The Energy Monopoly

Yesterday I put forth some reasons why it's possible the existing automobile industry benefits from laws in place which are designed to support the safety of our citizenry, but may unintentionally bring wealth to those who support the status-quo, and hurt the financial safety of our citizenry. Today I'd like to put forth some more reasons why the present state of energy in our country is beneficial to the existing powers in the automobile industry, as well as existing powers in the energy industry. When I say the energy industry in this post, I'm strictly referring to suppliers of oil, natural gas, and fossil fuels, not power plants or other means of electricity generation. I will get to those power suppliers at a later time.

You know the names, BP, Shell, Exxon, these are the oil companies that we're all familiar with.¹ (For a list of the 25 biggest oil companies in the world, click here)  Is it possible that oil companies, as well as automobile companies, benefit from laws which already exist that stem production in the area of alternative fuels? If auto manufacturers benefit from the plethora of laws that perpetuate the status quo in their sector of the transportation industry, as my last post posits, then we can take for granted that oil companies stand to benefit as well, since more than 95% of the transportation industry is powered by oil and fossil fuels.²

This means that oil companies are raking in extra cash on a daily basis, maybe even more cash than is due them, as a result of laws that are supposed to keep consumers safe. Would you've ever thought that your state's seat belt laws, airbag laws, and other laws of similar nature would be what's keeping you filling up at the pump and paying $60 or more a tank, instead of having an alternative, more cost-effective, more economic way to get around? Me neither, yet the connection seems to be there.

I regularly hear other people voicing distress about the energy monopoly and how bad it is for our nation's economy. If these people knew that laws exist that favor "big auto" and "big oil" do you think they would recant their support for those laws? I would hope so.³ Unfortunately, one of the major foibles of our democratic majoritarian nation is that we oftentimes overlook the long-term consequences of a policy-change decision, in favor of the short-term benefits the policy-change decision can make for a certain group. We would do well to cede ourselves from doing this, and look to the legislation that's been passed in the energy industry as a case-in-point.

-Notes-

1. Oil has recently become synonymous, in large-scale energy generation, with natural gas and other fossil fuels. For the purposes of this essay, I will assume that oil refers to all these terms in tandem.

2. "Fossil Fuels Archives - IER." IER. Web. 20 May 2014. <http://instituteforenergyresearch.org/topics/encyclopedia/fossil-fuels/>.

3. There are also laws that work against the "big auto" and "big oil" partnership, which I will continue to address in the weeks ahead.