Tuesday, May 17, 2005

BIG OIL GETS RICHER, AND THE REST OF US...

... get screwed.

Thanks to friend Joe for the following article:

Op-Ed Page
Maysville Ledger
05-11-05

The man didn't look very happy. Neither did his wife. She was inside the SUV, craning her neck and watching the dial on the gasoline pump. It was spinning like a slot machine at Harrah's. At another pump, a teenager hopped out of an old clunker and squirted some gasoline into the tank. It wasn't a very big squirt. Enough to get home or maybe to work.

Gasoline prices have eased a little -- but get ready to duck. The so-called "peak driving season," generally beginning Memorial Day week, is almost there. We will hear many reasons for the sudden spike in prices at the pump.

— Supplies are tight.
— Demand is at an all-time high.
— China and India are using so much fuel there isn't enough to go around in the U.S.
— Production costs have increased.
— It's Bill Clinton's fault.

George Bush apparently is looking for a magic wand and can't find one. That's what he said the other day. "I don't have a magic wand." He excoriated Congress for not having an energy policy. That's why, before a national TV audience, he advanced his own energy plan.

Allow me to say this with some degree of accuracy: The president has been in office for four years and a little more than three months. And I don't believe it's partisan politics to ask if it took him that long to realize we didn't have an energy policy. It would be partisan politics to ask if Dick Cheney just told him last Tuesday, but I would never do that.

So, in the end, let us point the finger of suspicion -- or downright blame -- where it belongs: Big Oil.

Consider these things:

The best stock performers over the past 12 months were oil and gas operations. The 52-week total return was 50.5 percent.

The most profitable stock sectors over the past 12 months were oil and gas operations. The return on equity was 20.1 percent.

The oil and gas sector, with 99 of the world's largest 2,000 companies, had the most sales. The number cannot be calculated: $2,309,000,000,000.

Of the world's most profitable companies, Big Oil places three in the top ten.

ExxonMobil and Royal Dutch/Shell ranked one-two. ChevronTexaco was number seven.

Four oil companies ranked in the top 10 in sales. BP, Shell, Exxon and Chevron were second, third, fourth, and 10th, respectively.

If all of this doesn't add up to a smoking gun I've never seen one.

There is more.

Yes, production costs have increased. But so have petroleum industry profits.
Dramatically. U.S. oil company profits are up $50 to $80 billion from the 1995-1999 time period. This year is on track to earn more of the same.

In the 1990s, there were 34 major oil and gas companies. Now, because of mergers and consolidations, there are 13. In the 1990s, there were 15 refineries. Now there are seven. So much for competition and price restraint.

In addition to importing vast amounts of oil, the U.S. also imports one-tenth of all the refined gasoline we use. To add insult to injury, it's been 25 years since a new refinery was built in this country.

All this said, and to be fair, we Americans are part-and-parcel of the problem. We live on Excess Road in the USA. We use more energy than any other country in the world, and it doesn't look like we'll back off any time soon. We're addicted to air conditioners and gas guzzling SUVs and monster trucks. We're addicted to things big and energy inefficient.

Other than that, $2.39 gas, $2.29 gas, $2.18 gas and $2.11 gas can be attributed to one thing and one thing only.

It's called price gouging.

5 Comments:

Blogger Lizzy said...

While everything in that article is true, I have to take Bill Maher's side on this one. He said at 2 dollars plus a gallon, gas prices are too low. Real change won't come about until it becomes completely unaffordable to fill up our SUVs.

6:29 AM  
Blogger kathy said...

Didn't Bill Maher also say that we spend more than that on our coffee? i think i saw that episode too. I never saw Gas this high in all my life. But i hear in Europe they ask for four dollors per gallon! Yikes!

3:36 PM  
Blogger J. Marquis said...

I have to agree with Lizzy on this. Even if the oil companies ARE getting rich we need a situation that will force us to move on to better technology.

Good info in that article...I forwarded it on to a couple of the right wing radio guys here. They've been going nuts about a small increase in the state gas tax but haven't mentioned word one about the oil company profits.

10:09 PM  
Blogger Shawn said...

Wow... that's exactly what I've believed for a long time, but have been too lazy to research.

The cynic in me also believes that the President has many options to bring the inflated gas prices back in line, but that wouldn't set the stage for a renewed push to open up more drilling in Alaska.

Also, I always wonder how much differently things would be handled if most of the people in power in Washington weren't -- oh, I don't know... rich. One's views on gas prices are greatly affected by one's need to actually drive to work instead of being driven.

10:47 PM  
Blogger Snave said...

Bill Maher, Lizzy and J. - absolutely! Unless something happens that really hits people in the pocketbook, and hard... I would have to agree that nothing may end up getting done.

I don't like paying the higher prices, but as far as I'm concerned they can go up another dollar or two.

6:27 AM  

Post a Comment

<< Home

RichardDawkins.net