The oil companies are giving Congress and the Bush administration a golden opportunity to regain some of their standing in the eyes of the voters. Big oil -- which has never been a particularly good citizen -- has overplayed its hand at the wrong time.
Within minutes, it seemed, after the Iraqi invasion of Kuwait, oil prices had jumped at the local gasoline pumps. Never had so many understood so quickly the instant ramifications of an event on the other side of the world. The oil companies quickly seized the opportunity to raise prices so consumers were paying around 10 cents more a gallon by the end of last week than they were at the beginning of the week for gasoline that left the Middle East as crude oil months ago.
Experts say the United States has a three- to six-month reserve. The oil industry's standard response when its price increases are challenged is that it bases its prices on what it will cost to replace the reserves. Thus, with an renegade like Iraqi's Saddam Hussein controlling about 20 percent of the world's oil reserves the companies can pitch the argument that it will cost considerably more to replace stock.
But anyone who waited in gasoline lines in 1973 and, to a lesser extent, in 1979 had plenty of time to do some hard thinking about the oil industry's double talk about just how much oil was where and how much was being released and how much was being horded in hopes of obtaining even higher profits. Probably the one thing that never touches oil from the time it leaves the ground to the time it gets in your gas tank is a grain of truth about how much it costs.
The oil companies, with tentacles in virtually every aspect of the civilized world, have been able to call the shots in the modern industrial era with an arrogance that is unparalleled by any other industry and probably most governments. The United States, which is completely dependent on the oil companies as the source of industrial, home, and transportation energy, can't -- or won't -- stand up to them.
And once again, they have the American people's backs to the wall. The bet here is that the oil companies will continue to jack up the prices and if there is too much heat put on them by the government and the public, we will suddenly have an oil shortage and we will be sitting in gasoline lines venting our rage until we are ready to pay the higher prices. It's happened before.
We have allowed this country to be held hostage by an industry that produces a product vital to our national interests. This makes about as much sense as having the military services or the nation's water supply controlled by private corporations.
The long-range economic welfare of this country is too imperiled by the deficit and by the staggering costs of the savings and loan industry bailout to allow it to be at the mercy of predatory oil companies whose international loyalties are to their bottom line.
Their electrifying response to the Iraqi invasion has brought this home to consumers. Sen. Joseph Lieberman (D-Conn.) called it a rip-off and warned that the oil companies' actions were putting the nation at risk of a recession. Congressional reaction -- for once -- has been swift. Hearings on the price increases began yesterday in the House.
In the long run, what would make the most sense would be to nationalize the oil industry to protect the economy. Our dealings with oil suppliers in other parts of the world would be formulated by a government agency operating in the national interest and not for corporate profits.
Supplies and prices of oil would be modulated in a cohesive national policy that would be designed to enhance economic prosperity. A nationalized oil industry would be in a stronger position to resist international blackmail at the hands of strongmen who use oil as a nuclear weapon in their wars against the rest of humanity.
A nationalized -- and thus politically neutralized -- oil industry would no longer stand in the way of attempts to develop alternative sources of energy such as hydrogen and ethenol. Those alternative methods would further liberate us from an excessive dependence on international oil.
Little has happened in Washington in the last couple of years to make American citizens think that Congress and the administration know what they are doing. Taxpayers are seeing their hard-earned money wasted in a series of scandalously poor, if not outright corrupt, performances by government officials. An aggressive and imaginative government effort to rein in the oil companies and make that industry a positive player in this economy, instead of a constant threat to it, would go a long way toward restoring citizen confidence in Washington.