Is Big Oil Cutting The Price At The Pump To Kill Clean Energy?

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Wow! If pump prices keep falling at this rate, you’ll be able to fill your tank for no more than the cost of a loaf of bread within a few months. I mean it’s right there in black and white headlines. “Oil prices keep falling despite high consumption.” And ain’t that grand? How low can you go?

And don’t you worry that pretty little gas-consuming head of yours about whether there’s enough oil out there to keep that monstrosity of an SUV running for the next few decades. An Associated Press reporter has crunched the numbers and confidently tells us there’s enough liquid dinosaur hydrocarbons out there to keep us filled up for long, long time. So there!

Oops! Did I just repeat one of the oldest and most-believed urban and rural legends of the millennium? Let me correct myself. According to the prevailing scientific view, Dinosaurs have nothing to do with oil. Repeat; Dinosaurs have NOTHING to do with oil. Credit your gas’go go’ juice to single-celled bacteria. You’ll have to drag out your electron microscope to get a peek at one. Then you’ll have to strap on your goggles and make your way to deep into the sea for extraction. For the record, the reporter said nothing about Dinosaurs.

This bacterium is estimated to have come along some 3 billion years ago, pre-dating even Betty White. Huge mounds of the stuff were formed and Shazam!!! Some bright geological folks found a way to convert these colonies of hydrocarbon, that in turn provided the ethane that fuels the wonderfully profitable industry called oil and its assorted spinoffs.

But I digress. This piece isn’t really about the origins of hydrocarbons, methane, sediment, molecular hydrogen and all that good stuff. I mean the pundit hoi polloi is here to politically inform, not to bury you in geophysics. No, my contribution is much more conspiratorial than that. A number of reasons have been postulated for the steep dive in oil prices that has resulted in all those smiles at the pump.

Let’s use another current headline to get us started on the path to the oil industry’s subterfuge; “Report: Wind tops drilling as job creator.” The advocacy group Oceana concluded that wind energy development along the Atlantic coast would create twice the jobs and twice the energy of drilling for oil. The numbers are wind; 82,000 jobs compared to 36,000 jobs from oil drilling. Here’s the report in its entirety from the Oceana site. So things are looking up for prospects of successful wind energy development.

Solar is also on the move. Back in October of last year, Bloomberg’s special Internet feature on the future pricing of solar almost nailed the true reason for the current artificially low oil prices with their opening line from an article on the diminishing cost of solar. Here’s the line: “Every time fossil fuels get cheaper, people lose interest in solar deployment. That may be about to change.” The author, Tom Randall, goes on to point out that solar energy is on track to be as cheap or cheaper than the average electricity bill in 47 states by 2016. His information comes from a report by Deutsche Bank that had been just released.

The figures were based on the assumption that the feds continued their 30% tax credit on system costs, a credit set to expire in 2016. You talk about a holy congressional war when that date nears. The report indicated that even if the credit dropped to 10%, 36 states would still pay the same or less for solar. And that’s assuming nothing happens within the technology to further lower prices.

Even Neanderthal red states are starting to recognize the job producing potential of alternate energy sources. Arkansas has a sweeping base of corporate incentives, some as high as full income tax forgiveness. The University of Arkansas at Fayetteville features “The National Center for Reliable Electric Power Transmission” R & D research center concentrating on the high-voltage transmission side of electric power as applied to renewable energy connections to the grid. Other states equal or exceed these efforts.

Alternative renewable energy sources abound and they’re being researched and developed at a record pace. Soooooo, let’s go back to that first line of the Bloomberg article; “Every time fossil fuels get cheaper, people lose interest in solar deployment. That may be about to change.” That last sentence is anathema to all that the extraordinarily greedy and powerful oil gods hold near and dear in their corporate monolithic monopoly of energy production. For these folks, this competitive intrusion must be stopped, or, at the very least, delayed for as long as possible.

The public reasons given for the drop in oil prices is best summed up in the Christian Science Monitor to include soft demand, government intervention, cartel manipulation and high barriers to entry. A Chicken Little prediction of as low as $20 a barrel by Reuters has been bandied about.

Let’s appeal to your inner reason. If things are falling apart as virtually all experts contend they are, here are two key questions. Why are the major corporate oil players fighting the business equivalent of a World War to drill for more oil in every available space on earth, land and sea? If oil is going to be such a losing proposition for the foreseeable future, why waste literally billions on highly expanded and continued drilling for the stuff?

Why? Let me tell you why. The big boys can keep prices repressed for as long as it takes to disavow the public of the notion of switching over to alternate fuel sources, OPEC and marginal oil prices, notwithstanding. And the big boy utilities recognize that as oil goes, so goes electric. Alternate sources of either is the worst news the respective industries can hear.

Oil won’t lose out completely if America comes to its energy senses. There are plenty of hybrid opportunities out there either through blending; ethanol is already in use and there’s bio-diesel and methanol (if it doesn’t kill you in the process) or as an alternate gas tank within the system.

While big oil is on edge and utilizing every strategy extant to draw the public away from future competition, don’t expect these current pump prices to have much of a shelf life. The second quarter of 2015 will most likely mark the peak in humane pricing, then it’s make-up time. Incidentally, Exxon Mobil made a $20 billion dollar profit in 2009, as pump prices plunged to $1.61 a couple days before the start of the year. Even low pump prices still profit big oil into the billions.

Meanwhile, back at the pump, like sneaking a hot fudge sundae in the midst of a bland weight-loss diet, enjoy, enjoy!

12 Replies to “Is Big Oil Cutting The Price At The Pump To Kill Clean Energy?”

  1. I don’t understand why instead of trying to undermine clean energy these companies aren’t falling over each other to get in on it. Seems to me there is a ton of money to be made, especially for the company that goes first.

  2. I have a wind farm just a few miles from me. A major oil company runs it. Some are in on it, its the republicans that are insane

  3. That is exactly what I’ve been asking? It seems stupid on their part to not take their huge resources and get in on the wave of the future. It seems to me to be very shortsighted on their part miss the opportunity to invest and get away from oil. Of course, they are only interested in short-term profits and like a lot of their supporters, they don’t seem to think very much ahead.

  4. Yes, gas is cheap…but my electric bill went 20% because my electricity comes from a old coal fired plant doing upgrades. I’d love to install solar panels on my house….new houses should all be built with renewable energy sources!

  5. If so they are, they are cutting their nose off to spite their face. This drop in oil prices has far reaching affects most of us have no clue about. Many of the largest international financial institutions are in a panic because their huge investments are all backed by higher oil prices. Those prices drop and those investments are worth a LOT less.

  6. anybody with a lick of sense understands that the low oil prices are unsustainable. only a moron would go out and buy a new gas guzzler because the price of gas is under $2 this week, eventually the prices will go up again, and you will be royally screwed.

    it seems to me the smart thing to do right no is to invest in those alternate energy sources on a personal level, while you have some slack in your budget. then when the inevitable rise in energy prices comes, you will be cushioned because you generate your own.

  7. Of course they are cutting oil prices to compete against renewable and sustainable fuel sources. They did the same thing in the 1920s when competing against fuels made from carbohydrates.

    Henry Ford had a hemp field planted in Iron Mountain, Michigan to make methanol from hemp to run his cars. Prohibition was as much against hydrocarbon fuels as it was against alcohol consumption.

    It’s the same reason why THC is still being listed in the Controlled Substances Act as a Schedule I drug of no medical value. Fuels from hemp can compete with all fossil fuels.

  8. 50,000 gallons of oil spill into Yellowstone River
    BILLINGS, Mont. — Montana officials said Sunday that an oil pipeline breach spilled up to 50,000 gallons of oil into the Yellowstone River near Glendive, Montana, but they said they are unaware of any threats to public safety or health.

    The Bridger Pipeline Co. said the spill occurred about 10 a.m. Saturday. The initial estimate is that 300 to 1,200 barrels of oil spilled, the company said in a statement Sunday.
    http://www.cbsnews.com/news/oil-spill-in-yellowstone-river-in-montana-caught-pretty-quick/#postComments

  9. Let’s talk logistics.

    Why does wind/solar require a distribution grid beyond municipal limits? Or a grid at all?

    Slap some panels up, add batteries and inverters, and off you go. That’s how my yacht works.

    If a storm knocks out your panels, make sure the batteries are charged and deploy the wind turbines. Power on!

    And we wouldn’t need overhead power lines, huge sub stations, miles of wire, telephone poles or power outages.

    Of course the entire Entergy/GE power supply business would collapse like a wet feather boa.
    Collateral damage. Can’t be helped….

  10. They forgot the lessons of whale oil. The most important lesson being: ‘You can be replaced.’

    Fossil fuels are like a landline phone.

    Solar/wind are like a cellphone. Not a smartphone yet, but the cord has been cut.

    The logistics costs of fossil fuel – from raw material to consumer – are unsupportable.
    The process of transforming shale slush from the ground in Canada into cash from the sale of that fuel in Singapore cannot compete with the logistics and manufacturing costs of solar LEDs. Which are portable. No pipelines needed.

    The entire American whaling industry, which launched America into early colonization, collapsed within 20 years, as close to home coal and water replaced it.

    Fossil fuels are now officially ‘quaint.’

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