So what are the proposals that Bush has been pressuring Congress to support for the past seven years? He wants to open up Alaskan wildlife refuges to oil drilling and allow construction of more nuclear and coal plants. It is nothing more than the continuation of a horribly rigged energy policy, implemented almost the day the Bush took office. This policy was conceived by ex-Halliburton CEO turned vice-president Dick Cheney, and the same oil companies who have been putting the screws to America for years.

In January of 2001, only four days after promising to “work to build a single nation of justice and opportunity” in his inaugural address, Bush established the National Energy Policy Development Group and appointed Cheney as chairman. Before long, the commission became known simply as Dick Cheney’s Energy Task Force, and put together a policy that set into motion a series of events that is largely responsible for bringing what was once the most prosperous economy in the world to the brink of ruin.

Cheney assembled a group of experts that included internationally respected energy investment banker Matthew Simmons, who had been speaking out about the imminence of Peak Oil for years. “Peak Oil” is the name given to an inevitable event where half of the world’s oil and gas reserves have been used up. At that point, the eventual scarcity of oil and gas becomes a foregone conclusion, and the price almost certainly can only go up…that is, unless lower supplies are offset by lower consumption or alternative sources of energy.

In fact, oil production in the United States peaked in 1970, and most experts expect world production to peak around 2010. And since the United States uses an astonishing 25% of the world’s oil supplies, we bear the largest responsibility to address the problem or face the consequences. Simmons has been speaking out about Peak Oil for years, and it is a certainty that he used his time with Cheney to warn about the rapidly approaching crisis facing our world.

So how did Cheney respond to the crisis? Did he call for increased conservation or a greater emphasis on renewable sources such as wind, solar, hydroelectric, and geothermal energy? He almost immediately brought together his old cronies in the oil industry, conducting a series of secret meetings that put in place a national policy that ignored impending problems and instead became an obscene giveaway to the major oil companies at taxpayers’ expense.

Other environmentalists concerns were disregarded as well. By the time thirteen representatives of environmental groups were invited to the White House to voice their concerns in early 2001…a meeting that Cheney didn’t even bother to attend…over forty meetings had already been held with energy industry representatives. While Cheney and the White House have for the most part been successful in fighting efforts to release information about those secret meetings, it is known the list included major Bush donors such as Exxon vice president James Rouse and Enron’s Kenneth Lay. Also invited to closed-door meetings were representatives of over twenty oil companies and three dozen industry trade associations, including the American Petroleum Institute, The National Mining Association, and the Interstate Natural Gas Association of America.

The results of those months of secret meetings, and the policy pursued ever since by the Bush administration, have turned out to be disastrous for our country. Continued assertions by the Bush administration that they are dedicated to reducing our dependency on oil have proven to be nothing more than talk. Oil companies have been given massive tax breaks to “supplement” record profits while all other sources of energy (which the exception of coal and nuclear power, both of which are controlled by big business) have been virtually ignored. And while energy experts like to point the finger of blame at growing demands in China and India, the United States still consumes over three times as much oil as both of those countries combined. Less than two-tenths of a percent of our energy is currently derived from renewable sources, very little has been done to improve fuel efficiency in automobiles or develop an efficient mass transportation system, and we still give more money to ultra-wealthy oil companies in tax breaks than we allocate to developing alternate energy sources.

Recent proposals to deal with the problem, such as suspending the 18.4 cent national gas sales tax for the summer and a suggested one-day consumer boycott of gasoline, are for the most part pointless and symbolic at best. Plus, they do absolutely nothing to address the real issue, which is that the oil companies write their own national energy policy with the blessing of the Bush administration. It is a policy that is threatening to tear our country apart if left unchecked, and a wave of the hand with an imaginary presidential magic wand won’t be enough to put it back together again.

And that’s the Faulking Truth.

(Mark Faulk is the editor of www.faulkingtruth.com and is the author of The Naked Truth: Investing in the Stock Play of a Lifetime, scheduled to be released any day now. The book is available online at www.toginet.com. Join Mark and Paul Faulk every Saturday from 1-2 PM CST on The Faulking Truth X2 Show at www.toginet.com.)

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