It doesn’t help that the world’s oil is primarily pumped by dictatorship-led countries with little concern about upgrading their facilities and that America is overrun with gas-guzzling SUVs, but that doesn’t explain the dramatic hike in energy prices over the last year.
The new “energy crisis” appears to arise out of a confluence of factors, but a central one appears to be what is becoming known as the "Enron loophole." Enron of course was the multi-billion dollar Houston company that went bankrupt in 2002 and the same company that caused rolling blackouts in California to raise the price of electricity. Needless to say, there is probably not a better example of corporate sleaze in American history.
Enron used its political connections to create an unregulated market for energy. “Kenny Boy” Lay, Enron’s founder and last CEO was instrumental in translating Ronald Reagan’s “get government off our backs” credo into a carte blanche for energy markets.
The Enron Loophole exempts energy traders who make trades electronically from US regulation. These speculators, mainly hedge funds, are largely responsible for the rise to the $140+ a barrel of crude we are experiencing today. They are riding a typical speculative bubble, playing chicken with America’s future.
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