Tuesday, April 01, 2008

Snake Oil Salesmen

This quintet of seemingly stately gentlemen to your right are the reason you're paying $4 per gallon at the pump every week. The five top executives of the biggest oil companies met before House Representatives in Washington, DC today to explain just how in the hell they could justify continuing their Bush-awarded tax breaks when their companies were making record-breaking profits and American drivers were paying record-high gas prices at the pumps.
J.S. Simon, senior vice president of Exxon-Mobil said that we needed to look at astronomical oil company profits in terms of the cyclical Big Picture. "We depend on high earnings during the up cycle to sustain ... investment over the long-term, including the down cycles." We didn't see the actual testimony, but we're pretty damned sure he actually managed to say this with a straight face.

Peter Robertson, VP of Chevron, let us know that its really all our fault for having unrealistic expectations. "We face a new reality, volatility, high prices, greater competition for resources", and adding that he understands that "Americans see the pain" of $100-a-barrel oil.

Well, some Americans do, Pete. But not you, apparently. Let's see what Forbes has to say about Mr. Robertson and just how hard the competition for resources has hit him. It appears that, between his nearly million dollar a year salary, plus his other perqs (presumably including stock options) from Chevron, Mr. Robertson is grossing over $14 million dollars a year in his current position. I'm pretty sure the prospect of $4 to $4.50 per gallon is not much of a concern to him.

Mr. Hofmeister of Shell Oil, much like his cornerman George W. Bush, is a lame duck, due to retire on June 1, 2008, with what I'm pretty sure will be a pretty golden parachute. Nonetheless, he "understands" that Americans are feeling the pinch. Gee, that's all I wanted, John. I just wanted to be understood.

Oh. Wait. No, I don't.

As lovely as it was to read the transcripts of this little Q&A session, it brings no solace. Back in 2005, when oil prices were hanging out at $60 a barrel (kind of makes one nostalgic, doesn't it), Congress called the Big Five (Shell, Exxon-Mobil, Chevron, BP and Conoco-Phillips in to testify as to why they were making record-breaking profits three years ago. They got pretty the same answers. It would seem that in three years, the competition has increased by no less than 30%. (I'm almost feeling sorry for these guys.)

I guess back in 2005, the oil companies were bracing for that inevitable downturn in the market -- that rainy day they're expecting any time now. It got me to thinking. Just when was the last revenue loss for oil companies anyway? Back in 1999, oil prices took a sudden, brief dip below $10 a barrel, but seemed to have bounced back fairly quickly, since, by 2000, the then-Republican candidate for President, George W. Bush, gave a speech critical of his Democratic predecessor, Bill Clinton, for allowing oil prices to climb to $30. In that speech, Bush was also critical of record-breaking profit margins being enjoyed by oil companies at the time. By the time Bush was sworn in as President in January 2001, oil prices had risen to around $45 per barrel, where they stayed fairly stable through 2003, until the invasion of Iraq threw the oil supply into a veritable tizzy. Oil company profits were being spoken of in terms of "windfall" even then. And we can say for certain that that rumored "slowing trend" that has oil executives all hot and bothered certainly didn't commence by 2005. In June of that year, five months before the Big Five testified in the early hearing before the House, MSNBC reported that the Big Five were "awash in record levels of cash."

Part of this is our own fault. And by "us," I mean "you" (and "you" know who "you" are, too, you rat bastards), because I was protesting this dumb-ass war before it began. Thanks to our brilliantly strategized, well-thought-out plan to invade Iraq, we've been short about 2 billion barrels of oil a year for past five years. You can thank George Bush for that. Also, Hillary Clinton, John Edwards, John Kerry and John McCain, among others, as well.

But Bush has pretty much been reduced to the post of court eunuch now, and it's time we started undoing the problems he created. I think a windfall profits tax might be a mistake, but I do think we need to rescind tax breaks that have been given this past decade. We need to take these five charlatains down a few pegs. It's time to start screaming bloody murder. It's time to buy a hybrid. It's time, folks. It's time.


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