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JANUARY 2, 2003 – "Former US
President Bush... arrived in Kuwait on Tuesday for a two-day
visit. Bush will hold talks... with high-ranking state
officials on regional and international issues... Earlier in the
morning Bush concluded a five-day visit to Saudi Arabia, during
which he met with King Fahd Bin Abdul Aziz and Crown Prince
Abdullah."
So read the story in the Arabic News on December 12, 1998.
Oil prices were at the ultra-low price of $9.70
per barrel at this time. The American economy was coasting
along, and no energy shortage was in sight.
A few months later, in March of 1999, Saudi Arabia
led a meeting in the Hague of OPEC nations and formed an agreement
to slash production. Soon after, oil prices began to rise,
jumping up to $12.75 per barrel by mid-march for April selling, and
by mid May, oil prices had almost doubled, reaching $16.5 per
barrel.
Already by April of 1999, the increase was
starting to hit consumers' pocketbooks.
"The price of gasoline in the United States has
been creeping up in recent weeks and, according to the government,
could rise even more by summer," CNN reported on April 9, 1999. Another CNN article on June 27, 1999 reported that the
reason gas prices were rising was "because of oil production
cutbacks."
By this they meant the oil production cutbacks the
Saudis and other OPEC nations undertook almost immediately after
meeting with former President Bush, whose son, as luck would have
it, was just on the verge on launching a run for the White
House.
By the time the 2000 election rolled around, oil
prices were a full-fledged issue and provided just enough of a drag
on the economy to put a little doubt into people's minds about
whether or not things would continue as well as they had for the
rest of Clinton's time in office. Battles over whether or not
to use the strategic oil reserves became hot issues and were used to
dent Al Gore's election bid, and Clinton/Gore's inability to stem
the drastic rise in oil prices that occurred following former
President Bush's visit, for no publicly announced reason, with the
heads of state of the OPEC nations, allowed just enough of an
opening for his son, George W. Bush, to have a chance at getting
into the White House.
It all began with some very unhappy oil people but
a very happy American economy. The price of oil was $9.70 a
barrel. Then former President George H. W. Bush visited the
allies he had from back in the Gulf War, the king of Saudi Arabia
and other mid-east oil nation heads of state.
A few months later, oil was up to almost $13 a
barrel, then almost $17. In fact, how drastically did world
oil prices spike after President Bush took his tour of mid-east oil
producing nations for no stated reason?
As Lawrence Goldstein, president of the non-profit
Petroleum Industry Research Foundation, told the NewsHour with Jim
Lehrer on November 23, 1999, "...erosion in stocks has led to a very
dramatic increase in crude oil prices from a low of about $11 to $12
dollars earlier this year to $27 dollars today." This was less
than a year since former President Bush made his mid-east rounds,
and about one year before his son would try to win an election to
the White House.
A jump like that has an immediate effect on
people's pocketbooks in a negative manner. For the average
consumer, within this 11 month period, gas prices alone rose between
30 and 35 cents a gallon, not to mention a spike in heating oil and
natural gas prices that paralleled. This sudden rise in gas
and energy prices began to put a bit of speed bump in front of the
previously soaring Clinton economy, allowing a bit of heretofore
unthinkable economic doubt to enter into the election
cycle.
While the OPEC oil production cuts had a major
role to play in the drastic rise of gasoline prices, there's more to
gas prices than just oil supply. As California Attorney
General Bill Lockyear said in a report released one day before the above report,
on November 22, 1999, "Our concern is that high gas prices in
California are the result of low competition in the market."
The article states that Lockyear cites, "the concentration and
control oil companies have over the production and sale of
gasoline," as one of the major causes for rising consumer gas
prices.
In other words, Saudi Arabia and its OPEC partners
cutting production drastically following the meeting with former
President Bush in December 1998 was one prong of the action that
caused the spike in energy prices that would become a central issue
of the 2000 President election. The other was power energy
companies.
Consolidation of the refinery and gasoline
production industries put more power in fewer hands - hands which
drastically wanted both higher energy profits and the son of an oil
man, George W. Bush, in office.
As reported in the oil industry trade journal, Drilling Contractor, Chairman of America's
predominant oil refinery company, Halliburton, was not so upset
about the rising oil prices.
"We think 1999 is a trough, and 2000 we think will
be significantly improved over that," said the Chairman, a man named
Dick Cheney.
And he could not have been more right. Look
at what happened with a company named Anadarko, a Houston based
petroleum company which, as luck would have it, is the company Dick
Cheney holds more stock of than any other, save for his former
company Halliburton.
As reported on July 30, 2000 by the Houston Business Journal, Anadarko's income rose a
breathtaking 33,166%. Look at this number again - this is not
a typo. Not 33,166 dollars, not 33.166 percent, but in one
year Anadarko's income rose thirty-three thousand one hundred and
sixty-six percent. In raw numbers, "Anadarko reported income
rose from $2.4 billion in 1999 to $796 billion in 2000."
In fact, Anadarko was not alone in making such a
leap. As the July 2000 Houston Business Journal reported, "Of
the 15 new companies listed on this year's top public companies
list, nine are energy related."
While OPEC oil cuts were partly to blame for the
massive, ultra-rapid rise in energy prices, the other prong of the
attack was being led by energy companies. As CNN reported on February 16, 2000, "Gasoline
prices have been rising steadily since last March, when OPEC cut
crude oil production by 7.5%, or more than 2 million barrels a
day..."
However, that alone was not the only cause for the
sudden spike. "Part of the problem is that U.S. refineries
normally increase production of gasoline during the first three
months of the year... That is not happening this year."
Refiners, CNN reported, were cutting back because of high oil prices
and short supply.
What CNN doesn't mention is that cutting back on
refining at a time when oil is in ultra-short supply also helps to
further drive up oil prices - this is the "concentration and control
oil companies have over the production and sale of gasoline" that
California Attorney General Lockyear talked about. The oil
companies argued that they couldn't afford to keep refining in this
market, and yet their profits were increasing over thirty-thousand
percent.
Enter Election 2000. As reported in this
same CNN report, by February of 2000 - perfectly nine months before
the election - oil and gas prices had now become a front and center
issue.
"Unhappy with what they're paying at the pump,
Americans already are talking about curtailing their driving just as
resorts and other vacation spots are starting to gear up for
summer."
"It's ridiculous at this point," one person was
quoted as saying. "I do as little driving as possible because
it's so expensive."
Tapping into the strategic petroleum reserve was
being considered, and the Clinton administration had to release $200
million from the Low Income Home Energy Assistance Program - money
that went directly to energy company and OPEC country
profits.
Because remember, there was no actual cause for
this drastic increase in oil prices from $9.70 to over $27 or for
gas prices to shoot through the sky except that, following that
December 1998 meeting with former President Bush, first the people
he met with in the Middle East, and then his Texas oil company
associates in the U.S. decided to run prices up higher by cutting
supply and reducing refinery production. There was no war or
conflict that caused this price rise, nor shortage of oil available
for drilling. It was a simple choice on the part of parties
that George H. W. Bush visited and knew to "boost
prices."
While most Americans were starting to feel the
pinch of rising energy prices, the very people who would donate to
Governor George W. Bush's presidential campaign were seeing a surge,
and, not coincidentally, donating by the bundle. George W.
Bush would go on to shatter all fundraising records, being the first
candidate to ever waive matching funds and raise over $100 million
dollars.
In the meantime, the Clinton administration tried
to fight back. Energy Secretary Bill Richardson hosted an
"energy summit" in Boston to hear consumer complaints, and then met
with leaders in Mexico, Saudi Arabia, Kuwait, and other OPEC nations
to try and and "reason with them."
"(I will) talk to OPEC and non-OPEC members about
the importance of... having more supply of oil on the market," said
Richardson, as reported by CNN .
So then the Saudis and other OPEC nations were in
the middle of a feud - and not so coincidentally smack in the middle
of our presidential election. On the one hand, former
President George H. W. Bush, his oil company allies, and his son the
presidential hopeful, wanted them to keep production at the reduced
level at least through the end of the election cycle, while the
current Clinton administration and presidential hopeful Vice
President Al Gore wanted them to get producing again.
The Saudis and OPEC, unsure of who would win the
Presidential election, had to work constructively with the Clinton
administration, hedging their bets in case Al Gore became the next
President. On July 4, 2000, they began to ramp production back
up, agreeing to add 500,000 additional barrels a day to the market
until prices came back down from prices then over $30 a barrel to a
more moderate $25 a barrel - still almost 300% higher than they were
before former President Bush's visit, but over a 25% drop from the
astronomical prices oil had risen to.
And yet, the situation did not improve.
Clinton turned up and turned up the pressure on OPEC, but gasoline
and domestic energy prices remained extremely high, keeping the
issue alive, and indeed adding a bit of doubt to the economy,
throughout the presidential election cycle.
The reason Saudi Arabia and OPEC's reversal at the
behest of the Clinton administration did not usefully reduce the
high price of energy in America was that the domestic refinery and
petroleum companies - companies like Halliburton and Anadarko - did
not follow OPEC's lead. They were intent on keeping energy
prices high.
As OPEC member, Venezuelan President Hugo Chavez,
told News Perspective Quarterly in 2001, "(OPEC) alone cannot determine prices. For example,
refining capacity is not being totally utilized. In the US,
refineries are not operating at full capacity."
In other words, Halliburton,
Anadarko, and the other US oil and energy companies were operating
in a manner that was keeping energy prices high, and there was
nothing Saudi Arabia or OPEC could do about it.
And so, from ultra-low oil prices of $9.70 a
barrel, immediately following a visit with the heads of state of
several mid-east OPEC members by former President Bush, world oil
prices jumped over 220% within a year and a half, pumping billions
upon billions of extra dollars into the pockets of would be George
W. Bush supporters, creating a major issue in the 2000 presidential
election, and putting a speed bump in front of the economy which
allowed an opening for the younger Bush to have a shot at winning
the election.
The energy issue picked up steam as the election
neared. The Bush campaign derided Gore for tapping into the
strategic oil reserves and attacked the Clinton/Gore administration
for allowing this "energy crisis" to occur. When in June of
2000 Al Gore's campaign released an energy plan brought on by a need
to deal with the energy price crisis, the Bush team whacked
away.
"In a transparent attempt to fix a political
problem with voters angry over higher gas prices, Al Gore is
offering recycled ideas that will not reduce our dependence on
foreign oil," said Bush spokesman Dan Bartlett in a news release,"
as reported by Reuters on June 28, 2000. As this quote
shows, voters were now angry about the energy price situation and it
was a central issue in the presidential campaign.
The Bush campaign further attacked Gore's release
of the plan, deriding it as, "a knee-jerk response to a sudden spike
in gasoline prices this election year," according to the Reuters
report.
The Bush team failed to mention the causes for the
spike, of course.
Instead, as with Professor Harold Hill in The
Music Man, a problem was created and then harangued about. For
those who have seen the Bush administration seemingly create
problems only so they can assail someone else for them and claim to
be the saviors America needs to fix the problem, this is the first
example to be seen of this.
The evidence is clear. As Bush spokesman Ari
Fleischer said, as reported by AP, while gloating in December of 2000 over
Bush's recent victory in the presidential election, "It wasn't until
September of 2000 that anyone in power started talking about an
energy problem."
First of all, we can see that he was lying, as he
so often did - above we see that in June of 2000 Al Gore had
presented an energy plan to deal with the problem.
But in any case, Ari makes the more important
point: that no one foresaw this crisis coming. His
conclusion about this fact is completely off the mark,
however. Fleischer's asserts that the sudden, from out of
nowhere appearance of this energy crisis showed that, "In
Washington, we need to do a little better job of looking down the
road," a slam at the Clinton/Gore administration, asserting that it
was their inattention to a looming energy crisis that led to the
whole mess that helped sweep Bush into office.
In reality, we see clearly that the reason no one
foresaw the crisis and that nobody "in power started talking about
an energy problem" until mid-2000 was because there was none to talk
about. In fact, at no point was there ever an energy
problem. As would be the situation in California the following
summer, lack of energy had nothing to do with the problems that
occurred. The only thing that was at fault were people
conspiring to create a seeming crisis so as to drive prices through
the roof.
As Enron did a year later, Bush's Gulf War allies
and US oil company friends conspired to create a crisis that no one
could have foreseen, that helped to shape - and very possibly decide
- a presidential election, and gave countless wealth to those who
participated. And the campaign of George W. Bush took
advantage of it at every turn, casting blame on those who had no
part in the problem, and presenting themselves as heroes who would
save America from the crisis their friends and allies had drummed up
in the first place.
This was manipulation of markets and elections at
its worst. And while the rest of the media has given the
Bushes a free pass on it, we at The Moderate Independent are now
here to report the actual news, comprehensively and in its full
context. This should be the biggest story of the millennium so
far. Now we are putting it out there so it may be.
The Harold Hill pattern has been followed again
and again by the Bush administration: they failed to act to
prevent 9/11, and then said we should thank God they were there to
deal with the crisis; they presented exaggerated evidence to make
Iraq seem a "pool table, with a capital P" type problem, and now
claim to be heroic for saving us from this exaggerated problem; and,
of course, President Bush took advantage of Enron's bilking of
California - which, not so coincidentally, employed the same scheme
we see above - to try and pass his energy bill allowing, among other
things, drilling in the Artic Wildlife Preserve and, ultimately, to
overthrow the duly elected governor of California.
But George W. Bush would not have been able to do
any of these things had his possible first swindle - the
manipulation of energy markets to help him get elected - not
occurred.
NOTE: This is part one in an occasional
series. In part two, we will continue the coverage of this
story with a study in how Enron followed the Bush campaign's lead in
crafting and employing its scheme to bilk California out of
billions, and how President Bush used the situation as a political
hit on a Democratic foe.
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