As our government inches ever closer to defaulting on our debt, oil companies are raking in the profits. They know our government’s got their back — no one’s going to touch those billions of dollars in tax breaks for the oil industry.
That’s why, instead of our regular Smart Investing Daily article, I want to share with you a very important letter from our executive publisher Sandy Franks.
Fair warning… what you’re about to read will make you angry at and disgusted with the oil industry.
But this isn’t just a rant about high gas prices. This is a call to action — to take a stand against oil and government cronyism. Their “friendship” is costing us billions of dollars in debt and tax dollars, while they sit on billions in profits.
So please, take five minutes to read this letter from Sandy.
Most people would describe me as friendly, happy-go-lucky and easy to get along with… and while those statements might be true, there’s one thing that makes my blood boil: the oil industry.
And I can guarantee you that oil companies soon won’t have too many nice things to say about me. In fact, they’re probably going to hate my guts.
How can I be so sure? Because my new book, Barbarians of Oil, is now officially released to the public. And it’s going to turn BIG OIL inside out.
Now I admit, barbarian isn’t normally a word associated with oil companies, particularly Big Oil companies. I’m not just talking about OPEC either. Everyone knows the story of how these Arab oil barons have held us hostage for years.
Here’s the thing. When it comes to oil, there are no “good guys” in the petroleum business. Whether the companies are American, Canadian, Venezuelan or Arab, the oil industry is full of barbarians.
Once you read Barbarians of Oil, I think you’ll agree with me. Not only that, but I hope you’ll call, write or email the congressman and legislators in your area and tell them you’ve had enough of Big Oil’s dirty deeds.
If they don’t listen to you, then tell them you’re going to vote them out of office. In fact, in this letter, I’ll tell you exactly what to say to your legislator.
But first let me tell you why…
Look up the word “barbarian” in a thesaurus and you’ll find upward of 30 synonyms, all of them grim. Among the standouts are savage, brute, hooligan, thug, wrecker, destroyer and cannibal.
Make no mistake. Oil companies ARE savage, ruthless hooligans. They are deliberately destroying American prosperity… but more importantly, your prosperity.
What’s so awful is that most people have no idea how oil companies have purposely hoodwinked us into thinking oil is the ONLY source of energy we need.
Oil companies want you to think that alternative energy sources such as wind, solar, geothermal and others are just too expensive to use or won’t be enough to satisfy our growing energy demands.
But that’s simply not true. Look, I’m not a tree hugger by any means. And global warming… well, I haven’t seen enough evidence to be 100% convinced it’s not simply Mother Nature wreaking havoc on temperatures worldwide.
Yet there’s one thing I’m convinced beyond a shadow of a doubt: That it’s entirely possible we could reduce our dependency on oil… especially foreign oil.
Other countries are already showing us how to do just that. In Barbarians of Oil, you’ll learn about a little island off the coast of Denmark that gets 100% of its energy needs from renewable sources.
That’s right… 100% of its energy needs come from renewable sources. But have you heard about this island’s success? Not likely.
The name of the island is Samso Island. And what this island has done could completely change your view on the oil industry forever. And believe me, that’s the last thing the oil industry wants. They want to keep you in the dark.
The bottom line is this: The less you know about the truth, the more you become a victim of their costly game. They don’t want success stories like Samso Island getting out to the public.
But let me take a minute right now to share a little of the island’s story with you. Believe me, you’ll be shocked how residents of this island banded together and told…
Once unknown to many people, Samso Island has now become a popular tourist destination. The tourists are there not only to enjoy the popular music festivals, sailing activities and the beautiful beaches, but also to see firsthand how the island won the title as the world’s first 100% renewable energy state.
What do I mean by renewable energy? Well, simply that the island found ways to create energy for things like electricity, heating homes and driving vehicles without using a single ounce of petroleum. Essentially what the island residents did is tell Big Oil to shove it.
You see, back in 1997 Denmark (which Samso is part of) held a national competition for a one-of-a-kind experiment. The winner would be expected to convert all of its energy supply to 100% renewable within 10 years.
Because Samso is an island that has no conventional energy resources of its own, it was the ideal choice for such a controlled experiment. So in 1998, Samso began converting its energy into renewable energy sources.
Of course, the biggest challenge for island residents was transforming their transportation needs into renewable sources. The island government, with the residents’ blessing, enacted a ban on all traditional combustion engines. Why? Well, because combustion engines require the most amount of petroleum.
The island began investing in hydrogen power plants. Using excess electricity from the wind farms they built, the islanders use hydrogen to fuel their vehicles. Sorry, Exxon, no place to sell your bloodstained $5 gas here.
Another project in the works to reduce vehicle fuel needs is using rapeseed oil in place of petroleum. Rapeseed oil is extracted from the seeds and then filtered. Once filtered, it is stored for use in vehicles, including tractors.
You see, tractors use an astonishing amount of diesel, and by replacing it with homemade rapeseed oil, farmers save a lot of money and the island further reduces its dependency on petroleum.
What’s more, the goal to achieve renewable energy independence has created higher-paying jobs and boosted the standard of living for all residents. And get this: Residents take pride in their energy independence.
There’s no doubt what Samso Island has done is truly remarkable. And you can read all about it in Chapter 21 of Barbarians of Oil.
Sure, Samso Island is small and not as populated as the U.S. I’m not suggesting we could achieve what Samso has done and have all our energy needs be 100% renewable. But what their story shows is that it is possible to reduce our dependency on foreign oil.
After all, if a little island can do this, we should be able to do a heck of a lot more than we’ve done over the years to wean ourselves from And yet here’s the sad thing about their story. Experts from different countries around the world have noticed their efforts and are flocking to the island to talk to the local government and residents to see how they can use these ideas in their own countries.
Countries other than the U.S., that is. Nope, here in the U.S. it’s a different story altogether. Oil industries, backed by our very own government, want very little to do with renewable or alternative energy sources. For them, it’s all about keeping us addicted to oil.
Let me ask you a question. How much is “too much” to pay for a barrel of oil?
Some experts argue that $80 is a reasonable price, especially when you consider that in July 2008 oil reached $145 a barrel.
But given the crisis that continues to unfold in the Middle East, it’s possible oil could spike to 2008 levels or, worse yet, go much higher.
In fact, with the protests in Egypt, the cost of oil began to rise sharply. And with increased violence in Libya, prices spiked from around $86 to over $100 per barrel.
While you and I may not be buying barrels of oil, unfortunately every time oil prices climb so does the price of gasoline. That’s because crude oil accounts for about 55% of the price of gas.
Recently prices at the pump have been rising rapidly. In less than three weeks, the national average for the price of one gallon of regular gas rose to $3.79. And if you live in California, you’re paying about $4 for a single gallon of gasoline.
Could prices go higher? Absolutely. Yes, we’ve seen a slight correction in gas prices. But the U.S. Energy Information Administration (EIA) admits that motorists will likely see further increases since the recent increase in crude oil prices has not yet been fully passed through to gasoline prices.
How much more could prices go up? The EIA expects the price of regular-grade gasoline will be roughly 77 cents per gallon higher than it was in 2010.
That doesn’t sound like a lot of money. But here’s the thing. Every time gas prices go up, that puts a dent in your bank account.
Karen Harbert, president and CEO of the Institute for 21st Century Energy, when addressing the economic pain rising gasoline prices inflict on American families, said, “The average American household is expected to spend $2,800 on gasoline this year.”
That’s represents about a 45% spike in expenses to drive yourself back and forth to work… to go to the grocery store to get food… or to take your kids to school. That’s a lot of money to put out each year to drive your car.
What’s worse is that driving isn’t necessarily a luxury. Many of us live in rural areas of the country with no easy access to public transportation. So having a car is the only choice of transportation available, forcing a lot of Americans to be at the mercy of the oil industry.
Now let me ask you another question. If paying $5 for gas or $80 for a barrel of oil is reasonable, then how many lives sacrificed for the sake of oil are too many?
Here’s the sad truth. When it comes to lives lost, to date, 5,885 U.S. soldiers have given their lives fighting for Middle East oil. Commenting on lives lost, former President Bush once said that the outcome of the war “will merit the sacrifice.”
Have any of those lives lost saved us a cent in gas? Or helped us acquire a more secure source of oil? The answer is nothing has changed.
We are just as dependent on Middle East oil as we’ve ever been. As for those lives lost, I’m not certain that any death over oil merits the sacrifice, especially when you consider that most of the oil we use comes from countries that have created a powerful cartel against us.
Worse yet, many of those countries openly voice their hatred for America. Yet we continue to use more and more of their oil.
What most people may not realize is that the U.S. is the world’s largest consumer of oil, using about 20 million barrels every day. And get this: Most of the oil we use is imported from foreign countries.
In 2010, we imported over 4.2 billion barrels of oil at an average cost of about $79 a barrel. That means as a country we spent about $336 trillion on oil. Or to put it another way, that’s hundreds of trillions of dollars we are sending our overseas enemies.
Remember how I told you gas prices are on the rise? Well, of the petroleum we use, over 70% is solely for transportation purposes.
Yep, that’s right. Almost all of the oil we use is for getting around. Not for heating our homes. Not for manufacturing products. Nope, the largest amount is used just for transportation.
Now, don’t get me wrong. I’m not trying to put all of this on your shoulders. And I’m not trying to make you feel guilty about driving your car.
In fact, if there’s anyone to blame, it’s our government, auto manufacturers and oil companies. That’s why I call them…
One of the reasons Samso Island had such success in reducing its dependency on foreign oil is that the residents had the FULL backing of their government. Unfortunately, that’s not the case here in the U.S.
The truth is, our government backs the oil industry. You know the stories of how corporations with the deepest pockets get the most votes. Well, the oil industry has some pretty deep pockets, big enough to influence Congress.
Here’s what I mean. Over the past 11 years, oil companies and their cronies have spent roughly $2 billion on lobbying activities to stop Congress from enacting regulations that would make them clean up their activities.
On top of that, the American Petroleum Institute, an organization made up of oil and energy companies, spent $11 million lobbying Congress to defeat pollution restrictions AND maintain certain industry tax loopholes. Together, that’s about $181 million a year.
The numbers could be higher. That’s because oil companies spend millions on political advertising campaigns, but they don’t have to classify them as lobbying efforts.
On top of this, oil companies that donate money to trade associations are allowed to keep that information secret. So we can’t say for sure how much money oil companies actually spend to influence members of Congress, but you can imagine, it’s a lot!
Have their lobbying efforts paid off? You bet! To date no legislation has been passed and industry tax loopholes still exist. The head of the Public Citizen’s Energy Program, Tyson Slocum, says, “Politicians routinely deliver on campaign contributions that are provided to them, by giving goodies to the industry.”
But what’s so awful about a few tax loopholes? Well, when they add up to about $35 billion a year, it’s a big deal.
Did the government give you any special tax loopholes to help you pay less in taxes each year? Did they help offset the costs of rapidly rising gas prices?
Even worse, the oil industry is using the fat profits they collect from you at the gas pump to continue lobbying for your economic demise. You can see why I call them “barbarians.” They have no compassion for your plight.
The binding ties of the oil industry to Congress run deep. For example, the oil industry has been “heavily invested” in the state of Louisiana. Louisiana Senator Mary Landrieu has received $758,000 from the industry.
There seems to be a long list of BP officials who have donated generously to Landrieu. The current president of BP America, Lamar McKay, gave $1,000 to Landrieu’s 2008 re-election campaign. Robert A. Malone, previous president of BP America, gave $2,300 to Landrieu’s campaign.
Now what’s interesting about this is that $2,300 was the campaign contribution maximum amount allowed. This means the former president of BP dumped every penny he legally could into Landrieu’s campaign.
That’s not all. Margaret Hudson, BP America’s vice president, gave $1,100. Benjamin Cannon, BP America’s federal affairs director, gave $2,300. In fact, Landrieu topped the list of members of Congress who received money from BP. In return, she’s become one of their biggest allies.
Of course it wouldn’t be fair to talk about special favors the oil industry receives without mentioning the man who provides the most favors.
The old saying “It pays to have friends in high places” couldn’t be truer for the oil industry, especially when George W. Bush was president. In 2005, Bush signed an energy bill that gave $14.5 billion in tax breaks for the industry.
Interestingly enough, at the time, Bush received more money from the oil and gas industry than any other politician.
But here’s what truly demonstrates the political connection to the oil industry. During his presidency Bush asked Vice President Cheney to head up a special task force to help develop the country’s energy policies.
Cheney recruited executives from Exxon Mobil, ConocoPhillips, Shell, BP and Chevron to sit in on his special task force. In reality, the task force was a meeting of the big oil companies to enact regulations that favored their industry.
Many of the components in the energy bill Bush signed were recommendations made by the task force. In addition to tax breaks for the industry, the task force did away with exemptions that the industry didn’t consider beneficial.
When information about the task force became public, many of the oil company officials denied they attended these meetings. In hearings held in 2005 before both the Senate Energy and Commerce committees, executives said they had not participated in meetings with Cheney or were not involved in the task force.
However, The Washington Post had obtained documents that showed otherwise:
On April 17, the task force met with Royal Dutch/Shell’s chairman, Sir Mark Moody-Stuart, and two other oil company executives.
The group met again on March 22, this time with BP regional president Bob Malone, chief economist Peter Davies and company employees Graham Barr and Deb Beaubien.
Turns out these special task force meetings were held in secrecy. On the matter, Senator Frank Lautenberg, D-N.J., said, “The White House went to great lengths to keep these meetings secret, and now oil executives may be lying to Congress about their role in the Cheney task force.” You can say this is cronyism at its finest.
So besides Congress and the president, who else aids the oil industry? If you guessed the automobile industry, you’d be right.
For years, the auto industry has dragged its feet on producing cars with higher fuel efficiency. The industry says it sells the kind of car the public wants and so far, fuel efficiency just hasn’t made it to the top of the list.
But the Consumer Federation of America says a national survey shows that most consumers support 60-mile-per-gallon (mpg) fuel economy standards.
Is it possible to make cars that achieve these kinds of fuel efficiency standards? The automobile industry would like you to think increasing fuel efficiency in cars is almost impossible.
However, a spokesperson for the Alliance of Automobile Manufacturers says, “There’s no question that the technology exists or that the technology will exist to achieve these goals.”
In fact, the industry has already shown it can improve fuel efficiency. The first standards went into place in 1978. The goal was to double the 1974 passenger car fuel economy average to 27.5 mpg by 1985.
Although the standards increased to 27.5 mpg, the auto industry isn’t jumping for joy. Automakers, the ones bailed out by their friends in Washington, say that increasing fuel efficiency means costs will rise and fewer Americans will be able to buy new cars.
The industry also says that in order to build more efficient cars they will have to be made from lighter materials, reducing the weight of the vehicles, which will make them unsafe in an auto accident.
But David Friedman, engineer and director of the Union of Concerned Scientists, who has been studying these types of issues, doesn’t agree. His group designed a minivan — using the same current technology available to automakers — that achieved higher fuel efficiency and lower greenhouse emissions without altering the weight of the vehicle.
Then there’s the study done by the National Academy of Sciences in 2002, which showed that the auto industry could be making midsize SUVs that achieve 34 mpg, a minivan that gets 37 mpg, a pickup truck that gets 30 mpg, and a family car that gets 40 mpg.
Think about it like this. In 1908, when Ford introduced the Model T, it averaged about 17 mpg. Seventy-seven years later, 27.5 mpg became the average. This means automakers have managed to increase the average mpg only by as little as 0.35 for each year.
However, during that same time span we’ve seen better aerodynamics, more powerful engines, improved airbag safety and a host of other technological advances, including built-in GPS systems, Bluetooth capabilities… even cars that can parallel-park themselves. But we don’t have the technology to increase fuel efficiency?
Doesn’t make sense at all. Isn’t increasing fuel efficiency possible? I believe so. That’s why I encourage you to call, write or email your Congressman and tell them enough is enough!
It’s time we put an end to this madness. Our oil addiction is causing…
Look, here’s the thing. Our oil addiction, especially from countries that are unstable or at direct odds with the United States, such as Iran, adds serious cost implications to our economy.
According to the U.S. Department of Energy, disruptions in supply and sudden price hikes have cost the U.S. $7 trillion over the past 30 years. The Department of Transportation also estimates that each $1 billion of trade deficit costs 27,000 American jobs. Oil imports account for one-third of the total U.S. deficit.
The National Defense Council Foundation (NDCF), a Virginia-based research and education institution that studies the impact of the oil industry on the U.S. economy, says the direct loss of economic activity arising from U.S. oil import dependency amounts to $117.4 billion.
In addition, the NDCF found that importing oil costs 2.4 million American jobs.
The NDCF also says the United States is capable of reducing imports by 40%, but that number could reach 75% in 15 years.
James Martin, chairman of the NDCF, says, “If we do not decrease our dependency, America will see the hemorrhage of cash for oil imports grow and its enemies strengthened.”
It’s clear something has to be done to reduce our dependency on foreign oil. It’s costing you money in unfair and higher taxes. And it’s costing jobs here in the U.S.
But it’s clear you can’t rely on Big Oil to stop their barbarian ways. And obviously not even Congress or the president is willing to turn against them.
Something has to be done. That’s why I say…
I’m encouraging everyone reading this letter to call, write or email the legislator in your area and tell him or her to put an end to this madness. Heck, I’ll even give you a prewritten letter that you can just add your name to and then mail.
But before you do that, please get your hands on a copy of Barbarians of Oil so that you know the whole truth. You and I both know that politicians don’t like to make changes unless they are PUSHED into action.
That’s why it’s important you know every detail of the oil industry before you make that call or write your letter. All the details, including how the industry works, the favors that are bestowed upon them by Congress, the long list of oil spills that have wreaked havoc on the environment, not to mention the cost you and I pay in millions in higher taxes, the blatant disregard for the environmental damage they’ve caused in countries like Nigeria… and so much more are in Barbarians of Oil.
Bill Bonner, president and founder of Agora Publishing and best-selling author, says, “Outside of sex and religion, nothing is more fascinating that the story of oil. Its many effects on modern economies can scarcely be counted, let alone fully measured. In fact, oil — cheap oil — may be an essential ingredient for our standard of living as well as our style of living. Sandy Franks gives us another way to look at it… another way to understand this amazing story. Everyone should read this book.”
Dan Denning, author of The Bull Hunter: Tracking Today’s Hottest Investments, writes, “People have been shedding blood for oil for over 100 years now, Sandy Franks tells us in Barbarians of Oil. She and Nunnally show how the Industrial Revolution was really an Energy Revolution — with crude oil as the powerful King. And now, we learn how oil’s bloody reign could end and how investors could profit from a new era in energy.”
Myles Norin, CEO of Agora Publishing, writes, “Authors Franks and Nunnally have done readers a great justice in Barbarians of Oil by exposing the dishonest tricks and tactics oil companies use to hoodwink us into thinking we have no options for energy than oil. What’s worse, Washington bureaucrats and automobile manufacturers have supported their antics for decades.
“The authors show us in plain truth and mince no words that Big Oil has set us on a path of economic destruction by relying solely on oil. This is a must read, especially as oil tops $100 a barrel.”
You can order Barbarians of Oil right here, right now. Just click this link to place your order.
When you do, you’ll save about 35% off the official jacket price of $27.95. But that’s not all.
As a free bonus, I’ll also send you a prewritten letter of action you can send to your congressman or senator, asking them to stop buying foreign oil and start investing in alternative energy sources.
All you have to do to receive a copy is email a receipt for your book purchase to taipan@taipanpublishinggroup.com with “Send book letter” in the subject line… and we’ll forward you this letter of action to tell your representative you’ve had enough!
While we may never match the success of Samso Island, we can dramatically reduce our dependency on foreign oil. Wouldn’t you like to think America, one of the greatest countries in the world, is capable of so much more?
Do you want to continue to pay $5… $6… even $7 for a gallon of gasoline? Do you want to see more soldiers die for Middle East oil?
No one does. But it will be up to you and me to make a difference. All it takes is one simple phone call, letter or email to your legislator. Don’t be a victim any longer. It’s time to tell the oil industry to take a hike!
But you must act quickly. With China emerging as the world’s second-largest superpower, how long will it be before we are in head-to-head competition with them for a barrel of oil?
Already China’s oil consumption grows by 7.5% per year, seven times faster than the U.S. With real gross domestic product growing at a rate of 8-10% a year, China’s need for energy is projected to increase by 150% by 2020.
A report by the International Energy Agency predicts that by 2030, Chinese oil imports would equal imports by the U.S. today.
Just like the U.S., China has become increasingly dependent on Middle East oil. Today, 58% of China’s oil imports come from the region. By 2015, its share of Middle East oil will stand on 70%.
And here lies the danger. China is already strengthening its strategic ties in the Middle East. Unlike the U.S., China isn’t suffering a $14 trillion budget deficit problem.
China has $2 trillion in cash reserves, enough to buy billions of barrels of oil. How long will it be before we are paying $200… even $300 for a barrel of oil?
Is that too much to pay? The answer is YES. That’s why our addiction to foreign oil must end. No matter what your political beliefs or affiliations are, don’t let the oil industry ruin American prosperity.
Take action now. Get a copy of Barbarians of Oil right away. Then email, write or call your legislator.
Let’s make a difference in our country’s future.
P.S. Standard & Poor’s has downgraded America’s debt outlook to negative. The S&P says there is material risk that U.S. policymakers might not reach an agreement on how to address medium- and long-term budgetary challenges by 2013. That downgrade shocked oil futures prices, which shot up to $121 a barrel. Time is of the essence. Please get your copy of Barbarians of Oil now.
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