EU-DIGEST - special edition

Nineteen years ago, the fall of the Berlin Wall effectively eliminated the Soviet Union as the world's other superpower. Yes, the USSR as a political entity stumbled on for another two years, but it was clearly an ex-superpower from the moment it lost control over its satellites in Eastern Europe.

Less than a month ago, the United States similarly lost its claim to superpower status when a barrel crude oil roared past $110 [it has crossed $ 130 -- Ed] on the international market, gasoline prices crossed the $3.50 threshold at American pumps, and diesel fuel topped $4.00. As was true of the USSR following the dismantling of the Berlin Wall, the USA will no doubt continue to stumble on like the superpower it once was; but as the nation's economy continues to be eviscerated to pay for its daily oil fix, it, too, will be seen by increasing numbers of savvy observers as an ex-superpower-in-the-making.

For the complete report from IOutlookIndia.com click on this link

These days Europeans and most other people around the world feel they are getting soaked of every last penny from their government and big business on fuel prices. The question is who is right here and who is wrong, or is everyone to blame?

The recent testimony of Big Oil executives on the US Capitol Hill is a classic case-in-point of the charade going on about energy and oil prices. Government policy spinners from both the left and the right marketed this hearing to the US public as a "stern interrogation" of those mainly responsible for the US’s rapidly deepening energy crisis. Afterwards the whole testimony turned out to be a dog-and-pony show. Despite the big oil corporations’ record profits, their pursuit of price gouging probably explains no more than 10 percent of the current price of gas at the pump. So, probably the whole focus on the oil companies, ruthless as they may appear to be, is simply a distraction.

Let's face it: If anyone would care to study the facts - there is a problem somewhere in what we are being told. Statistics show that the demand for oil products did not double magically in the past two years. China, India or any other country's economy or demand for oil has not progressed twofold in the last two years.

It is also hypocritical for the U.S. to demand that OPEC meets its energy needs while the US refuses to pursue all the supply options at hand. Moreover, trade relations go two ways. If the US wants to exercise its "God Given Right" to cheap oil, then Saudi Arabia should demand cheap wheat in return.

The fact is that the price for oil has mainly gone higher because the dollar, which still is pegged to the sale of oil, has devalued considerably against stronger currencies like the euro and the Yen.Increased demand and depleting supplies is another factor, manipulation of the oil market shares by dishonest stock brokers is another one, While the going was good many governments also increased taxes on gasoline and other oil related products, without any valid reason.

So it seems the screws must not only be tightened on the oil companies, but also against governments. What every responsible government should be doing now is putting energy conservation programs on top of their agenda. That is the secret to solving the so-called global energy emergency. Unfortunately they are not, because most of our political leaders want this issue off-the-table, for motives which mainly have to do with greed and shortsightedness. They are doing it in this way because they know that attacking the energy crises in a more open and direct way would probably deal a deadly blow to corporate capitalism. It would also mean the end of what is now the dominant force of energy squandering in the uncontrolled world free market system.

Don't be fooled, regardless of what the corporate press or your government might be saying. The oil crisis is here to stay, despite the periodically manipulated price fluctuations. All the effective solutions to the energy crises are on the demand-side. Efficiency, conservation and proximity are the keywords here. To be able to make meaningful sacrifices and adjustments, governments will need to be more honest with their constituents. The time for change is not tomorrow but today. Everyone will have to scramble like crazy to develop, make and distribute as much wind, water, bio-gas, and solar technology as makes sense.

In the end our energy problems can only be solved by ourselves through smart, effective and innovative programs. Sometimes we tend to forget that we the people elect governments and that we are the source feeding corporate capitalism. It is high time we start using that power more effectively to change our energy habits.

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This time it is different. True, this is an oil shock akin to those that struck the world economy in the 1970s, for the price of oil -- even allowing for inflation -- is now a lot higher than it was at the 1979 peak. Those shocks pushed the world economy into two recessions, in the mid- 1970s and the early 1980s, and helped drive inflation into double digits in most of the developed world. Unemployment soared as interest rates were raised to try to curb inflation. But then the oil price fell back again as new fields came into production and countries made a start on conserving oil.

So will the surge in the oil price have similar consequences this time? It is a tough judgment because we don't know how high oil will go, but it looks likely that this oil shock will have a less damaging impact than in the 1970s. However, since the price is unlikely to fall back as far, it will have a more lasting impact on our way of life.

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