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Friday, June 24, 2005

Oil Prices, Newfoundland Conspiracy Theories - Part Two

In my last article I tentatively dipped my toe into the frigid and shivery waters of conspiracy theories. At the end of that article I innocently mentioned a possible conspiracy related to oil prices. This offhand remark has caused my email box to be flooded with requests for more on the topic and has basically thrown my head into a spin.

The impact of that innocent remark was completely unexpected and I have to admit somewhat flattering. Why anyone would want to hear more of my feeble ramblings on such matters is beyond me, but being someone who hates to let anyone down, I give you another installment of my conspiracy theory ramblings. I promise this one will be the last, (so no more email please).

The question on everyone’s mind these days is why the price of oil, and in turn gasoline, is so high. The topic has been debated and discussed to death, yet the answer appears to be ever elusive. Just on the tip of the brain so to speak. OPEC claims there is no valid reason for the skyrocketing jump in prices. Various market analysts say it is because of everything from high demand in China to low reserves in the U.S. Others say it’s simply investor nervousness over supply in the marketplace. Who do you believe?

If you’re a conspiracy theorist then you don’t believe any of them.

The Theory goes like this:

The heads of several world governments are secretly driving up the cost of oil as a two pronged attack on the public. The Kyoto protocol was adopted by most of the world’s industrialized nations, including Canada, in recent years. Simply put, it requires nations to clean up their act, burn less fossil fuels and cut greenhouse emissions by specific amounts by certain deadlines. If these countries can’t meet their Kyoto requirements they face penalties, not to mention the ridicule of their Kyoto partners, but how to do it?

Simple, by driving up the price of oil on world markets they can ensure that the average consumer begins to buy more fuel efficient cars, cut down on long drives and even lower the heat in their homes. It’s a simple matter of cutting back on fuel consumption or starving to death. A choice made easy by a government that assumes everyone is so stupid that they need simple choices.

The dizzyingly high prices also ensures that industry actively pursue alternative sources of energy. Energy sources that must be cleaner than those currently in use or the Department of Environment, (another government agency involved in the conspiracy), will never allow its use. Not to mention the fact that every environmental group from Alaska to Auckland would pounce on them like a pack of hungry hyena.

But wait, there’s more. If this environmentally friendly trick were the only motive for the conspiracy then there would be some who might look the other way, but it isn’t.

Every nation in the free world charges dreaded and painful taxes on all fuel products. Everything from gasoline to furnace oil is taxed at a huge percentage. As a result, the obscenely higher prices have had the effect of putting untold billions into the coffers of our governments. First they reap revenues from oil companies who extract oil under their various jurisdictions, they then tax the consumers who purchase oil and gas products. For the government it’s a financial bonanza.

It’s a simple theory really, but that’s the beauty of it. Somebody must have told the heads of these governments to use the K.I.S.S. principle, Keep It Simple Stupid. They also learned a valuable lesson during the 1970’s when the world was supposedly suffering an oil shortage. Thirty years later we still haven’t run out of oil, but the reason we have so many small fuel efficient cars on the roads today can be directly attributed to that supposed crisis.

As a footnote, my writing always has a local Newfoundland and Labrador slant and although the price of oil affects everyone, including those in my homeland, I would be remiss if I didn’t include a specifically NL twist to this theory. This angle deals with the fact that another component of the whole conspiracy is the impact on NL itself.

Taxes in this province are higher than anywhere else in Canada. Unemployment in the province is higher than anywhere else, the average income is lower and the weather can be some of the harshest, (requiring more home heating costs). As a result NL is somewhat unique in the way it is impacted, (places like NWT, the Yukon, etc. may also have an argument for this one).

The high cost of fuel, and an inability to pay for it, is driving more and more people to migrate out of the province and into larger centers like Ontario and Alberta. This has always happened of course, but now the incidence rate is starting to rise like we haven’t seen in a while.

You may ask what the Federal Government could possibly gain from this and if you’re not a conspiracy theorist, then you probably will ask.

Ottawa bases its provincial transfer payment calculations on population. Its simple really, the less people a poor province like NL has, the less Ottawa has to pay the province in transfer payments. On the opposite side of this coin, since these people are moving primarily to Ontario and Alberta, two “have” provinces, they can pay into the pot by filling unwanted jobs and contributing to those provinces GDP. This of course means higher payments into the federal transfer purse from those provinces.

Nice trick huh?


a fan said...

I hadn't thougt about it like that. It kind of makes some sense.

When you look at it, its really in the best interest of the federal government to keep the population down in this area. Now I can see why they never put any money into building our provinces economy.

I really like your site. I come back just about every day and I hope you keep it up.

Harris said...

Good stuff. (Bad, but good)

Morlock said...

Ever wonder if the oil harvesting from the Grand Banks has had an effect on the Cod Stocks?

When oil escapes during drilling, it rises to the surface. The quickest (and dirtiest) way to get rid of the slick is to just dump detergent on it. The detergent bonds with the oil and sinks it to the ocean floor.

Could a build up of pollution on the sea bed be affecting the birth rate, contributing to the overall decline of the stocks? A quick timeline check will show that test drilling for oil began around the same time as the inital reports of a decline in the stock.