Monday, August 14, 2006

Pain at the Pump?

We are all impacted by the recent as well as long term increases in the cost of energy as it affects the costs of transportation of all the products we need. The recent spikes in prices of oil and related products are often blamed on "gouging" (by privately owned corporations) which is a favorite term used by politicians and others who are ignorant of economic realities. What the leftist politicians do not want you to know is that the major contributors to this situation are the environmentalists and their puppets in the federal and state governments as well as the thugs in charge of many third world countries.

EXXON MOBIL is the world's most valuable listed private company, with a market capitalisation of $412 billion. But if you compare oil companies by how much they have left in the ground, the American giant ranks a lowly fourteenth (much of this reserve capacity is controlled by so called "democratic" governments held hostage by environmentalists who preclude exploration , production and refining). All 13 of the oil firms that outshadow it are national oil companies (NOCs): partially or wholly state-owned firms through which governments retain the profits from oil production.

One result of government ownership of oil supplies, is that they manage oil fields as well as production, refining and distribution less efficiently than privately owned firms, resulting in less oil for everyone. The national oil companies are not really investing and developing oil fields, they are using the energy reserves as political assets to maintain political power and line the pockets of despots around the globe.

There are roughly 60 national oil companies worldwide. Nearly half of them own reserves outside their home country, or hold ambitions to do so.

Our friends the Cuban communists are on the verge of developing oil production in the offshore waters of the Gulf of Mexico and the Florida Straits which are off limits to U.S. companies due to laws enacted at the insistance of the Sierra Club and other environmental lobbies. By the way, the current price of gasoline in our friend Hugo Chavez's Venezuela is $.12/gallon. ΛΕΟΝΙΔΑΣ has purchased diesel fuel there for $.06/gallon.


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