I still remember when gas used to cost less than $1 per gallon. No, it is not ancient history and I am not that old. It was 1998, and by the summer of 1999 we all expected the regular fluctuations to take it above the $1-per-gallon mark. However, the shock came when it never made it back below that level. We talked, we complained, but in the end, we adjusted.
On the wave of a couple hard hurricane seasons, it eventually surpassed the $2-per-gallon mark, and once again we adjusted after some more fuss. The pattern repeated itself when the war in Iraq brought the prices above $3. This time, however, we started trading in our big trucks.
Now, once again oil executives and investors "predict" gas to cost $4 a gallon by the summer. In the middle of the highly publicized economic slowdown, the big oil corporations keep posting record profits.
This brings to mind questions: With such big profits, why the economic slowdown? Where is all the money going? The answers should be obvious. We are just traders in the energy business. After a few decades of political miscalculation or outright exploitation, the middle man’s vendors have grown wiser and politically savvy, luring the big corporations to move their expenses to less controlled, more appealing markets.
We buy the gas and oil from Middle-Eastern countries, where it is pumped out by Japanese designed, built and sometimes controlled wells using Chinese tools, which were made from Russian iron before being transported through a multinational pipeline to a local port where it is then loaded into Norwegian ships, and finally, to a British refinery.
A Mexican trucking company will take the derivates to our local gas station, which by the way is owned by a Pakistani, where we will load it into our Japanese- or European-built rides before going out to an Italian restaurant, where the cook is probably Salvadorian, and to buy designer clothes made in the Philippines.
We pay with our internationally funded Visa card, and if anything goes wrong, we can always call customer support in India. We could see and feel the American presence here and there, especially in the high-level executive circles whose money is well kept in Swiss or Caribbean banks, and who make a point on buying imported goods or tasting French wine.
To sustain such a complex and clearly profitable global system, the big corporations need to not only to stay clear from international confrontation, but keep some level of control over the policy-making process to ensure their interests are guarded. That includes keeping labor prices down in developing countries, a steady supply of cheap raw materials at any cost, and global warming off the agenda so the industrialization in China or India is not slowed down by environmental concerns.
What can we do to remain competitive in such circumstances? Clearly, we can get outraged and complain, but taking the climb in oil prices just because we see no choice will not fix anything. Rejecting the spending culture and turning into a more conservative management of our own resources will hurt us.
We need to start producing more and produce more efficiently so the money that comes into our hands is not just our neighbor’s.
Bonilla, a computer engineering technology senior, can be reached via [email protected]
