What's Causing the Gas Hole in Your Wallet? You've Got to See This Movie
If you want to know why we're really paying over $4 per gallon for gasoline, and there appears to be no end in sight, the film Gas Hole lays it all out for anyone who wants to know the history of the pain at the pump.
The filmmakers pull back the curtain on the dirtiest secrets of the oil industry: from oil companies buying up patents for devices that would give you 100 miles per gallon, to intimidation of inventors of green technology, to oil company manipulation of the gasoline supply that drives up prices.
Being released on DVD in time for Earth Day, Gas Hole, narrated by Peter Gallagher and featuring Joshua Jackson, is an eye-opening documentary about the history of oil prices and sheds light on a secret that the big oil companies don't want you to know -- that there are viable and affordable alternatives to petroleum fuel!
Gas Hole provides a detailed examination of our continued dependence on foreign oil and examines various potential solution.
The film also tells the story of the battle my group, Consumer Watchdog, fought with Shell Oil to keep the company from demolishing a key gasoline refinery during a period of high demand and low supply in order to drive up the price at the pump. A combination of public pressure and intervention by US Senator Barbara Boxer and then California Attorney General Bill Lockyer forced Shell to keep the refinery open and sell it to a competitor.
As Gas Hole documents, it took every bit of raising hell know-how we had to keep Shell honest. Most communities just cannot fight back.
The film artfully lays out what I learned about fighting oil companies for more than a decade about how they jack up the price up at the pump.
• Rather than compete with each other to provide cheaper gasoline, oil companies cheat together to withhold needed gasoline supply from the market. Consistently, the companies artificially pull back refinery production of gasoline in order to reduce supply coming in during periods of peak demand so they can increase prices.
• Oil companies failed to build ample refining capacity to meet demand. Over the last 20 years, America's demand for gasoline increased 30 percent and refinery capacity at existing refineries increased only 10 percent. No new American refinery has come on line during the last 30 years. Internal memos and documents from the big oil companies show they deliberately shut down refining capacity in order to have a greater command over the market.
• The big oil companies have their own crude oil production operations and control substantial foreign production of crude oil. They profit wildly when the price of crude oil skyrockets, so they have an interest in driving up the price, despite the fact that they blame OPEC for those crude oil increases. The crude oil producers can even drive up the price of crude by restricting gasoline production and trading crude oil among their own subsidiaries to drive up the price paid for crude by others. Traders with connections to the oil companies can also make big bets on the opaque crude oil futures market to drive up the price and also drive up the value of their Exxon shares.
• The crude oil that big integrated oil companies use in their own refineries is mostly bought on long-term contracts or through their own production, so the oil companies don't pay the world price for crude oil when it's high. Their raw material costs are much lower than they would like us to believe. So when the companies raise the price of gasoline in tandem with the run-up in crude oil prices, they are making big profits because Exxon's crude oil unit is charging its own refining unit a higher price for crude than is necessary. The accounting shenanigans result in an overall windfall profit but show the companies' gasoline refineries making little profit, and "upstream" crude-oil production divisions making the lion's share.
The oil companies cannot be shamed, but Gas Hole shows why we need to keep them on a short regulatory string.
What are the solutions? Gas Hole offers them up starting with claims of buried technology that dramatically improves gas mileage, to navigating bureaucratic governmental roadblocks, to evaluating different alternative fuels that are technologically available now, to questioning the American Consumers' reluctance to embrace alternatives.
If you are paying $4 dollars or more per gallon for gasoline, spending a little more on the DVD of Gas Hole is a wise choice.
Follow Jamie Court on Twitter: www.twitter.com/RaisingHellNow
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