To hear some of the folks on Wall Street tell it, especially those in the energy industry, the recent plummet in the price of oil is the most horrifying thing to happen since the Great Depression. Which, let’s face it, wasn’t all that depressing for some people. Energy czars and oil states use phrase like “stop the bleeding,” “hemorrhage” and “panic.” But, as we’ve seen time and time again (and somehow have yet to actually learn), the interests of the American people have kind of an inverse relationship with the vices of Big Energy and Wall Street. When we bleed, they profit; and finally, it seems, vice has become versa.
According to a study by the AAA, the recent plummet in gas prices from $3.49 last year to less than $2 a gallon in at least four states (as of today) has saved the American people over $14 billion in 2014. Given 320 million people, that’s $43.75 for every living soul in the country — or more to the point, about $60 for every person old enough to drive.
And most of that came right at the end of the year; oil prices really didn’t go into free-fall until right at the end of summer. The AAA estimates that if the prices stay relatively low — about where they are now give or take — then the savings through 2015 could be as much as $50 to $75 billion. That’s a massive $215 to $323 savings for every single person old enough to drive, and an utterly stunning $936 savings for a family of four. For most of us, that’s an entire month’s rent plus the electric bill paid.
Courtesy of Big Oil: Finally doing America some good by bleeding to death.
That should be Exxon’s new slogan.
Of course, the bottom isn’t going to drop on oil prices forever. There are a lot of reasons for the drop in fuel prices, and not all of it has to do with the United States. Demand for oil has decreased everywhere, including Asia, which has been its strongest growth market for more than a decade now. Seems China doesn’t have quite the endless thirst for the stuff that we do — probably owing to the fact that its entire economy is based on exploitation, theft and producing cheap crap. There’s kind of a point of diminishing returns in that strategy.
Some of it also has to do with OPEC; specifically, Saudi Arabia putting on a fire sale, cutting oil prices by nearly half in recent months to undercut its economic rival, Iran. The fact is, fuel demand is dropping worldwide, and for a lot of the same reasons it has been here specifically: Increases in energy efficiency, alternative energy, electric cars, and people just generally being fed up with the Endless Problem Factory that is the Middle East. At this point, fuel suppliers there are having to actually compete just to stay in business in a rapidly shrinking market, and that’s driving down oil prices elsewhere.
And where is “elsewhere?” Just make a list of nations, states and individuals that have been general, detestable pains in our collective as*es for the last 25 years. That’s pretty much it. Russia, Texas, the entire Middle East, Koch Industries, Rupert Murdoch; a few among dozens (including a lot of hedge fund managers on Wall Street) who are facing a serious case of economic anemia in the months or years to come.
And Russia in particular is facing an economic collapse unprecedented since the default crisis in 1998. Russia’s currency lost half its value in the last year, and they’re calling the end of December “the week the dam broke in Russia.”
No more invading Ukraine for Tea Party hero Vlad. At this rate, by this time next year, he’ll be doing well to invade a Starbucks.
But, hey, that’s all right. Big Energy, Oil States and the American people have always had an inverse relationship when it comes to profit and personal well-being. The last 30 years wrote one half of that proof, and we’re filling in the other half now. So, our message to Wall Street and Big Oil — to paraphrase a certain half-term Alaskan governor —
Bleed, baby, bleed.