Drill Baby Drill is a lie (How Big Oil and the Big Banks are sucking us dry)

  • Published on November 29th, 2011

big oil sucking money out of the economyWhen Occupy Wall Street rails against the Big Banks, they may be leaving out an important part of the equation. It’s not just Big Banks that are sucking money out of the US economy – Big Oil is doing its fair share.

Big Oil and their buddies, like Newt Gingrich (See: Newt is incredibly wrong about oil) have been pushing the same  story for years: If only they were given free reign to drill anywhere there’s oil – in wildlife reserves, off the coast of Florida – we’d be able to kick the foreign oil habit and return to the halycon days of $2 gasoline. That’s a lie, and it can be proven with just one statistic: US refineries EXPORT 536,000 barrels of gasoline a day. Writing at the New York Times, Lisa Margonelli, the director of the Energy Policy Initiative at New America Foundation, points out that “Oil Isn’t Scarce. It’s Just Wasted“:

So far, we haven’t faced any true problems of scarcity of oil or other fossil fuels. What we have faced are high prices, which are the result of constraints in fuel production, shipping and refining around the world. Finding more oil will not necessarily bring down the price of gasoline in the U.S. unless supply significantly exceeds demand — and there’s no incentive for oil producers to make that happen.

Why not? Because they have control over the market. And with supplies kept artificially scarce, they make money hand over fist. What’s their incentive for increasing supply – which would lower their profits? Margonelli says the real problem is the impact those high prices are having on the economy.

High gas prices are causing the U.S. economy to hemorrhage money, and U.S. consumers are paralyzed to do anything about it. This year, American drivers are on track to spend $490 billion on gasoline alone.

According to the Energy Information Administration, the amount the US economy spends on energy has doubled since 2000. That’s crazy… except when compared with the amount that the Banking Sector absorbs.

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(Gas pump image AttributionNoncommercialNo Derivative Works Some rights reserved by Anthony Citrano)

About the Author

Jeremy Bloom is the Editor of RedGreenAndBlue. He lives in New York, where he combines his passion for the environment with his passion for film, and is working on making the world a better place.