The growing anger over record high gas prices has fueled a national debate on energy.

Workers, already coping with job losses, home foreclosures, and threats to the social safety net, are now hit with gas prices of around $4/gallon, more than 60 cents higher than the beginning of the year.

In response, Republicans and Democrats are making campaign promises to address energy costs by allowing energy companies to have nearly unregulated access to all federal lands and waters. But neither party is discussing the urgent need to seriously address climate change through massive reduction in fossil fuel use. Meanwhile, oil speculators and Wall Street continue to rake in huge profits.

Gas Prices Fuel Debate

While global demand and instability in oil-producing regions are undoubtedly factors, simplistic supply and demand arguments are not enough to explain current prices. In the U.S., domestic oil production is up almost 25% from 4.95 to 5.7 million barrels a day since 2008. Yet gasoline use is at a 10-year low, (NY Times, 3/22/12).

What is on the rise is future demand for oil and petroleum products. Speculation now comprises over 60% of the commodities market. A recent Goldman Sachs report indicates speculation in the oil market adds about $0.56 to every gallon!

The anger over rising gas prices has the Republicans eager to blame Obama. With his “Drill Here, Drill Now, Pay Less” campaign slogan, Newt Gingrich made false claims that expansion of domestic production and approval of the Keystone XL pipeline would yield prices of $2.50 per gallon. Oil would have to sell below $50 per barrel before gas prices would fall to $2.50, which would make new domestic and Canadian oil production unprofitable.

Easily accessible oil and gas reservoirs (i.e., conventional oil) have been in decline since 2006, spurring countries to invest in non-conventional oil production to keep up with the rising demand. Conventional oil requires relatively little up front energy costs to produce because it is physically easier to extract. Non-conventional oils (e.g., shale oil) are typically denser than water, and some are solid at room temperature, so extracting and refining them involves massive amounts of energy.

New domestic oil production relies on developing non-conventional oil and gas sources.

Hydraulic fracturing technology (also known as “fracking”) was developed in the 1970s to unearth large shale oil and gas reserves. This method involves injecting millions of gallons of water and toxic chemicals into the bedrock, causing the ground to fracture and allowing oil and gas to move through the newly created fissures. This process yields significantly smaller returns on energy invested and is only profitable if oil is priced above $70 per barrel. Expanding production in the U.S. will not lower prices for consumers, but will bring in more profits for oil companies and speculators.

The Oil Companies Have Two Parties

Obama has responded to the Republicans by boasting that his administration has overseen the largest expansion in domestic oil production since the 1960s, making steps toward “energy independence” along the way. According to Obama, “We want U.S. oil companies to be doing well…That’s why…we’ve opened up millions of acres of federal lands and waters to oil and gas production,” (whitehouse.gov, 3/29/12).

The Obama administration recently approved a plan to drill for oil in the Arctic and has announced plans to allow energy companies to conduct seismic studies off the East Coast to detect oil and natural gas. Meanwhile, oil production has undergone a “revolution” in the U.S. in recent years because of new technology. Some experts say that domestic oil production could rise to 10 million barrels a day in the next decade (NY Times, 3/22/12), although the U.S. consumes roughly 18 million barrels a day. So, despite an improving trend, there is little chance of energy independence if we continue to run society with oil.

This massive expansion of fossil fuels production is essentially a continuation of the Bush administration’s approach, based on the Energy Policy Act of 2005 crafted by Dick Cheney’s secret task force that included oil company executives. The legislation completely undermined environmental regulations and opened the door to a massive expansion of oil drilling.

“Our dependence on foreign oil is down because of policies put in place by our administration, but also our predecessor’s administration,” said Obama, quoted in the NY Times. “And whoever succeeds me is going to have to keep it up,” (3/22/12).

While Obama’s “All of the Above” energy strategy includes sprinkling in some limited renewable energy initiatives – and assisting the construction of the first new nuclear power plants in the U.S. in three decades! – his major reliance on a massive expansion of fossil fuel production shows neither corporate party is committed to seriously challenging global climate change.

It’s easy to understand this madness when you consider the fact that big oil spends hundreds of millions of dollars lobbying Congress. In fact, Senator Obama was the number one recipient of cash contributions from BP, the giant oil company responsible for the massive 2010 Gulf of Mexico oil spill (Politico, 5/5/2010), and candidate Obama received $884,000 from the oil and gas industry during the 2008 presidential campaign (Truth-out.org, 6/9/2011).

The Scope of the Problem

Since 2001, the Intergovernmental Panel on Climate Change has clearly showed that global warming was mostly attributable to fossil fuel emissions. Global temperatures have risen by about 1.5 degrees Fahrenheit, causing significant melting of mountain glaciers, sea ice, and ice sheets.

Sea levels have risen about half a foot, globally, and now threaten to drown small island nations and flood coastal regions where most of the world’s population lives. Climate scientists have warned if we don’t take drastic action within this decade, we may not be able to stop the worst effects of climate change. These effects include severe drought lasting decades, torrential flooding, and unpredictable weather.

New extraction technologies, that both political parties support expanding, produce two to four times more greenhouse gases than conventional oil production. Fracking is linked to methane contamination in drinking water (PNAS, 2011) and increased occurrence of small earthquakes (USGS Open-File Report, 2011).

Yet the technology required to transition our society away from fossil fuels already exists. A November 2009 study in Scientific American lays out a plan to transition the entire global population away from non-renewables in just twenty years, with power harnessed from wind, solar, and water. The authors point out that the capacity to build the necessary infrastructure is within our capabilities and is not significantly more expensive than current practices.

Clearly, the lack of necessary technology is not the problem. Already heavily invested in non-conventional oil production, energy companies and governments have no economic incentive to simultaneously invest in renewable energy sources. Consequently, capitalism’s biggest polluters completely failed to agree on any meaningful action at the most recent climate conference in Durban, South Africa, instead putting off a new “framework” on emissions reduction to 2015 that would take effect in 2020. They are asking us to wait another eight years just to begin taking serious action!

Fight for Green Jobs

Nevertheless, support for green policies has grown significantly among ordinary people. Last year, thousands of activists organized unprecedented protests against the Obama administration and the Keystone XL pipeline, compelling Obama to reject the project and postpone the final decision on the northern route of the pipeline until after the election.

These actions showed the way forward. Only a mass movement, independent of both political parties, will be capable of beating back the destructive policies of corporate America.

However, even this small victory was short-lived, as the Obama administration later welcomed news that the southern portion of the Keystone XL pipeline was beginning construction, with Obama quickly issuing an executive order to expedite the review and permit process. Unless activists put up another big fight, the pipeline will likely be approved after the election.

Rebuilding the economy around green technology could not only start addressing damage of global warming, but also create millions of jobs. The environmental and labor movements should unite and fight for a massive tax increase on corporations and the rich to fund a public works program, providing millions of union wage jobs to transition our economy from non-renewable, polluting energy sources to clean, renewable, and sustainable sources. Instead of cuts to public transit systems, we should fight for a massive expansion in quality, clean, and rapid mass transit, and make it free as an incentive to reduce car usage.

To completely stop global climate change, we must challenge the oil-addicted capitalist system, which is based on maximizing short-term profits over the interests of the environment and working people.

Big Oil and Wall Street corporations use their power for their own destructive interests. They profiteer off high gas prices and stand in the way of a needed transition to an environmentally sustainable economy. They should be brought into public ownership and run democratically in the interests of the public.

This would be a step toward a democratically planned, socialist economy, where we could democratically decide whether to waste billions of dollars on speculation and fossil fuel production or radically transform our society to meet the needs of the 99% and the environment.