THE PROGRESSIVE CONSERVATIVE, USA
An Online Journal of Political Commentary & Analysis
Volume IX, Issue # 94, May 23, 2007
Dr. Almon Leroy Way, Jr., Editor
Government Committed to & Acting in Accord with Conservative Principles
Ensures a Nation's Strength, Progress, & Prosperity
A KIND WORD FOR BIG OIL
By Alan Caruba
THE OIL COMPANIES, MARKET ECONOMICS, & THE U.S. PUBLIC INTEREST: THE PETROLEUM COMPANIES'
CONTRIBUTIONS TO THE CONVENIENCE OF AMERICAN DRIVERS & ENERGY CONSUMERS, TO PROMOTION OF EDUCATION,
RESEARCH & HUMAN HEALTH, & TO THE ECONOMIC PROSPERITY & GENERAL INTERESTS OF THE AMERICAN NATION --
MARKET CONDITIONS AS THE DETERMINANT OF THE PRICE OF GASOLINE & OTHER PETROLEUM PRODUCTS -- THE ALMOST
CERTAIN CONSEQUENCE OF LEGISLATION CONSTRAINING THE ABILITY OF OIL COMPANIES TO SET PRICES ACCORDING TO
SUPPLY & DEMAND: RATIONING, WITH LESS GASOLINE AVAILABLE & LONG LINES AT THE GAS PUMP
FULL STORY:
Is there a politician breathing this Summer who has anything good to say about “Big Oil”? If there is one topic that is
safe to demagogue, it is the price of gasoline at the pump.
As a writer who closely follows the energy industry, I recently received ExxonMobil’s “2006 Corporate Citizenship Report”.
It arrived the same day I read about U.S. Reprepresentative Bart Stupak’s (Democrat -- Michigan) proposed “Federal Price
Gouging Prevention Act” (H.R. 1252). The contrast is educational.
ExxonMobil reported that, in 2006, it had achieved a record low number of oil spills to the environment. On the average,
this represents a 21% reduction from the previous year and 10% per year since 2000. Bear in mind, ExxonMobil extracts oil
internationally, so this does not apply just to the U.S.A. I doubt that most people know that ExxonMobil is that candid
about the problem.
Something else people probably don’t know about is the company’s interest in about a hundred cogeneration facilities in
more than thirty locations worldwide, generating some 4,300 megawatts of power. This capacity also reduces global CO2
emissions by more than 10.5 million metric tons annually. That’s equivalent to taking two million cars off the road in
America.
Little known to the public is the extraordinary generosity of the company. In 2006, it made $9 million in grants through its
Africa Health Initiative and more than $2.5 million through its Educating Women and Girls Initiative. Outside of the
pharmaceutical industry, ExxonMobil is the largest private sector donor to malaria research activities. In 2007, the
company became a founding sponsor of the National Math and Science Initiative, committing $125 million to encouraging
this area of education.
In 2006, ExxonMobil, its divisions and affiliates, along with the ExxonMobil Foundation, provided a combined $138.6
million in charitable contributions and community investment worldwide.
But Representative Bart Stupak, along with his cosponsors — 86 Democrats and 3 Republicans — want to make it a crime
to “sell crude oil, gasoline, natural gas, or petroleum distillates at a price that is unconscionably excessive or indicates the
seller is taking unfair advantage [of] unusual market conditions or the circumstances of an emergency to increase prices
unreasonably.” This, my friends, is grandstanding.
The bill would impose imprisonment and corporate penalties of up to $150 million a day. And do you think for a minute
that this will actually have any impact on the cost of gasoline?
In case you’re wondering what does impact the cost, it is called market conditions. As Marlo Lewis, a senior fellow of the
Competitive Enterprise Institute, points out:
“Constraining the ability of gas companies to set prices
according to supply and demand is a recipe for rationing.
In the end, there will be less gas available and the people
who will get it will be those most prepared to wait in line.”
Welcome to the 1970s!
Columnist George F. Will recently noted that “Gasoline consumption has increased 2.14 percent during the past year.” In
inflation-adjusted dollars, $3.07 is less than gasoline cost in 1981.
Will provided the reality of who is really making a ton of money off of every gallon of gas you purchase. “While oil
companies make about 13 cents on a gallon of gasoline, the federal government makes 18.4 cents (the federal tax)….”
When you add in the tax imposed by states, you discover that California, for example, makes 40.2 cents on that same
gallon of gas, and San Francisco collects a local sales tax of 8.5 cents. In Wisconsin, the state law requires retailers to
sell gasoline for 9.18 percent above the wholesale price.
Federal, state and local communities extract more from your wallet than Big Oil every time you top off your car’s gas
tank.
It’s not that Big Oil isn’t making billions, but they are also spending billions to insure that you can have gasoline for
your car and oil to heat your home, plus all the other products that are derived from oil. And Big Oil is faced with a world
of problems in the process. As Business Week recently noted, “Much of the global oil patch is now off-limits.”
In case you haven’t noticed, Hugo Chavez, Venezuela’s dictator, intends to take over the assets of the oil companies that
have invested billions in that nation. In Nigeria, the oil industry is under attack from various factions. Iraq, now free of
Saddam Hussein’s butchery, has yet to have met a reasonable standard of productivity. Iran has announced a rise in the
price of gasoline because it too lacks refinery capacity. Other areas of the world, such as deepwater wells, require
enormous sums of money to explore, drill, extract, and transport oil.
So, you may be a bit more inclined to cut Big Oil a bit of slack. I think about that every time I fill up my car’s tank.
LINKS TO RELATED TOPICS:
Political Environmentalism Versus Human Progress & Prosperity:
Policy Issues Relating to Energy, Environment,
& Natural Resources
Political Economy -- Philosophies, Systems, & Public Policies:
Government, the Economy, & Economic Prosperity
Alan Caruba is a veteran business and science writer, a Public Relations Counselor, and Founder of the National Anxiety Center, a
clearinghouse for information about media-driven scare campaigns. Caruba writes a weekly commentary, "Warning Signs," posted
on the Internet website of the National Anxiety Center, which is located at
www.anxietycenter.com.
Caruba’s new book, Right Answers: Separating Fact from Fantasy, has been published by Merril Press.
© Alan Caruba 2007
Published with Permission of Alan Caruba
ACaruba@AOL.Com
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THE PROGRESSIVE CONSERVATIVE, USA
An Online Journal of Political Commentary & Analysis
Dr. Almon Leroy Way, Jr., Editor
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Conservative Government Ensures a Nation's Strength, Progress, & Prosperity