Gouging in the Name of Peak Oil

PESN
Aug. 26, 2005

Oil companies posting huge profits, taking advantage of the perception of scarcity from Hubert's Peak theory that may actually be mostly hype, considering the known existence of renewable magma oil.

At a time when the price per barrel of oil is reaching record highs, why is it that the large oil companies are also posting near record profits?

Why aren't they using their proceeds to lower the price or address the shortfalls? Why are these companies allowed to get away with this gouging?

According to the Cincinnati Post (ref), Exxon Mobil, the world's largest publicly-traded oil company, announced a 32 percent boost in second-quarter profits, the third-largest increase in company history. Royal Dutch Shell, the world's third-largest oil company, reported second-quarter profits up 34 percent. British Petroleum's were up 29 percent. ConocoPhillips, America's third-largest, reported profits that skyrocketed by 51 percent.

It seems to me that the main reason for this disconnect has to do with the buzz about Peak Oil, which purports that there will come a time when the oil being tapped from known oilfields reaches a climax, and thereafter because the oil will be harder to obtain, the prices must increase. "That is why we are seeing the price increases today", is the punch line of this sky-is-falling story.

In other words, we are not at that point yet, but this future theory is being used as a justification for putting the squeeze on the consumer -- and the economy -- today.

In the course of running a daily energy technology news service, I run into this line of thinking on a routine basis.

Might the oil companies be faking shortages in order to gouge prices in line with this perception?

If oil is harder to get at, then why are these oil companies posting near record profits? I would expect that their profits would be declining, which would force increases to stay solvent, not huge windfalls.

The fact is, there is a very large body of scientific evidence that oil is not the limited resource we once thought it was. (ref) There is a deep-crust inorganic process involving magma near the mantle that appears to be at work in replenishing the many of the deep oil wells from below, so that a well exhausted at one time might have a renewed supply again just five years later.

Of course this does not mean that we should continue burning fossil fuels at the rate we now are as a society. Global warming is also a very well-documented phenomenon, and humans' burning of fossil fuels is an obvious, and correlated, major contributing factor.

The time is long overdue for us to turn to clean, reliable, affordable energy solutions, which are presently being developed worldwide, but which too often languish for lack of adequate funding.

What the major oil companies are doing by profiting so hugely at this time of planetary need is profoundly unethical. I predict that this year will go down as their last hurrah. The days of oil dependence are coming to a close, and their control over our lives will not last much longer.

Clean energy sources are afoot that will enable each home, each business, to be independent from the grid.

Why can't the oil industry use their profits to help bring this new revolution about -- and profit from bringing forward new technologies, rather than continue to be the infamous antagonist they have been for so long?