Don't Turn Your Back On Norway
June 16, 2000 8:15 am EST

WASHINGTON (CBS News) - Bewitched, bothered and bewildered by soaring gasoline prices? Don't hold your breath waiting for the straight poop from our public servants. As Eric Engberg points out, not even OPEC knows what it's doing.

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Everyone knows that mixing gasoline and fire is a recipe for disaster. Less well understood is how dangerous - and silly - it is to mix gasoline with politics. As retail prices for gas nudge above $2 in parts of the country, some of our public officials are learning what a potent and uncontrollable brew you get when you try to play standard political games with gasoline. Judged by Reality Check standards, none of them has looked particularly good.

There are two fundamental reasons why gasoline and politics are so volatile together:

1. As the authoritative publication Petroleum Economist reported this week, Americans seem to view cheap fuel for their cars as a "constitutional right," even though motorists in the rest of the world have long ago come to terms with prices above $2 a gallon. Politicians, being politicians, pander to this view.

2. There is almost nothing that the U.S. government can do to force lower prices. Fifty-five percent of America's crude oil comes from foreign countries. Most of them are currently friendly to us, but they are nonetheless sovereign states that U.S. leaders have limited ability to influence. If you think - in the vernacular of our adolescents - that this "sucks," then just play the FLIP IT game for a minute; look at things from the other guy's perspective.

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Reality Check

How would the American citizenry react if some oil-producing state, say Qatar, delivered an ultimatum to us on a product we monopoliz? One day the Qatari government sends an emissary to the White House to tell Big Bill, "We don't want to pay $12.95 for Elvis CD's any more. We want them for $4.95. If you don't cut the prices, we'll do something bad to you." You get the picture.

For reasons that could only have been related to a bid for partisan political advantage, Energy Secretary Bill Richardson has been on the talk-show circuit since last winter, assuring everyone that the Clinton administration is moving decisively to bring the prices down, and trying to spread a soothing balm of assurance that has been quite spectacularly wrong at every turn.

In February, gasoline averaged $1.36 a gallon nationwide, 44 cents higher than the year before. Ugh. But on February 17, on Good Morning America, Richardson said: "We believe ... that prices will stabilize . . . We will not have excessively high prices."

In March, on the CBS Early Show, Richardson predicted a "modest and gradual decline" in prices at the pump.

In April, responding to Richardson's campaign of "energy diplomacy" and to fears that high crude oil prices might kick off a recession in parts of the world, OPEC, the international cartel, decided to increase production to try to stabilize prices. This news was so welcome to consumers that Richardson's number crunchers predicted gasoline prices would average $1.46 a gallon for the summer, high but not politically troublesome.

What's interesting about the OPEC decision, in retrospect, is that the producing countries were just as wrong as Richardson about the impact of their decision to turn on the spigot. The producers want prices to stabilize somewhere below $30 a barrel for crude oil, partly because they don't want to encourage the big oil companies to launch a fresh wave of expensive exploration that would undermine OPEC's ability to control prices. Nor do they want oil to be so costly that consumer nations start pushing development of alternate energy sources.

But even the control freaks at OPEC have trouble lowering prices when demand won't go down. And that is what is happening now. Consumers have money, due to a roaring economy, and they are willing to spend it to be able to take their cars out whenever they want.

There is another OPEC meeting coming up June 21 in Vienna, and Richardson and other American policy makers can only hope that the producers will open up the spigot still more. Otherwise, the issue of who let gas prices soar out of control - with the usual finger pointing - likely will be a centerpiece of the November campaign. For Richardson this would be doubly bad news, because he has legitimate designs on a possible vice presidential selection.

I mentioned earlier that gasoline makes politicians say things they otherwise would think twice about. Here is a classic example. Rep. Donald A. Manzullo , R-Ill., has branded the oil producing cartel "an international criminal conspiracy" and demanded that the administration do something to break it up. Saudi Arabia and Kuwait, he says, should "hang their heads in shame" because if we hadn't defended both of them against Iraq in 1991, they'd be living under tyranny.

What Rep. Manzullo conveniently left out of this tirade - and what few people seem to know - is that Norway, a staunch NATO ally; Mexico, a vital hemispheric security partner; and Venezuela, a producing state that has been very responsive to American wishes in the energy area; are all taking part in the current price manipulation scheme. We rely on democratic, responsible nations like these to advance America's political and diplomatic interests. No one wants to say it out loud, but there is no way to strong arm them into bringing down oil prices without gumming up our entire position as a world leader.

SOURCES: Copyright 2000, CBS Worldwide Inc., All Rights Reserved.


-- Reality Checker (reality@checker.con), June 16, 2000

Answers

True how spoiled we are in this country. We can put tarrifs on our exports to other countries without a thought to how it effects or what harm it causes their citizens, yet we demand our Government "do something" if we become inconvenienced. Twice now there has been a generation of Americans who tightened their belts and changed their driving habits when fuel prices went higher than they were used to. But that mentality does not appear to pass down through the generations.

The idea that OPEC doesn't want us to develope alternatives to their oil should be enough to straiten out the "mob" thinking that the present high prices is their attempt to gouge us for all they can just for getting as much money as possible at this present time. They appear to think in more long term ways then we do in this country, they know, they have experienced the fuel saving efforts that we develope to ease fuel costs. And alternatives to fuel are not going to profit them inthe long run. Nuclear power was a result of the first fuel shortage, it is only time that makes Americans forget just how dependant we are on the oil supplies of the world.

If a homeowner who gets power from nuclear power plant decides to switch their heat from oil to power, that is a permanate loss to the fuel supplier. Natural gas comes from local supplies so if their heat is changed to that then it is the same story.

The initial cost of changing heating sources are made up for in the long run and in the security of not being dependant on the "whims" of a cartel somewhere else in the world.

It's time to change our own thinking and stop demanding someone else in the world cater to our whims.

-- Cherri (sams@brigadoon.com), June 16, 2000.

I'm with you Cherri. Isn't it amazing how Americans squall like banshees about the high gas prices, but don't bat and eyelash at the price of a 24 pack of beer, or carton of cigarettes

-- gilda (jess@listbot.com), June 16, 2000.

My objection is to the up and down manipulation that prevents the development of alternatives. Sustained higher prices will generate commercial enterprises that offer alternatives. Unfortunately, before these alternatives can be developed, the oil producers lower prices again to ensure that any alternatives are uneconomical and these enterprises go bankrupt.

For those who whine about how expensive petrol is in the UK, remember that 80% of the price is taxes! The market doesn't dictate higher prices in Europe, the governments do. Their cost before taxes is very similar to ours.

JCC

-- Greybeard7 (Wolverine_in_nc@hotmail.com), June 16, 2000.

Hey Chicken Little, give it up man, you're losing, and no one gives a shit about "real costs". If I go shopping for a car that was $20,000 one year ago, and the same car is now $30,000, I'm going to be pissed no matter how much it costs in freakin Europe, get it?

The Republicans are intentionally encouraging these price increases for political purposes, and they don't care if American citizens are getting shafted in the process.

-- Hawk (flyin@hi.again), June 16, 2000.

You may now return to your cheeseburgers and automobiles. :)

-- Will (righthere@home.now), June 17, 2000.

Hawk:

Yeah, I get it. I think if last years $20K car cost $10K this year, you'd still be pissed off. Do you have a positive outlook about anything?

JCC

-- Greybeard7 (Wolverine_in_nc@hotmail.com), June 17, 2000.

Yes, I have a very positive outlook about Everything. God has given us free will and His divine power to experience this awesome universe in any way we choose. I am in love with this entire experience of life that God has given us, it is truly awesome and wonderful.

The only thing that doesn't make sense to me is how people like you can be so mother-fucking stupid. Kiss my ass, you dipshit loser. :-)

-- Hawk (flyin@hi.again), June 17, 2000.

Hawk:

Well, I'll try to be civil one more time. WHAT has angered you so much about my post? Frankly, I don't see why you have responded in such an insulting manner.

I really do feel that price manipulation of oil has stifled the development of alternative energy industries. If you don't agree, I would be interested in hearing why.

JCC

-- Greybeard7 (Wolverine_in_nc@hotmail.com), June 17, 2000.

There is nothing about the original post that angers me, I was merely pointing out that Americans ARE spoiled, and the only "real world" they are concerned about is the one where they always get what they want. THAT is the real "reality check".

I am a very optimistic person, so of course I was angered by your implication that I do not have a positive outlook about anything. It was an unjustified personal attack, so I responded appropriately. Better luck next time. :-)

-- Hawk (flyin@hi.again), June 17, 2000.

Hawk:

"Do you have a positive outlook about anything?"

That's an unjustified personal attack?

How would you define: "The only thing that doesn't make sense to me is how people like you can be so mother-fucking stupid. Kiss my ass, you dipshit loser.:-)"

Is the little grin supposed to negate the prior two statements, or should I interpret this as an "unjustified personal attack"?

JCC

-- Greybeard7 (Wolverine_in_nc@hotmail.com), June 17, 2000.

Yes, it most certainly was an attack. What basis do you have to say such a thing?

In reference to your next comment, remember the order in which this occurred. You insulted me FIRST, then as I have already pointed out, I responded appropriately.

You might want to re-evaluate your thoughts the next time you feel compelled to make a remark about someone's very personal nature, especially when you don't even know them. As I said, better luck next time, and good day. :-)

-- Hawk (flyin@hi.again), June 17, 2000.

Hawk:

It's unfortunate that you interpreted that as an attack. A snide question, yeah, but no venom intended.

"Never try to teach a pig to sing, it wastes your time and annoys the pig."

I'll stop annoying you now. (To be perfectly clear, that is not a personal attack, that is an insult.) Feel free to respond with a string of invective, as that does seem to be your forte.

JCC

-- Greybeard7 (Wolverine_in_nc@hotmail.com), June 17, 2000.

"Hawk:

Yeah, I get it. I think if last years $20K car cost $10K this year, you'd still be pissed off. Do you have a positive outlook about anything?

JCC

-- Greybeard7 (Wolverine_in_nc@hotmail.com), June 17, 2000. "

You may think you were being "snide", but since your remarks were of a very personal nature, I thought it was very rude, and completely unjustified. Since you are obviously not man enough to apologize, go ahead and make more snide remarks. From now on though, I'd recommend that you choose a victim who is even more stupid than you, that way they won't challenge you by defending themselves. I get the impression that you prefer to go through life making stupid remarks without being challenged. Better luck with your next victim. :-)

-- Hawk (flyin@hi.again), June 17, 2000.

Hawk:

For what it's worth, the best way to "defend yourself" is with an explanation, a clarification, or some other display of knowledge and/or intelligence.

Knee-jerk thoughtless profane attacks serve to *emphasize* stupidity, not correct such a misconception. A third-party reader of such a reaction is far more likely to think Greybeard is correct, then to question his assertion. Your reaction *ratifies* his assertion. Can't you see this?

-- Flint (flintc@mindspring.com), June 17, 2000.

Flint,

The asshole attacked me and I told him how I felt. I don't see any way to respond to his attack with an intelligent "explanation". Isn't it HE who should explain why he responded the way he did?

If you and other "third-party readers" choose to believe that his reply to my first response was any more appropriate than my reply to his second response, just because he didn't use any "profane" words, I don't really give a shit what you think. If you choose to go through life wearing blinders, you can go fuck each other, I could care less. :-)

-- Hawk (flyin@hi.again), June 17, 2000.