Learsy book exposes corruption in oil

SHARON — Amid the hubbub concerning $4 gas, finding domestic energy sources, climate change, Big Oil and the ever-turbulent Middle East, there is Raymond J. Learsy, who says the entire game is rigged.Learsy, a Sharon resident who writes for The Huffington Post website, has just published his second book, “Oil and Finance: The Epic Corruption,” which packages his columns from 2006 through 2010.Learsy, a retired commodities broker, says that the Organization of the Petroleum Exporting Countries (OPEC), and its most important member, Saudi Arabia, have been ripping off the world — and in particular the United States, the world’s largest consumer of oil — for decades.The Saudis maintain that $75 per barrel is a fair and ideal price, Learsy said. “They’ve always been posturing. Once they set the benchmark price, if it then comes down, they want kudos. If it goes up, they restrain supply to give the impression to the marketplace that they are striving to meet demand. “Which frightens people.”The U.S. federal government and the American oil companies don’t help, either.Learsy said of the Saudis, “They are enormously influential. They have constructed a fiction that they are really our friends, and that fiction is underscored by the influence they have accumulated along the Beltway” in Washington, D.C.The federal government replenishes the Strategic Petroleum Reserve at what Learsy considers extortionate prices, and the Saudis use the money to shore up their regime, in part by funnelling cash to Islamist movements that are actively anti-American.And American oil companies cooperate in the game. “Understandably,” said Learsy. “Oil producers want the highest price possible.”Attempts to do something about it have not been successful. Witness the “NOPEC” bill, which has been around in some form since at least 2000.NOPEC “would have permitted the Justice Department and the Federal Trade Commission to examine antitrust ramifications of the national oil companies of the OPEC nations,” said Learsy.“If there was collusion on that level by U.S. companies, it would run smack up against antitrust laws.“But OPEC and their national oil companies are able to hide behind the sovereign exemption” — meaning that national oil companies are not subject to the rules that govern the private sector.Doesn’t the U.S., as the single biggest customer for oil in the world, have any clout?“Sure, we would in any other business. But it is in the interests of the oil companies to be as silent on that issue as possible. OPEC colludes for them. It makes it impossible for us to take a forceful position.”What can be done?Learsy has a couple of ideas for fighting back. One is forming a grain cartel.“The U.S. was once an agricultural economy. It’s a deep tradition. We have the greatest expanse of productive farmland in the world. Without even focusing on the issue, we are the largest grower and exporter of corn, largest exporter of wheat, second in soybeans. “There is a dynamically growing population in the world. We have reached the near-limits of the Green Revolution; we can only enhance production so much more.“With the [world] population going up the situation is far more acute and focused than anything that oil and energy has brought us to date. Food is still more important than the convenience of riding somewhere in the car. That’s where the real issues are going to evolve economically and politically.“And we are the nation that is able to be the most helpful. A grain cartel would give us the kind of standing and influence — if we wanted to use it — that the Saudis have, but in a much more fundamental way.”“Oil imports would be subject to permits, from one day to the next. One day we could decide to import no more Venezuelan oil. Sorry, Mr. Chavez. Just the idea that we have that power changes the relationship.”In the book, Learsy writes that tactics like these could destabilize hostile regimes, such as that in Iran, without military action.He advocates domestic exploration and production as well. “Natural gas has changed unbelieveably in the last five years. The proven reserves are up by a factor of five,” to the point where the U.S. is now an exporter of liquid natural gas.“And our shale oil reserves are probably equivalent to the Saudi reserves.”And then there’s Alaska and the Gulf of Mexico.Learsy points to Norway’s national oil company as an example of what can happen. “It’s a wonderful example of a national treasure used for the benefit of citizens without the corrupting influence. It’s a functioning democracy. In Norway the people who find, produce and distribute oil are heroes.”Asked if Americans would be leery of yet another big government apparatus, Learsy replied, “In many circumstances I would agree with that, but the power of the oil industry has effectively neutralized government action. And the misinformation is staggering.”He claims that a lot of the misinformation comes from The New York Times — a favorite Learsy target is the reporting of Times reporter Jad Mouawad, who, according to Learsy, might as well simply rewrite Saudi and OPEC press releases.In one of the pieces in the book, Learsy calls the Times “a pliant mouthpiece” for oil interests.Learsy is an equal opportunity offender, critical of politicians across the board. He slams the Bush administration for replenishing the Strategic Reserve at high prices (“stop replenishing it,” he said bluntly) and said Vermont Independent Sen. Bernie Sanders’ recently expressed outrage at oil speculators is missing the point.“It’s not the speculators,” he said. “It’s the structure that permits it.”To read Learsy’s Huffington Post posts, go online to www.huffingtonpost.com/raymond-j-learsy.

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