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Hawkins Calls for Creation of National Oil Company Green Party of New York State Howie Hawkins for US Senate July 24, 2006 For more information: Howie Hawkins, (315) 425-1019, howie@hawkinsforsenate.net Hawkins Calls for Creation of a National Oil Company to Accept Venezuela’s Offer to Cap Oil Prices at $50 a Barrel for the Next 200 years NEW YORK -- Howie Hawkins, the Green Party candidate for US Senate from New York, called today for the creation of a national oil company to help protect American consumers against the rapidly escalating price hikes for gasoline. Hawkins said that the national oil company would take advantage of the offer by the Venezuelan government to sell oil at only $50 a barrel for the next 200 years, well below the current world price of around $70 a barrel. $50 a barrel means about $2 a gallon at the gas pump. “We must break the Big Oil’s monopoly control of our energy supplies. ExxonMobil and the other oil giants rejected the Venezuelan offer. A national oil company would serve as a New Deal style yardstick corporation whose competition would prevent Big Oil from gouging consumers. The national oil company would go into the international market and, for the first time, offer the OPEC countries a selling outlet in the US other than the multinational oil giants,” Hawkins said. Hawkins said the national oil company should also be mandated begin at once a NASA-like drive to develop wind, solar, and other alternative sources of power. “It could do this because, unlike the oil companies, this publicly controlled company corporation would have no vested interest in stifling renewable energy sources that compete with Big Oil’s fossil fuel reserves." “While the invasion of Iraq has been a disaster for the Iraqi citizens and American consumers and taxpayers, it has been a huge windfall for the private American oil companies. They are literally making out like bandits. The five oil giants have seen their profits soar from $34 billion in 2002 to $113 billion in 2005, including $36.1 billion for ExxonMobil alone. The value of their oil reserves increased by more than $2.3 trillion. Yet rather than call for new taxes to recapture some of this windfall, the Democrats and Republicans trip over themselves to make proposals to instead reduce the government’s revenues by cutting a few pennies from the sale taxes. Do you think that Big Oil’s tens of millions of campaign contributions might have anything to do with the nonsense being peddled by the two major parties?” pondered Hawkins. Oil geologists disagree on when global oil production will peak. Some say peak oil production is imminent. The most optimistic put it off about 35 years. But all agree that sooner or later the finite supply of oil will force prices up inexorably as increasing demand meets diminishing supply. Rising demand from fast-developing China and India are accelerating this day of reckoning. Hawkins argues that a national oil company with access to oil at a fixed price would greatly assist the United States in the transition to more sustainable energy sources based on renewable energy. Hawkins also says that such a transition is needed to reduce the growing impact of carbon emissions on global warming. Hawkins said the national oil company would be a powerful tool in the implementation of his proposed clean energy transition (See “Energy Policy Statement” at http://syracusegreens.wordpress.com/page/2/). Hawkins has called for taking $300 billion a year in US military spending and investing it in “a global public works program to rewire the plant for the efficient use of renewable energy in 10 years.” Hawkins has said his clean energy transition will address the problems of global warming, peak oil, job creation, trade deficits, energy costs, and resource wars over oil reserves. “The National Oil Company will serve as yardstick competitor to spur renewable energy development as much as it will for stabilizing oil costs,” Hawkins said By getting a long-term commitment at $50 a barrel for oil, Venezuela would be able to tap its huge reserves of extra heavy crude oil, which is more expensive to refine. By “officially” expanding its reserves to 312 billion barrels (compared to Saudi Arabia's 262 billion), Venezuela would be able to increase its production quota under OPEC rules, providing a guaranteed market for as long as 200 hundred years. The deal would seem to benefit both Venezuela as well as oil importers such as the United States. Hawkins noted that since the Venezuelan national oil company recently announced its intention of divesting its Citgo gas stations in the US, a National Oil Company could purchase a ready-made network of suppliers to consumers. “Unfortunately, there is no reason to expect such a timely move from the Democrats and the Republicans in Congress. Even though Big Oil is one of the few major industries that has overwhelmingly supported Republicans as opposed to both major parties in its campaign contributions in recent decades, the Democrats have shown no inclination to take on any corporate special interest and no imagination in dealing with the energy crisis. That’s why there ought to be some Greens in the House and Senate so they can force bold new ideas into the public debate,” Hawkins said. Hawkins cautioned against relying Venezuela’s extra heavy crude oil, also known as tar sands, oil sands, or bituminous sands, for the long term for environmental reasons. Venezuela and Canada each have about one-third the world’s heavy crude oil reserves. However, Venezuela’s heavy crude is far easier to extract and refine with less environmental impact than Canada’s due to its higher purity and the higher ambient temperatures of Venezuela which make extraction far easier. Yet its high sulphur and particulate content gives heavy crude a higher environmental impact when burned as fuel. “Venezuelan heavy crude should be seen as a transitional source of energy as we build clean, renewable sources, including wind, solar, biofuels, solar and wind generated hydrogen for fuel cells, and geothermal heating and cooling. Above all, we must increase our efficiency in energy use, most especially in the transportation sector through a massive expansion of mass transit and freight rails,” Hawkins said. “I can think of only three reasons why President Bush and Congress wouldn’t want to provide a stable source of oil for Americans at a below market price for the next two centuries. One, they want to protect the surging profits being made by the private oil companies, regardless of the pain inflicted upon American taxpayers and other businesses. Second, they are willing to sacrifice the well-being of America consumers due to their ideological differences with the democratically elected government of President Chavez,” noted Hawkins. “God forbid that an elected official show some concern for the well-being of the poor and middle class in his country. And third, the Bush family and the US political elite have sold their souls and the American dollar to the brutal dictatorship headed by the Saudi family.” Hawkins said that without such a long-term commitment to stable oil prices, the US economy would be subjected to repeated price shocks likely to increase in severity over time, leading to a succession of economic depressions accompanied by runaway inflation. “A nationally owned oil company makes the most sense because it is as clear as day that the private oil companies in America are out to fleece consumers and taxpayers at every opportunity,” Hawkins observed. “The US built its economy, suburban lifestyle, and agricultural system on cheap oil. That era is coming to an end and we need to make the transition to a more sustainable, renewable energy system. Accepting Venezuela’s offer to freeze gas prices at $2 a gallon for the foreseeable future will make that transition less painful,” added Hawkins. “It reminds me of when Governor Cuomo offered to take over the Medicaid costs from local counties in exchange for sales tax revenues. The Republicans blocked it because they assumed it was trick to bailout New York City. Now they are all kicking themselves for their shortsightedness.” Howie Hawkins for US Senate from New York
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