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True Lies: The Real Life Story of the Evil Oil Price Fixing Conspiracy!


Ok, I admit. Clooney, CNN, O’Reilly and the rest of you got it dead on right. You caught us. Yep, I’m talking about the massive conspiracy us oilmen engage in to manipulate oil prices. Ongoing. Deliberate. I know, because I was there at the beginning.

The Scene of the Oil Price Fixing Crime

I will never forget that first meeting. A Wednesday in late September. The year, 1982. A smoke filled, wood-paneled room. Whiskey and brandy gulped down by the fat cat CEOs of America’s oil companies and their senior aides. I was one of the aides.

In fact, it was quite a logistical ordeal cherry paneling the entirety of the Astrodome, and we aides nearly passed out trying to get that damn ol’ barn smoke filled. Sucking on 20-30 cigars at a time, because we were told “It better damn well be smoke filled”. The CEOs had to be comfortable because the business of screwing the consumer is a serious one, and all of us in the ‘bidness’ know that we perform best in dark, wood-paneled smoke filled rooms. The Astrodome? Well, it was the logical venue after all. First, it was in Houston, the center of the universe for oilmen and, second, we needed a venue to fit all 18,000 CEOs plus their aides and attendants. The Men’s Club had not yet opened, you see.

All of us there were sworn to secrecy. The sign outside the ‘dome told the passers-by on the 610 loop that a “Monster Truck Show” was taking place that Wednesday afternoon. Perfect cover for the thousands of limousines and hundreds of copters lining the expansive parking lot, regurgitating their payload of spats-wearing oilmen. Our game? Driving the Monster Truck that is the U.S. oil and gas industry over the unsuspecting Pintos that are the American Consumer.

You see, we had no choice. We had to beat the damn Opec-kers in their own game because THEY wanted to keep prices high too, and here WE were trying to infringe on their turf. It couldn’t have been any more serious if it had been Crips and Bloods; west coast, east coast, albeit with more pasty complexions and lacking the prison yard ink and definition.

It was there amongst the 40,000 or so close friends that we set in motion perhaps the most diabolical plan to manipulate markets ever envisioned in the history of this cash trough we oily-garchs sneeringly call “capitalism”. “More money from unsuspecting chumps” is more like it.

The plan, when presented, was so amazingly flawless, the simple genius of it so compelling, that we quickly voted unanimously to adopt it, along with a blood oath of secrecy from everyone present to NEVER reveal to the outside world what was formulated on that fateful day.

Nobody Expects Exxon!

It was Lawrence Rawls, then CEO of Exxon, who first outlined the plan. But many fellow conspirators point the finger at Chester Dupree, then a young Rawls protégé, for being the REAL brains and architect of our “Final Consumer Solution”. I will never forget the words or that moment.

“Gentlemen, we are now enjoying oil prices in the high $30 range, and the analysts say nothing on the horizon is keeping us from $100 per barrel! (Author’s note: $35 in 1982 is maybe $100 in 2013 dollars). I look around and note with great satisfaction that we are all fat and happy and we all are in agreement that we should do WHATEVER IT TAKES to make sure we stay here!” he roared to thundering applause.

First, my company, Exxon, will intentionally crash an oil tanker in Alaska resulting in a horrible dystopic public relations nightmare for our industry. Although I deeply regret that the environmental impact will, in fact, be quite minimal, we have spoken discretely to select journalists and environmental activists to get their assurances that the public perception of this ‘disaster’ will be that it is far greater than reality, so that many new and expensive regulations will be passed. This, of course, is just a pirouette to keep the average American sucker consumer off balance”, he chuckled dangerously.

Then, we follow up this little deception by cutting the price of oil in half starting in late 1983. This will throw the ‘consumer advocate’ swine totally off the scent. While they sit in their ergonomically correct chairs enjoying the booming economy and $4 lattes we provide via our ‘low oil price’ deception, little will they suspect what is really coming”, Rawls continued to our rapt attention.

Next, we quit hiring young people in our industry for more than a decade, creating a bigger and bigger professional experience gap, while affording us the double benefit of decimating the Petroleum Land Management, Petroleum Engineering and Petroleum Geology departments across US universities.” The man was emerging before our very eyes that late September day 31 years ago as the father, really, of U.S. energy hegemony.

Third, in four years, we cut the price in half again! To $10 dollars a barrel! If we can just keep the price rolling around in the teens for the next decade, we win on all sides! Not only do we lose 80% of our workforce, the oil spill issue from our Alaska sleight of hand will drive the U.S. government and its environmental lackeys to restrict drilling in all the best domestic places we have not yet touched! By ceding our energy security to dictatorial and politically unstable countries, we will set the stage for the most amazing PRICE MANIPULATION of all time! With no one suspecting! Most of us in the room will go bankrupt during this initial phase. I suggest we do a high card to see who stays in business. Aces survive, all the rest go under. 4 of 52. Remember, it will only be for 20 years or so.

Then we manipulate our politician puppets to strongly encourage Venezuela and Saudi Arabia to buy as much U.S. refining capacity as possible, all the while making sure through the combination of environmental regulations and grandfathering that no one can build more on our shores! And the crowning touch? Wait folks, this is REALLY brilliant … we will secretly lobby every municipality to create its own blend of gasoline so we can bring about the most inefficient mechanism for distributing our end product! With this plan in place, we should be looking at clear sailing to $100 per barrel and beyond in 2007 or so, all while keeping the unsuspecting consumer public in the dark about our nefarious deed!

We sat there in stunned silence, allowing the brilliance of this message to seep in like oil on a pristine duck pond. Then you could hear it. One fella in a light blue leisure suit and an unlikely shade of electric blue ostrich boots jumped up clapping and whistling, yelling “Yeeee haww!” Next thing you knew, the crowd went wild. Stomping and hooting and hollering and yelling “Thank you Jesus!” Everyone was grabbing and hugging each other like an old time tent revival meeting, or a typical Offshore Technology Conference party circa early 1980’s.

Mea Culpa

So, gentle readers, that is the God’s honest truth about the diabolical conspiracy by the oil companies to control oil prices. No one, as far as I know, has ever breathed a word of it, though there was a rumor that Delbert Jones, one of the original “Group of 40K” as we called ourselves, told his nephew Mike McCullers about the meeting several years later. His nephew referred to it obliquely in a movie he co-wrote called Austin Powers where Dr. Evil, the bad guy, holds the world ransom for $1 million dollars after being frozen for 40 years. I am not sure why that is funny.

And ol’ Chester Dupree? In order to obfuscate the massive conspiracy, Exxon promoted Lee Raymond to be Rawls’ “successor”, while Chester was moved to being a waiter in the Petroleum Club, a sure sign of the amazing lengths everyone went to maintain deep cover for this world-changing conspiracy. I have it from inside sources that there exists a twice life size commemorative statue of Chester, along with a pair of stolen Aggie senior boots, in a special hardened titanium vault deep in the bowels of the soon to be vacated ExxonMobil building in downtown Houston. Ironically, the one that has the Houston Petroleum Club on top.

We all did our part, the “Group of 40k”. Most went broke, many lost their families and some committed suicide on instruction, just to maintain the conspiracy of a better tomorrow for us greedy oilmen.
I feel compelled to break my vow and tell the world this story because I cannot live with the guilt any longer. Let the chips fall where they may.

Your Turn

Now is the time I usually ask my readers to chime in with their thoughts in the comments below. But, of course, if any of you admitted you were there too, I’d have no choice but to kill you.

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Allen Gilmer

Allen Gilmer is the Co-founder, Chairman and CEO of Drillinginfo. Allen is active in all aspects of Drillinginfo’s new product development and is widely recognized for his industry leadership and vision. He holds several patents in the field of multi-component seismology. He received his Bachelor of Arts in Geology from Rice University and his Master of Science in Geology from The University of Texas at El Paso. Follow him on Twitter @allengilmer.