34 posts categorized "Energy Providers" Feed

Just Energy Agrees To Pay $4 Million To Settle Deceptive Marketing Allegations

Just Energy logo The Attorney General's Office for the Commonwealth of Massachusetts announced earlier this week that it had reached a settlement with Just energy, an electricity supplier, to resolve several deceptive marketing allegations. The lawsuit, filed in Suffolk Superior Court, alleged that:

"... Just Energy, through a third-party telemarketing vendor and door-to-door agents, engaged in deceptive marketing and sales that misled consumers into signing contracts based on attractive introductory pricing, only to later increase their electricity supply costs."

This blog first reported about Just Energy in 2010. After that blog post, consumers in the United States and Canada summited comments, followed by sales and sales management representatives of the electricity supplier. I did not see any mention of the settlement agreement in the Just Energy website. Based in Mississauga, Ontario (Canada0, the company lists a local office for Massachusetts residents in Buffalo, New York. Affiliated companies include Amigo Energy, Commerce Energy, Hudson Energy, and Tara Energy.

The Attorney General's announcement also stated:

"... ust Energy sales representatives allegedly failed to disclose complete and accurate pricing information to its customers by promising savings or representing that they could help consumers keep their electricity bills low. Instead, consumers were charged rates that were higher than the rates for the electricity supply provided by NSTAR and National Grid. Just Energy also allegedly induced elderly and non-native English speaking consumers by continuing to offer electricity supply services even after it became clear that they did not understand the terms of the proposed contract."

"Slamming" is when a consumer's service is switched without their consent. The allegations included slamming:

Consumers were allegedly switched from their distribution company to Just Energy without their authorization... The AG’s Office alleges that Just Energy made false representations concerning its electricity products, including that its products would provide “green” or “renewable” energy at prices comparable to basic service, and that its products were offered as part of a state-run program..."

Terms of the settlement agreement require Just Energy to pay $3.8 million into an independent trust to provide restitution to affected residents, and to pay $200,000 to the Commonwealth. To avoid slamming and deceptive marketing, the Attorney general's Office advises consumers to do these four things:

  1. Check your utility bills: to make sure that your service has not be switched to a different provider
  2. Protect your sensitive information: do not show your utility bills to door-to-door sales people. Only show your utility bills after you have decided to do business with a provider.
  3. Be cautious: your current service provider does not send door-to-door sales people.
  4. Know your rights: do not let door-to-door sales people into your home unless you know them personally. Contact local police if the sales agent refuses to leave or you believe you are threatened.

I congratulate the Attorney General's Office for protecting consumers and enforcing the laws.

Newspaper Uncovers Secret Alliance Between Energy Companies And Several States' Attorney Generals

To write this blog, I often monitor announcements by several states' attorney generals. I was saddened to read an investigative report describing a secretive alliance betwen several energy companies and state's attorney generals. The New York Times reported:

"The email exchange from October 2011, obtained through an open-records request, offers a hint of the unprecedented, secretive alliance that Mr. Pruitt and other Republican attorneys general have formed with some of the nation’s top energy producers to push back against the Obama regulatory agenda, an investigation by The New York Times has found."

What the newspaper's investigation uncovered:

"The letter to the Environmental Protection Agency from Attorney General Scott Pruitt of Oklahoma carried a blunt accusation: Federal regulators were grossly overestimating the amount of air pollution caused by energy companies drilling new natural gas wells in his state. But Mr. Pruitt left out one critical point. The three-page letter was written by lawyers for Devon Energy, one of Oklahoma’s biggest oil and gas companies, and was delivered to him by Devon’s chief of lobbying."

The newspaper also uncovered:

"Industries that [Mr. Pruitt] regulates have also joined him as plaintiffs in court challenges, a departure from the usual role of the state attorney general, who traditionally sues companies to force compliance with state law."

According to the newspaper's report, the Southern Company of Gergia, an electric utility, also sent similar letters to states' attorney generals. The goal seems to be to roll back regulations that currently ensure clean air, water, and land -- a spun in terms of advancing states' right and limiting federal government rights. This may be happening in 15 other states; most with Republican attorney generals.One set of documents describe a former state attorney general who became a lobbyist.

It is also troubling because the state attorney general represents the state and its residents, not advocate for a specific company:

“When you use a public office, pretty shamelessly, to vouch for a private party with substantial financial interest without the disclosure of the true authorship, that is a dangerous practice,” said David B. Frohnmayer, a Republican who served a decade as attorney general in Oregon. “The puppeteer behind the stage is pulling strings, and you can’t see. I don’t like that. And when it is exposed, it makes you feel used.”

I am not an attorney nor a resident of Oklahoma. Perhaps, some concerned citizens in the applicable states will challenge their attorney generals' conduct. Example: a section from the Oklahoma Rules of Professional Conduct which seems applicable:

"Chapter 1, App. 3-A
Transactions with Persons Other than Clients
Rule 4.1. Truthfulness In Statements To Others
In the course of representing a client a lawyer shall not knowingly: (a) make a false statement of material fact or law to a third person; or (b) fail to disclose a material fact to a third person when disclosure is necessary to avoid assisting a criminal or fraudulent act by a client, unless disclosure is prohibited by Rule 1.6."

Another section of the code:

"Rule 3.9. Advocate in Nonadjudicative Proceedings
A lawyer representing a client before a legislative body or administrative agency in a nonadjudicative proceeding shall disclose that the appearance is in a representative capacity and shall conform to the provisions of Rules 3.3 (a) through (c), 3.4 (a) through (c), and 3.5.

Comment: [1] In representation before bodies such as legislatures, municipal councils, and executive and administrative agencies acting in a rule-making or policy-making capacity, lawyers present facts, formulate issues and advance argument in the matters under consideration. The decision-making body, like a court, should be able to rely on the integrity of the submissions made to it. A lawyer appearing before such a body must deal with the it honestly and in conformity with applicable rules of procedure..."

What are your opinions of Mr. Pruitt's alleged actions? Of the secret alliance? Any readers in Oklahoma care to comment below? I expect these actions from elected politicians, not lawyers responsible for enforcing the state's laws. These alleged actions put a democracy in peril.

Energy Providers: A New I've Been Mugged Topic

Many consumers now have smart meters installed in their homes. Now, both public utilities and private sector companies provide consumers with energy services. Some people are concerned about the privacy implications with the new technologies. So, I have added a new topic in the tag cloud in the near right column. The "Energy Providers" topic includes content where we will explore these and other issues.

I hope that you like the new category.

Fraudsters Target Residents In Several States With Utility Scam

Earlier this month, Rhode Island residents were warned about a utility scam where fraudsters try to trick them into disclosing sensitive bank account information. The fraudsters pretend to be representatives from your local utility provider; in Rhode Island, National Grid.

During the phone call, the fraudsters claim that customer's account is past due, and that their electric or gas utilities will be shut off unless they pay immediately, by providing their bank account and payment information over the phone. Besides Rhode Island, the fraudsters have targeted consumers in Pennsylvania, Maryland, Ohio, Florida, and Alabama. In Florida, the fraudsters demanded payment via the Green Dot prepaid card.

National Grid does not contact Rhode Island customers by phone about past due account notices. If you receive a phone call with this scam, or were affected:

  • Do not give out bank account and payment information over the phone,
  • Do not wire money to people you do not know,
  • Do not give prepaid cards to people you do not know,
  • Report the scam to the Federal Trade Commission (FTC), and
  • Contact directly your utility provider directly about your account status.

Halliburton To Plead Guilty For Destroying Evidence About BP Gulf Oil Spill

Halliburton Energy Services Inc. logo

Remember that massive BP oil spill in the Gulf of Mexico in 2010? It was the largest oil spill in U.S. history. The U.S. Justice Department announced last week that Halliburton Energy Services Inc. has agreed to plead guilty to destroying evidence related to the massive 2010 British Petroleum (BP) oil spill in the Gulf of Mexico. Halliburton was a contractor to BP.

The announcement said in part:

"Halliburton has signed a cooperation and guilty plea agreement with the government in which Halliburton has agreed to plead guilty and admit its criminal conduct. As part of the plea agreement, Halliburton has further agreed, subject to the court’s approval, to pay the maximum-available statutory fine, to be subject to three years of probation and to continue its cooperation in the government’s ongoing criminal investigation."

The evidence Halliburton destroyed:

"On or about May 3, 2010, Halliburton established an internal working group to examine the Macondo well blowout, including whether the number of centralizers used on the final production casing could have contributed to the blowout. A production casing is a long, heavy metal pipe set across the area of the oil and natural gas reservoir. Centralizers are protruding metal collars affixed at various intervals on the outside of the casing. Use of centralizers can help keep the casing centered in the wellbore away from the surrounding walls as it is lowered and placed in the well... in or about May 2010, Halliburton, through its Cementing Technology Director, directed a Senior Program Manager for the Cement Product Line (Program Manager) to run two computer simulations of the Macondo well final cementing job using Halliburton’s Displace 3D simulation program to compare the impact of using six versus 21 centralizers. Displace 3D was a next-generation simulation program that was being developed to model fluid interfaces and their movement through the wellbore and annulus of a well. These simulations indicated that there was little difference between using six and 21 centralizers. Program Manager was directed to, and did, destroy these results."

Similar evidence was destroyed again during June 2010. Reportedly, the fine Halliburton will pay is the statutory maximum $200,000. Halliburton also paid a voluntary contribution of $55 million to the National Fish and Wildlife Foundation.

A criminal investigation is still ongoing by the Deepwater Horizon Task Force, based in New Orleans. BP owned the lease for the drilling site. Transocean Ltd. owned the Deepwater Horizon drilling platform and provided the employees that operated the well. BP hired Halliburton to provide cement to plut the leaking oil well.

The Guardian UK reported:

"... Halliburton recommended to BP that the Macondo well contain 21 centralisers – metal collars that can improve cementing – but BP chose to use six... BP and Transocean Ltd, which owned the drilling rig, have previously entered guilty pleas over other aspects of the Gulf oil spill and agreed to pay respective criminal fines of $1.26bn and $400mn... Halliburton, BP and Transocean are also defendants in a federal civil trial that began in February to apportion blame and set damages for the oil spill."

The massive oil spill resulted in the deaths of 11 workers on the oil platform and millions of barrels of oil poured into the Gulf of Mexico waters, damaging shorelines and fish stocks for months. Determining the exact amount of crude oil spilled has been difficult. One estimate is 3.26 million barrels. Other estimates range from 4.4 to 5.5 million barrels spilled. Determining the number is important since the Oil Pollution Act of 1990 includes fines of up to $1,100 per barrel for negligence; or up to $4,300 per barrel for gross negligence.

Some facts from the official report about the BP oil spill and cleanup (Adobe PDF):

  • The spill lasted for 87 days
  • 88,522 square miles of fisheries wer closed
  • 181 miles of shoreline were heavily to moderately soaked with crude oil
  • About 9,000 vessels and 835 skimmers were involved in the cleanup efforts
  • 411 situ sites burned off about 250,000 barrels of oil
  • 68,530 gallons (1,632 barrels) of dispersant were used during the cleanup
  • About 47,000 people worked on the cleanup: on ships drilling relief wells, applying dispersant, applying containment booms, in support aircraft, and performing onshore cleanup

Former Vice President Dick Cheney worked as CEO of Halliburton from 1995 to 2000. In 2012, Halliburton's fiscal year-end revenues were $28.5 billion. For the same period, its net income was $2.6 billion.

Both the fine and the voluntary payment seem miniscule compared to the corporation's revenues. Nor do the fine and voluntary payment seem to be much of a deterrent either to future wrong doing. Hopefully, several senior-level executives will go to prison as a result of the criminal investigation. This type of wrongdoing will stop only when executives know that a fine is insufficient and they will go to prison for a long time.

A Rapid Increase In The USA In Utility Smart Meter Installations

U.S. Department of Energy logo We've all heard phrases such as "the smart grid" and "smart meters." What are they about? What's going on?

It's wise for consumers to familiarize yourself with the above phrases and new terminology. Change is coming to many homes and businesses. According to the U.S. Department of Energy, which defines the "smart grid" is:

"... a developing network of new technologies, equipment, and controls working together together to respond immediately to our 21st century demand for electricity."

That sounds beneficial and harmless enough. The new technologies and equipment include utility smart meters, or "advanced metering infrastructure" (AMI), as the industry calls them. The industry is replacing the old technology (e.g., analog utility meters) in both homes and businesses with new technology: smart meters.

Smart meter by Baltimore Gas and Electric. What makes these new meters smart? These devices do several things:

  1. Communicate two-ways via radio frequencies (e.g., wireless connections) between the customer and the service provider
  2. Have sufficient memory to store a customer's usage, as much as a year
  3. Store and transmit customers' energy consumption in digital format
  4. Transmit energy consumption to the service provider at regular intervals, as often as every 15 minutes

The service provider is the utility or private company that provides you with power; the company that sends you your monthly energy bill. The customer's energy consumption can include electricity, gas, or both. The "two way" connection is important because the device transmits usage, and staff at the service provider can query meters to retrieve data.

By August 2012, about 36 million smart meters had been installed in the USA. States with the highest number of smart meter installations -- the industry calls it "penetration" -- have penetration rates greater than 50% across all customer types: residential and businesses. In 2011, the states with penetration rates equal or greater than 50% included Alabama, Arizona, Delaware, Georgia, Idaho, Maine, and Texas. Another half-dozen states had penetration rates of 30% or more.

Penetration rates across all business sector since 2007:

Smart meter deployment in the USA from 2007 to 2011 by the U.S. Department of Energy

So, in 2011 about 23% of residential energy customers used smart meters. That's up from about 2% in 2007. That seems to be pretty fast growth. Experts expect this growth to continue.

There are several reasons for the growth. The frequently mentioned benefits for service providers are lower operating and maintenance costs. The service providers no longer have to send technicians monthly to your home or office to record the usage on your meter. Now, workers remotely at the service provider can collect customers' energy consumption real-time.

The benefits for consumers: you can better understand your energy usage, and (in theory) make changes accordingly to lower your consumption and costs. For example, a promotional video by Baltimore Gas and Electric (BGE) presents four benefits for consumers:

"1. Energy management tools
2. New rebate programs
3. Fewer estimated bills
4. Enhanced service restoration after an outage"

Previously, a service provider sometimes estimated your monthly bill based on past usage, when it didn't send a technician to read the usage on your meter. Given all of these benefits, everything sounds peachy with no problems. Well, not necessarily. An upcoming blog post will explore some of the issues associated with smart meters.

Boston Police Department Safety Alert About Door-To-Door Sales People

The following alert appeared on November 20, 2012 in the Boston Police Department (BPD) community blog:

"The Boston Police is receiving reports about a door-to-door sales person claiming to work for and represent a company called: Just Energy. At present, the group is allegedly soliciting business in the area of Newcastle Road in Brighton. The Boston Police Department is investigating the authenticity of the group..."

Readers of this blog are familiar with Just Energy. It is a valid company and you can browse its website or Better Business Bureau rating. In the above BPD alert, it seems that a criminal may be posing as a Just Energy representative. The BPD advises consumers to follow these safety tips should you encounter any door-to-door salesperson:

"1. Never open your door automatically to anyone without inquiring as to who it is and what they want.

2. If possible, use a ‘peep hole’ or window to see or identify any person knocking on your door or ringing your door bell.

3. When dealing with a person who shows up at your door unannounced or without prior notification (be it a cable provider, maintenance worker, plumber, salesperson) exercise healthy levels of caution and care before agreeing to anything. If a person shows up at your door without proper notification, promptly ask to see an ID, business card or supervisor’s phone number before conducting any further business. If an individual is unable to provide any of the aforementioned forms of identification, discontinue the interaction."

Slamming And Your Home Energy Bills

Recently, an I've Been Mugged reader wrote asking me about what to do with their home energy bill. The reader was concerned that they had been "slammed" -- their energy supplier had been switched without their approval. When thinking about situations like this, it is important for consumers to understand your rights first.

Each state in the USA has a Public Utility Commission (PUC) or state agency to govern and regulate which companies are licensed to sell energy (e.g., electricity, natural gas). So, to understand your rights a good first step is the PUC website for the state where you live.

I'll use the state where I live as an example. In Massachusetts, some private companies are licensed to sell only electricity, some only gas, and some both. The Executive Office of Energy and Environmental Affairs (EEA) provides the lists of licensed energy sellers in Massachusetts. Obviously, this is a list consumers would use to verify any private company selling energy in the state, especially door-to-door sales people.

The same EEA website describes consumers' various rights about energy services. For example, the "Cooling Off Period" describes the length of time consumers can change their mind after switching to a new energy service provider:

"Your choice of a competitive power supplier will not take effect for at least three business days. Should you change your mind during that three day period, you will not incur any charges."

The site also describes consumers' rights about slamming:

"A competitive power supplier may not switch you to its service without your consent. Your consent must take the form of either: 1) a written letter of authorization signed by you; or 2) your oral statement to an independent third party, such as a separate verification company. If you are switched without your authorization, you may file a complaint with the Massachusetts Department of Telecommunications and Energy by calling 1-800-392-6066."

Historically, slamming happened a lot with phone services, but lately it can happen with energy services, too. In 2011, the Georgia Public Service Commission (PSC) fined gas marketer Energy America with a $400,000 penalty for customers it "slammed." While some companies approach consumers at home, others perform phone solicitations.

Before accusing a company of slamming your energy service, I would first check with other members in the home, or a landlord, to see if somebody else signed an order to switch service. Then, I would contact the new energy supplier to get the sales person's name and a copy of that new-service order.

If slamming is still a concern, other steps I might perform in order:

  1. Check the website of my existing energy supplier to see what they advise about slamming
  2. Check my state's PUC website to understand my rights and what they advise about slamming
  3. File a complaint with the PUC in the state where I live
  4. File a police report with local law enforcement, since it is fraud to forge another person's signature
  5. File a complaint with the Federal Trade Commission
  6. Consult with an attorney to see what other options there may be for consumers

Having difficulty finding the website for your state's PUC? This list may help.

We Have A Choice

Somewhere Over the Rainbow, as sang by the cast of "Glee" and set to new images:

Some pols and pundits blame "extreme environmentalists" for the BP oil gusher in the Gulf. That is a load of bull. This is one strong reason why I believe both BP and MMS senior executives should go to jail. Do not pass go. Straight to jail for a lengthy stay.

Some pols and pundits want you to believe that the only choice for energy independence is to drill for oil in deep water or shallow water. Not so. We have a choice. I choose moving faster towards clean, renewal energy. What about you?

The United States And Energy Independence

Several pro-oil pols and pundits have criticized President Obama for demonizing BP, the $20 bill escrow account to help oil disaster victims, and using the BP oil disaster to push his energy agenda. Obama's energy agenda? Geez, how quickly some Americans forget:

The Daily Show With Jon Stewart Mon - Thurs 11p / 10c
An Energy-Independent Future
Daily Show Full Episodes Political Humor Tea Party

Why has the USA failed to secure energy independence? Simply, we are a nation of oil addicts lacking the will to change our ways. Plenty of pols and pundits (invested in the old ways) are quick to tell oil addicts what they want to hear: we can drill our way out of the energy problem.

On Facebook, one person wrote to me saying she doesn't want to change her [oil-based] lifestyle, and that the BP oil spill was an accident comparable to an airplane crash. WTF? In her opinion, accidents happen. By her logic, the pollution of the Gulf and lost livelihoods by Gulf residents is just the consequence of drill-we-must.

I reject that. The era of cheap, easy oil has passed. Gone. Time to face facts. Pollution of the environment does matter. The BP oil disaster in the Gulf proves that. Time to find a better way than drill-we-must. Energy independence and clean, renewal energy sources both matter.

My experience with addicts: they either change and get sober, or go insane. What's your choice?

Update on Just Energy Sales Tactics

Perhaps you read this prior blog post about my encounter with a Just Energy sales representative. I strongly urge all consumers to watch this CBS 2 news report which aired in Chicago in February 2010. Advice to consumers:

  • Know what a therm is. It is not the same as a gallon of gasoline.
  • A "price protection" plan does not guarantee savings. Ask any sales representative for proof of savings
  • Don't show the door-to-door sales repreesentative your electric/gas bill. Some consumers have been "slammed" -- their account number used without their permission and signed to a contract without their knowledge.
  • Check with the Better Business Bureau or your state's consumer protection agency before doing business with any door-to-door sales representative or company.
  • If you can't read English, don't sign a contract. Get somebody who can read English to read the contract for you.

Thanks to KeyFrame5 for the link to the video!

Just Energy: A Good Deal?

Yesterday evening, a young man rang my doorbell claiming to offer a better, environmentally-friendly energy deal than my current electric company. He said that he represented Just Energy, and promptly asked me for a copy of my electric bill so I could sign up for this better deal.

This young man had the bad luck of ringing my doorbell. First, this blog is all about informing and empowering consumers. So, I am always alert for identity theft, fraud, scams, and deceptive offers. Alarms go off whenever a sales representative immediately asks for personally identifying information before I have a chance to review their offer in detail.

Second, I am a member of the neighborhood watch group on my street. Third, I am the co-webmaster of my neighborhood civic association. So, it's really easy for me to get the word out to neighbors.

I thanked him for sharing his energy offer and told him that, besides not knowing him, I don't disclose the personal information he asked for. He showed me a badge which he said validated that he was from Just Energy. I told him that his badge didn't do a thing for me, and asked him to leave a business card or brochure with a phone number I could call to verify him and his company.

He left a brochure which pitches wind energy, and that Just Energy's "JustGreen Rate Flex program provides consumers with electricity from a clean, renewal energy source. The brochure doesn't mention directly but seems to capitalize on the Cape Wind project, which when built will be the nation's first offshore wind farm. The wind farm, approved in April by the U.S. Secretary of the Interior after 9 years of environmental studies and political wrangling, will be built in Massachusetts off the coast of Cape Cod.

After the young man left my front porch, I called 9-1-1 to have the local police verify his credentials. Then, I went back to work. Later during the evening, I had some time and decided to research Just Energy. A quick Google search produced a link to the Chicago Better Business Bureau, which rated Just Energy an "F" (on a scale of A+ to F). Why? 536 complaints, 42 unresolved complaints, and 28 complaints unanswered by the company.

An article in the Consumerist blog described some consumers' experiences with the company in the borough of Brooklyn in New York City. Similar problems there. I called the phone number (866-587-8674) on the company's brochure and a recording said its offices were closed and to call back during business hours.

Is Just Energy's deal a good one? You'll have to decide that for yourself. Me? I'll pass on the company's offer.

Has anybody else encountered this company? Did you sign up for one of their energy plans? If so, what was your experience?

[Editor's Note: in January 2015, Just Energy agreed to a settlement agreement with the Attorney General's Office for the Commonwealth of Massachusetts.]

Former Employee Identified as Alledged Hacker of Power Company

I have often written about data breaches where the sensitive personal data of customers, employees, or subcontractors has been lost of stolen. This breach event is important because it highlights the criminal aspect of a data breach, when a different type of damage was done.

Last week, the Threat Level blog reported that the FBI is investigating a computer breach at:

"... a large Texas power company that crippled the firm’s energy forecast system for a day in March, costing it over $26,000... FBI agents raided the home of a former employee of Dallas-based Energy Future Holdings... The ex-employee, Dong Chul Shin, was fired from the company March 3 for performance reasons, and escorted off the premises, according to court records. But the company failed to immediately shut off his VPN access. That afternoon, someone using Shin’s account began logging onto the corporate network, e-mailing out proprietary data to a personal Yahoo account linked to Shin, and modifying and deleting files..."

It appeared that the hack was intended to cause financial damage to the power company and not cause a power outage or threaten plant safety:

"One of the files that was tampered with, “Hourly Capacity Supplied — 2009 upload.xls... resulting in EFH being unable to accurately forecast the parameters necessary to operate the business... That kind of sabotage would harm the company’s efforts to sell its electricity in the Texas power market..."

This breach also highlights several implications. First, threats come from within an organization, and not just from outside.

Second, Shin's VPN access should have been deactivated when he was fired. This suggests that either the power company's data security policy was insufficient, or the data policy was sufficient and an employee didn't do their job. Either way, the power company needs to do more about data security. Either update its policies, train employees, or both.

Third, events like this indicate to consumers that companies don't take data security as seriously as they should.

Oil, Oil, Oil - What Should the Price Be?

[Editor's Note: Today's blog post is by guest author William Seebeck. I've known Bill for decades, going back to our time working together at Lexis-Nexis in Dayton, Ohio during the 1980's. Bill has a wealth of experience in online systems, banking, publishing, and public relations.]

By Bill Seebeck

Before we begin, remember that before there was the cost of oil, there was coal; before coal it was wood, and somewhere in between there was natural gas, not to mention electricity. And who knows in the future, we may be complaining about windmill rates.

The reality is that there is some purpose to almost every form of energy, although the man made one – nuclear seems to always be a problem because it can also be used to breed a weapon and we don’t know how to protect ourselves and our environment from its most toxic waste.

Back to oil. Well, we, the public, have been dealing with the price of oil in one way or another for the last eight years and it hasn’t been pleasant. If we didn’t know it before, we now know that it can wreck a home budget overnight, can do the same to the travel and hotel industry, not to mention the cost of food, and every other product, good or service we consume. Yes, not having a fix on oil will keep us rocking as we begin the hard work of putting the economy back in balance.

So, what should be the real price of oil?

Well, news agencies are reporting that OPEC wants a price of $75 a barrel. That would mean that the price at the pump would be closer to $3 a gallon. For those nations that are listening, I can tell you that $3 is too much and won’t work here in America. Sounds like I’m negotiating a price? Well, I am and I think we can negotiate a price or a price range that is acceptable to our economy and to OPEC.

Last year, the chairman of the National Bank of Kuwait suggested that the price range might be in the $35-$50 range. At the pump, that would mean a price not higher than around $2.25 per gallon. Even that is high but closer to reasonable given our current situation. What would work is around where the price has been over the last 60 days, somewhere between $30 and $45 per barrel. That would keep the pump cost below $2.00. The price needs to be kept below two dollars per gallon.

Now at that price, do the OPEC countries make money? Yes, they do. In a variety of interviews at the close of 2008, it was reported that the cost of oil at the wellhead in the Gulf was still around $2.00, which it has been for some time. When you add costs, expense is around $18.00-$20.00 a barrel, OPEC will still be making a profit margin of 50-100%. That is more than fair.

From my time in Saudi Arabia working with a company that had a major American oil concession, I learned that the companies make a profit, but collectively, it might not be enough to meet their own government’s budget needs. That to me is a whole other situation. I think that it is important that our government actively work to seek some level of stability in oil prices so that we all can better plan our lives in an effort to make a more predictable recovery.

What's your opinion? Are you tired of being "mugged" at the gas pump? I hope that you will contact your elected officials and tell them that stable oil prices need to be a priority.

© 2009 WBSeebeck