The Oil-Industrial Complex Strikes Again

In hearings on Capitol Hill today, oil executives said:

1) "We cannot change the world market. Today's high prices are linked to the failure both here and abroad to increase supplies, renewables and conservation." (Robert Malone, chairman and president of BP America Inc.)

2) "The fundamental laws of supply and demand are at work. The market is squeezed by exporting nations managing demand for their own interest and other nations subsidizing prices to encourage economic growth." (John Hofmeister, president of Shell)

This is the same old song and dance. During the past year or two, the "Oil-Industrial Complex" has reaped unprecedented profits. When the public asks why, BO representatives like those quoted above say it's the nature of the business: severe weather, wars, terrorist attacks, supply and demand. Many reasons and variables affect the bottom line.

Unlike most businesses, BO has figured out how to profit EVERY TIME from adversity, whether man-made or natural. In fact, the worse the adversity, the higher their profits.

Big Oil conglomerates like Exxon-Mobil claim they neither set prices nor control the market. That's laughable. Exxon-Mobil operates in nearly 200 countries or territories, exploring for and producing oil and gas. Exxon-Mobil's oil and gas fields, both domestic and abroad, produce more than four million oil-equivalent barrels per day in 24 countries including but not limited to the U.S., West Africa, Saudi Arabia, and Australia.

Exxon-Mobil has interest in 46 refineries in 26 countries, more than 25,000 miles of pipelines and 45,000 gas stations, under the well-known brands of Esso, Mobil and Exxon in more than 100 countries. Exxon-Mobil is simply the world's foremost manufacturer and marketer of petroleum products. From that lofty perch they cannot help but wield considerable price setting influence.

Here's a hypothetical. Pretend for a moment that with all these oil wells, refineries and pipelines around the world, Exxon-Mobil really doesn't have any significant influence. Let's look specifically at the domestic oil market.

Forty percent of the oil consumed in America comes from America. In the 1970s it was profitable for the oil companies to produce and market oil in the range of $22 per barrel. So why is it that the major oil companies were recently charging more than FOUR TIMES THAT AMOUNT per barrel for domestic oil?

America has for years been subsidizing oil wells. We pay for this up front and at the pump but the government claims this is a free enterprise and it cannot interfere.

I am as much a Capitalist as the next guy, but Big Oil is lying when they say they don't have price setting influence. Big Oil should stop hiding behind catastrophes, crises and the threat of crises, and simply say: "This is a business. America was built on business. Shareholders want more profits so we're going to give them what they want. If you don't like it, don't drive."