by Lee Fang. Posted June 6 on Thinkprogress.org
The Koch Industries front group Americans for Prosperity is preparing a tour across America “aimed at trying to put the blame for high gas prices on the Obama administration.” The tour will feature multiple campaign-style rallies, a website, and radio and television advertisements. The tour will demand that Obama increase domestic drilling — even though domestic oil production is at an all time high and further drilling will do nothing to affect prices.
Koch’s relaunch of Drill Baby Drill appears to be a crass attempt to distract Americans from a true driver of high prices: oil speculation, coming from companies like Koch. In fact, a new ThinkProgress investigation of Koch’s oil speculation business reveals that Koch is perhaps the most important player in distorting oil markets for private profit.
Our report highlights:
- Koch’s role in inventing modern oil derivatives.
- Koch’s alliance with Enron and the Gramm family in deregulating oil speculation, first in the early ’90s then again ten years later.
- Koch’s participation in unregulated exchanges, and the ways in which it uses its political power to allow excessive oil speculation to continue.
Experts contacted by ThinkProgress pin the blame for sky-high prices and record volatility on excessive oil speculation, the oil market corrupted by unregulated Wall Street traders who buy and hold onto oil futures contracts with no interest in the actual delivery of oil. Koch Industries — generally known as an oil pipelines and refining company — is also on the forefront of speculating on oil for profit.
Even Goldman Sachs concedes that at least $27 of the price of crude this year has been a result of rampant speculation, not supply and demand. Other experts contacted by ThinkProgress have said the number is closer to fifty dollars. To read our report about Koch Industry’s long and sordid history in the oil speculation business, click here.