Statement by the Communist Party USA

Prices for gasoline and diesel fuel, heating oil and natural gas have soared in the past four years, and rocketed to new highs in the last year, undermining the living standards of working people. This winter thousands of Americans have had to choose between heating and eating. The energy and related industries share much of the responsibility, yet they are enjoying record-breaking profits at the expense of working families and the environment. The Bush administration’s policies aim to further enrich its corporate cronies.

In his 2006 State of the Union speech President Bush tried to bamboozle the American public with talk of “advanced energy initiatives” and “addiction to oil.” But Bush’s budget for this year and next provides token funding for a few small initiatives while cutting funds for key alternative energy and conservation programs and basic research. Bush is silent on requiring auto companies to make fuel-efficient cars, trucks and buses, or on expanding public mass transit, while the Republican Congress continues to attack Amtrak. Most telling, Bush’s 2007 budget is filled with handouts to oil corporations, including a big increase in domestic oil drilling in public lands like the Arctic National Wildlife Refuge.

The corporate oil giants and their representatives in the White House and Congress are robbing us today, and gravely endangering our future and the future of the planet.

Immediate heating assistance

Despite the sharp rise in oil and gas prices, and the growing numbers of poor people in our country, Bush’s budget leaves the grossly underfunded Low-Income Heating and Energy Assistance Program (LIHEAP) with roughly the same dollars as 20 years ago, leaving most low-income families “out in the cold.”

For the remaining winter months, emergency steps should be taken to provide home heating assistance to every low-income person who needs the aid. The same emergency measures will be needed to ensure energy assistance for home cooling in next summer’s heat. This is literally a matter of life and death. No family should be without heat this winter or cooling in the summer!

Congress should act immediately to fully fund LIHEAP up to the $5.1 billion authorized in the 2005 Energy Policy Act. But that would only reach one in seven eligible families. We call for funding up to $35 billion for energy assistance for all 33 million eligible households. No family should be denied aid because of immigration status. No family should pay more than 5 percent of their income for household energy.

State and local governments should pass emergency legislation to prevent energy cutoffs, eliminate reconnection charges, deposits and credit requirements, and establish an aggressive no-cost home weatherization program for low-income utility customers. Congress should provide federal funds for state and local governments to cover their increased energy costs and the increased aid they have to provide to their citizens.

Government at every level — school board, city/town hall, county, state, federal — should be pressed into action on these life and death energy assistance measures.

These programs could be fully funded by a special tax on the outrageous profits of the oil and gas industry.

We support the bills that have been introduced in Congress to tax some of the excess profits. But Congress should do more:

• Tax all excess profits of energy and related companies, including financial institutions and Wall Street commodity traders.

• End utility rate subsidies to corporate customers.

• Save billions by ending the occupation of Iraq, and transfer money from the Pentagon budget. The Bush military buildup of $150 billion per year, and the $80 billion per year cost of the Iraq war, could pay for these needs.

State and local officials should be urged to join with unions, community and environmental groups and all people’s organizations to demand federal action as outlined above and to mobilize their constituents around these demands.

Real hardship, obscene profits

Soaring costs for heating homes and fueling cars causes real hardship for all working people, not only those who qualify for LIHEAP. At the same time, while residents of the Gulf Coast still struggle to put their lives back together, the oil companies are posting record profits. Exxon Mobil has just reported $36 billion in profits for 2005, the largest in U.S. history! Before Hurricanes Katrina and Rita, total oil industry profits were running at an annual rate of $62.8 billion, nearly triple their average (in current dollars) over the last five years. After Katrina, the rate of profit doubled again.

When the oil executives appeared before Congress last fall, they offered no apology for their obscene profits during a national crisis. All the Republican leadership did was beg the executives to donate to charity to help a few of the hurricane victims.

Congress, state and local officials, labor unions, and consumer and community organizations should launch independent, public investigations of oil company pricing and profits, going back over the past decade. Such investigations must include participation from the unions representing energy and utility workers who have an “inside scoop” on how these corporations gouge workers and consumers alike.

What’s the cause of this energy crisis?

The reasons for the current energy crisis lie in the long-term negligence and short-term profiteering of energy and related corporations. The crisis is aggravated by the Bush administration’s close ties to the energy industry and by the disastrous war in Iraq. Deregulation of electric and natural gas utilities over the past two decades gave these corporations the green light to sacrifice public interest for private profits.

Energy production and use is at the center of modern civilization. Our U.S. economy has long enjoyed energy sources that were plentiful and among the cheapest in the world. But even though fuel prices were, until recently, relatively low compared to other countries, our energy industries have reaped mammoth profits.

The cost of production, refining, transportation and even exploration is a small fraction of the retail price of gasoline, natural gas and fuel oil. But the energy industries, helped by their friends in Washington, have been allowed to achieve an extreme degree of monopolization, with a handful of giant corporations controlling oil and gas production, refining and distribution, stifling competition, restricting supply and pushing prices up.

The oil/natural gas industry has long exercised immense political power in both domestic and foreign policy and is among the most reactionary sectors of monopoly capital.

Over six decades, the oil monopolies, in collaboration with the auto and rubber corporations, have used their financial and political might to promote policies that have made us highly dependent on nonrenewable fuel — oil and gas. These deliberate policies — many of them anti-working-class and racist — include destruction of urban centers and small-town “Main Streets”; dispersed housing, shopping and workplaces; destruction and underfunding of public mass transit; dependence on automobiles; lack of urban central heating facilities; and globalized production and distribution of commodities.

With a global market and distribution system for oil and its products, the entire world population must compete for the same supply, largely controlled by a few monopoly corporations. The crisis visited on U.S. families is also imposed on the working class throughout the world, as the wealth of whole nations is transferred to the controlling corporations and their financial institutions.

The U.S. imports about two-thirds of its oil needs. Contrary to Bush’s flim-flim about ending our “addiction” to Middle East oil, the Middle East provides only 11 percent of our total oil use. Maintaining and expanding reliable sources of cheap oil is a key driver of U.S. foreign policy and a constant incentive to U.S. aggression.

During the past year, the price of crude oil has risen steeply. The oil companies have deliberately restricted refining capacity, leading to sharply higher prices for refined products. The industry claims that demand for oil and gas has been increasing faster than production capacity. In fact, with this year’s mild winter, demand for natural gas has been soft, producing a glut of natural gas capacity in much of the country. But with energy companies free to charge what the market will bear, natural gas prices have also soared far above pre-Katrina levels, spurring higher electricity prices.

Huge windfall profits have been reaped by the energy companies, related construction and service companies (like Halliburton) and Wall Street financial institutions. Rather than being used for exploration, improving refining and distribution infrastructure or investment in alternative energy, these profits have overwhelmingly gone to the top executives and big investors.

Electricity and natural gas were highly regulated for most of the last century, in large part as a result of popular struggle. But in recent years, there has been a strong push, supported by both major political parties, to deregulate electricity and natural gas. The rest of the energy industry — in particular oil — has always been free to profiteer with virtually no government regulation.

This situation will lead to a permanent, significant reduction in the living standards of the American people, unless a strong popular movement curbs the energy corporations.

Fundamental change needed

Only an active, broad, well-informed people’s movement can solve the energy crisis in ways that benefit people and the environment.

A program to address this crisis must have several levels:

We support public ownership of the energy industries and other decisive sectors of the economy. The highly centralized, technologically advanced oil, gas and electricity monopolies are ripe for nationalization. Their existence as private corporations is a burden on the American people and a constant threat to world peace.

And we must look beyond public ownership of a single industry.

Under the capitalist system, companies make decisions based on maximizing their own profit. Yet their actions, especially in the auto, construction and real estate industries, have a decisive impact on how much and what kind of energy we use. The most fundamental solutions to the energy and related environmental crises will not be possible until we replace capitalism. In a socialist USA, all major industries will be publicly owned, and the working class will control public planning and policies in the interest of the people and of future generations. Only then will it be possible to systematically reduce and eliminate excessive dependence on scarce and environmentally destructive resources.

As a first step toward public ownership, we call for immediate strong public regulation of the energy industries at state and national levels. Prices should be controlled to reflect actual cost-of-service, and profits should be capped. Environmental, health and safety protections and labor rights in these industries must be maintained and strengthened.

Such strong regulation should be restored in the natural gas and electricity industries and should be imposed on all sectors of the oil industry — domestic production, refining and distribution. Tight regulation should also be imposed on the coal and nuclear industries.

Regulatory bodies must consist primarily of representatives from consumer and environmental organizations and unions, particularly those representing utility and energy workers. This will make it possible for these agencies to truly represent the people’s interests.

Regulators should have full rights to examine all company records and to limit profits. Tight curbs should be placed on wholesale energy trading to create transparency and prevent profiteering.

The industry should be required to invest in non-polluting, renewable energy production, as well as facilities for storage of natural gas reserves as a buffer against shortages and price spikes.

It is possible to reduce the nation’s overall energy consumption, without sacrificing our living standards or our jobs. In fact, as demonstrated by organizations like the Apollo Alliance, programs to reduce dependence on fossil fuels can create jobs while revitalizing cities and towns. Sign the Kyoto Treaty and commit our country to reducing reliance on fossil fuels that contribute to global warming.

Implement a national energy conservation program, including measures such as overhauling the nation’s housing stock and public buildings to make them more energy efficient, with subsidies for people who can’t afford to do it themselves. Such a public works program would create meaningful jobs while reducing the demand for oil, gas and electricity.

Fund high quality public mass transit in every state to reduce dependence on oil, cut pollution and promote planned development and green space. Require the auto industry to produce fuel-efficient cars, trucks and buses.

Initiate massive public investment in developing renewable, nonpolluting, nondestructive energy sources.

In the early 1900s, popular struggle resulted in partial restraint of the oil, gas and electricity monopolies. Today, a new level of organization and struggle is needed: to win immediate life-and-death energy assistance for low-income families, and to build a secure energy future that will put people and the environment before profits.

With the 2006 elections drawing near, members of Congress must hear the message loud and clear. Put people before profits.

For more information on the Communist Party USA: www.cpusa.org.

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