No Love for Big Oil – Part 2

No Love for Big Oil-Part 2

September 2, 2010

Recently I posted an article entitled “No Love for Big Oil” (http://fredkesinger.spaces.live.com/default.aspx?sa=516170775) which elaborated on why we hate Big Oil. Most of the feedback I received was positive and otherwise supportive.  But the one response I remember the most—and found the most helpful—was from a colleague who suggested I read Antonia Juhasz’s The Tyranny of Oil.

The Tyranny of Oil is an riveting expose of how Big Oil has manipulated the market, poured money into lobbyists and elections, operated with a  lack of regulatory oversight and generally impacted not only the American public but rippled throughout the world.  The author provides a bold new look at the many facets of worldwide oil and delivers cold, hard facts about how the world‘s most powerful industry has been charged with collusion, corruption, price gouging, uncompetitive behavior and unbridled greed. 

Take for example:

1. How Big Oil squeezes the refiners and the gas station owner/operator and allows him to make up to 6 cents a gallon regardless of price.  At that margin, you have to sell 100,000 gallons of gasoline to make $6,000/month.  The only people getting rich off of $4.00 gasoline is…drum roll, please, yes you guessed it…BIG OIL!

2.  Proposition 87 in California in November 2006-Proposition 87(if approved) would have implemented a small fee per barrel of oil and directed the investment in clean, renewable energy.  On the outset, this seemed like a logical thing to do.  California is one of the nation’s leaders in renewable energy. 

Unfortunately, it didn’t work out that way.  For every dollar the supporters put in, Big Oil contributed three, four and five dollars.  No where did you see Big Oil’s name on any of the multitude of signs, TV ads, websites or interviews by Big Oil executives.  Nondescript organizations like Californians Against Higher Taxes and LECG were funded by Big Oil to increase awareness and opposition to Prop 87.    In total Big Oil spent over 87 million dollars; Chevron itself contributed $37 million.

 3.  Lobbyists in Washington D.C.-According to the Center for Responsive Politics, oil and gas companies spent $154 million in 2009 on lobbying, up 16 percent from $132 million in 2008, including ExxonMobil at $27.4 million and Chevron at $20.8 million.  Money buys influence.

Author Juhasz is not without suggestions and recommendations on what we must do to turn this situation around:

                1.  Break up Big Oil similar to the trust busting of Standard Oil in the   early 1900’s.

                2.  End billions of dollars of local, state and federal taxes, tax breaks, subsidies, royalty relief and loopholes for Big Oil.  There is no reason why mature, successful Big Oil companies (ExxonMobil, Chevron, ConocoPhillips, BP and Shell) should be reaping these unearned benefits, all at the expense of the American taxpayer.  Need I remind readers of Big Oil’s record breaking earnings?

                3.  Consumption-drive less, raise MPG requirements, use public transportation, live closer to work(assuming you still have a job), live in smaller houses, reduce the number of electronic gadgets in your household, to name a few.  Espouse an energy-efficient lifestyle.

                4.  End wars for oil.  No more assurances for the House of Saud.  No more invading foreign countries (with the most oil reserves) under the guise of terrorism.  Nuff said!

 We are running out of time.  We must act now to level the playing field so that the Man on the Street has a fair chance of paying his bills, a decent standard of living and relief from fearing gasoline prices are going to quadruple in the next quarter.  It’s time to take the initial steps in moving away from the throes of fossil fuels and begin a more balanced attack on providing clean, affordable and readily available energy.

To quote the author, “To break the lock of the largest corporations on the planet is equally challenging. We must think radically, challenge ourselves in new ways, and believe in our own capacity to stop wars, protect our climate, communities, and workers, and build a more secure, stable, sustainable and peaceful future”.