Wondering why the price of gasoline has plummeted to around $2 a gallon?
It is largely an attempt to quash one of the most odious of energy processes--fracking--by a most odious of energy organizations, OPEC.
Hydraulic fracturing or fracking has in recent years caused a revolution in petroleum extraction. Using a new technique to split underground shale formations, it has vastly expanded gas and oil output in the United States. But it is a messy and polluting process.
Massive amounts of water and 600 chemicals are shot into the ground under high pressure to release the gas and oil. But gas from fracking wells leaks into underground water tables causing serious contamination and also the phenomenon of what comes out of a water faucet bursting into flames when touched with a lit match.
The 2010 Oscar-nominated film "Gasland": and subsequent "Gasland Part II," both written and directed by Josh Fox, document this fiery aspect of fracking, along with the many instances of water pollution and impacts on people's health caused by the contamination of water.
Another major problem involves fracking setting off earthquakes.
A new fracking technique--horizontal fracking--was first developed with federal government support in the U.S. in the 1980s. It has enabled the U.S. to again become a global giant in petroleum production.
The International Energy Agency has projected that in 2015, because of fracking, the U.S. would displace Saudi Arabia as the world's largest oil producer.
Fracking, however, is a relatively expensive process--about ten times more costly than the $5 to $6 per barrel cost of drilling oil from conventional wells in Saudi Arabia.
By letting the price of oil drop, OPEC, in which Saudi Arabia is the key partner, has been applying financial pressure on the fracking industry.
Oil in much of 2015 went down to $60 a barrel making fracking a problematic undertaking economically. And consequently there have been reductions in and cancellations of numerous fracking operations.
Still, the fracking industry cut costs in seeking to survive.
And that has resulted in even greater OPEC pressure--the drop in price of a barrel of oil to less than $40--as low as $37--in recent weeks. Thus $2 a gallon gasoline in the U.S.
Manipulation of the petroleum market is not new. John D. Rockefeller with his Standard Oil Trust mastered it between the end of the 19th and start of the 20th Century. Rockefeller and his trust succeeded in controlling virtually all the oil industry in the U.S. and also dominated the international market. The Standard Oil Trust fixed prices, set production quotas and ruthlessly forced out competitors.
The U.S. Supreme Court in 1911, in the wake of muckraker Ida Tarbell's investigative articles and book on the Standard Oil Trust, utilized the Sherman Antitrust Act to break the trust up into 34 pieces. "For the safety of the Republic," the court declared, "we now decree that this dangerous conspiracy must be ended."
(Note: You can view every article as one long page if you sign up as an Advocate Member, or higher).
1
1
1
