Mike Baker: We Can't Afford to be Ignorant Anymore

“Somebody has to do something, and it’s just incredibly pathetic that it has to be us.”
Jerry Garcia

If you’re like me, and let me first extend my condolences if you are, then you have absolutely no idea how the daily price for a barrel of oil is determined.

Think about that for a minute. Seriously. Sit, ponder and be amazed over how little you understand the process of pricing oil. Every couple of hours we’re setting a new record high price for a barrel of light, sweet crude and yet you, me and all the other shmendricks paying for the stuff don’t have a clue why the price is where it is.

But don’t feel bad. According to research carried out by the PWB’s skilled but surly interns, there are only five, possibly six persons in the entire United States who might have what could be described as an “understanding” of the oil pricing process. The rest of us are simply here to pump the gas and pay the price.

It’s important to note that I’m not suggesting the existence of a conspiracy designed to keep us in the dark over an issue that should have us marching in the streets. Negatory. As faithful readers of the PWB know, nothing irritates me more than a conspiracy theorist. No, we’re in the dark because collectively I believe we’re too stupid to understand how a barrel has now gotten to be above 135 clams and how that same barrel tomorrow might rocket up to $145.

Note: Take no offense at the “stupid” label. I’m including myself and of course the PWB interns and staff in this category. I’m simply suggesting that collectively we’re not that bright on the subject.

We’re in this position because nobody wants to admit that they don’t know what they don’t know. And unfortunately, the handful of smart kids aren’t talking.

Instead, we have to sit in front of the television and listen to politicians, Democratic and Republican strategists, journalists, pundits and complete wankers give their keen insight into why oil costs so much. The folks I’ve heard banging on about this critical issue lately have about as much understanding of the complexities of oil pricing as my dog Idiot. And by that I in no way mean to insult Idiot.

Whether they’re talking about ANWR and expanding the search for oil, the effects of speculation on pricing, refining capacity, global demand or alternative fuel possibilities, everybody is a freakin’ expert. Well, I’d like to suggest that it’s time for all those who aren’t experts to shut up, and for those that actually do understand to get busy talking.

It’s time for a national education campaign designed to smarten us all up a bit. Here’s what I’d like to see… how about a special two hour program broadcast simultaneously on all the networks, cable news outlets and even that crazy information superhighway focused on explaining to the American public what makes a barrel of oil cost what it does. Don’t muddy the waters by discussing alternative energy options. That can be the subject of the next two hour broadcast. This first program is simply to tell us why we’re paying record high prices for oil.

Am I being too demanding? We’re all getting screwed… I just think I’d feel better about it if I knew why. No politicians, strategists, media or other straphangers would be invited on the show. They could come on after the program to tell us what it is that they think we heard and how we should think about it.

The guests would include petroleum engineers, oil executives, commodities traders, oil brokers, refinery executives and anyone from the financial sector who actually possesses relevant knowledge. They would simply walk us through, obviously in layman’s terms, how oil that costs a few bucks to stick in the barrel ends up priced at $130 plus for that same barrel. I for one would like to know.

Admittedly the topic is a bit dry, but I have enough faith in the average citizen to believe that they will sit themselves down and take the time to listen as the experts explain what’s up with the price. There will not be a question and answer session, and honest to God if anyone suggests we take questions from internet viewers I’m going to puke. Let the folks in the know share the wealth for two hours without some blogger pointing out that this whole thing is the result of a grand Dick Cheney conspiracy to screw the world. I don’t believe that’s too much to ask.

I suppose what has me most cheesed off with the current energy situation is that it’s becoming simply another political issue for the two campaigns to kick around. At the best of times it would be tough enough to create transparency around the problem, seriously discuss the various related issues and look for workable solutions. Having an intelligent discussion and agreeing on a course now with the election season in full swing ain’t gonna’ happen.

Instead, we get inane discourse and options reduced to either/or propositions. One side says drill more, the other side says that’ll take too long. One side says speculators are responsible, the other side says their influence is negligible. One side says tax the oil companies more, the other side says they already pay 40 per cent in tax and additional tax would stifle the economy. Meaningful dialogue designed to get us a comprehensive energy plan? What a load of crap.

Color me pessimistic, but I think something less than squat will be accomplished between now and next year when the new administration takes over. Given that likelihood, shouldn’t we at least use the time well by educating ourselves about the oil industry. As much as we’d all like to power our cars with air, hydrogen, pudding or used fryer grease, those technologies will take years to advance and become commercially viable.

In the meantime, we’ll need to be dealing with our old friend the hydrocarbon. If we’re going to continue spending an ever increasing amount of our paypacket on gas, which in turn impacts what we pay for ding-dongs and beer given increased growing, production and transportation costs, I want to know what it’s all about. Alfie.

Because if you’re like me, you’ve got a gnawing hunch that someone is making money as a result of the price increases. Sure lots of folks up and down the production chain are simply reacting to the price increases and getting squeezed despite raising their own prices. And some of the players, including I suspect the oil companies and producing nations, would actually prefer to see the price drop to somewhere around $100 per barrel.

But somewhere in this mess there are undoubtedly people who are profiting from the increases. I’m not necessarily begrudging them their profits… God bless the free markets. I just want to know who they are, and how they make their jack.

I suspect that producing this type of public education programming would be relatively easy. What oil expert, executive or finance guy wouldn’t want to be seen as being well informed, magnanimous and keen to do their part. The networks and other outlets would need to contribute the time, but they’re a selfless and public spirited lot, I’m sure they’d get on board once we identify what’s in it for them.

My pessimistic interns, particularly numbers two and three, tell me that nobody would tune in to watch a show that objectively explains the oil industry and the economics of pricing. I tend to be more optimistic. I also believe we’re getting to the point where we can’t afford to be ignorant anymore. But that’s just my opinion.

Till next week, stay safe.

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Mike Baker served for more than 15 years as a covert field operations officer for the Central Intelligence Agency, specializing in counterterrorism, counternarcotics and counterinsurgency operations around the globe. Since leaving government service, he has been a principal in building and running several companies in the private intelligence, security and risk management sector, including most recently Prescience LLC, a global intelligence and strategy firm. He appears frequently in the media as an expert on such issues. Baker is also a partner in Classified Trash, a film and television production company. Baker serves as a script consultant, writer and technical adviser within the entertainment industry, lending his expertise to such programs as the BBC's popular spy series "Spooks" as well as major motion pictures and two new BBC drama series finishing production in the U.K.

Mike Baker is the Co-Founder of Diligence LLC, a leading global intelligence, security and risk management firm. Prior to starting Diligence, Mike spent over a decade and half with the CIA as a covert field operations officer. He is a regular contributor in the national and international media on intelligence, security, counterterrorism and political issues. He appears regularly on Fox News, as well as other major media outlets.