Posted on 06/10/2007 9:49:18 AM PDT by jazusamo
Sunday, June 10, 2007
Peter J. Robertson had no idea what he was walking into Tuesday morning.
The vice chairman of Chevron Corp's board of directors was visiting The Oregonian's editorial board, and I had just filled up at the gas station. Like many Oregonians, I was not a happy. I had just spent $3.29 for a gallon of gas. Admittedly, my TNG Milano 49 only needed a gallon for a week of commuting, but this cheapskate didn't join Scooter Nation to watch Big Oil gobble up my gas savings.
I wanted answers, and I wanted them now. More to the point, I wanted someone to blame.
Enter Chevron's Robertson.
Why, sir, are oil industry bosses taking food out the mouths of babes by manipulating the gas prices and gouging the poor American consumer?
" 'Big Oil' is not so big," Robertson said after pulling out a bar chart showing the national oil companies (sovereign nations and their oil companies) and the international oil companies -- Exxon Mobil, BP, Chevron, etc. The nationals control 95 percent of the world's oil and gas reserves. The international companies control 5 percent.
Iran controls almost 300 billion barrels, Saudi Arabia controls almost as much, and Qatar 160 billion barrels. Chevron controls less than 11.6 billion. Chevron and other oil companies are big companies, but they're small in relation to the global oil market. They're simply in no position to rig oil prices on the world market -- a significant reality because the price of oil accounts for 53 percent of the price of gasoline in the United States. Refining and marketing costs account for 33 percent and, across the country, taxes 15 percent.
Ah, but isn't the oil industry holding back supply?
Actually, he noted, U.S. refineries operate at close to capacity, refining gas at record levels. Indeed, the United States has more than 200,000 barrels a day more capacity today than it did last year.
So, you're sitting there saying the industry is not price fixing? What about all those government investigations?
Yes, there are have been more than 30 since 1973. Not one has concluded the industry manipulated prices.
Why, then, are gas prices so high?
Higher worldwide demand than anyone anticipated, thanks to economic growth in China, India and the United States. Robertson also said the industry is now operating in difficult political environments abroad (Nigeria, Venezuela) while production is more difficult here at home (less and less high-quality material available).
"It's very difficult," he said, "to find places in the United States where you can drill. 'Don't drill here, and we want the cheapest gas in the world' -- that's not possible."
Yeah, but what about Big Oil's obscene profits?
Robertson pulls out another chart. It shows industry by industry earnings for 2006. The oil and natural gas industry made 9.5 cents for each dollar in sales. The computers and electronics made 13.4 cents, the beverage and tobacco industry 17.2 cents and pharmaceuticals and medicine made 21.6 cents.
Again with the charts. Well, why not put those profits back in research and development?
Chevron has. It's posted earnings of $53 billion during the past five years. The amount Chevron has invested in the same period? $53 billion? In 2007, Robertson's quick to note, his company will invest almost $20 billion.
"We're not wheeling cash out the back door in wheelbarrows," he said.
Fine, but you're not investing in alternative fuels, are you?
Actually, Chevron is. "We're the largest geothermal company in the world," Robertson said. He also mentioned Chevron had just cut the ribbon on a new biodiesel plant in Texas that uses soybeans. Chevron has research projects in making gasoline from agricultural waste and wood pulp.
Alternative fuels are the answer, aren't they?
Robertson isn't ready to go that far. They're part of the answer. "One of the problems with the energy business is that people don't appreciate the scale (of production and delivery), so the scale of change is very large, " he said. "The traditional sources are still going to be very important."
I suppose you think the answer is the free market?
"What higher prices are telling us," Robertson said, "is that we need to invest."
What else can we do?
"I think this is a leadership issue," Robertson said. "I think leaders need to be honest with the American people about why prices are higher, not blame a bunch of people for doing business. . . . Nobody's talking about maintaining our oil and gas production. We can't dismiss this issue. As long as our leaders spend their time looking to blame, they're not addressing the issue, which is a complex set of energy issues."
Yeah, well, but, but . . . oh, never mind.
I will look forward to seeing your link that has a more accurate number.
World trade on oil barrel prices is in USD. It is what it is at closing bell.
If shell in Norway or where ever wants to pay for it in Euro's, big deal, it doesn't effect our pump price. just the barrel price which is in USD does.
Now, as I mentioned, IF oil was traded on the world market in Euro's, that would have an effect on our dollar, because it would no longer be the world standard for trade. It would probably slip, and the euro would climb, which has both pro's and cons for them, just as a low dollar would have pro's and cons for us.
And the change in the cost of a barrell of oil has been inversely related to the change in the value of the dollar, yes?
Oil has been increasing in cost, as the value of the dollar has declined. That has been one factor (of many) in the high cost we see today.
Well, if you consider that we get 800 million barrels of oil a day from Alberta alone, even if only one gallon of gas is extracted per barrel,(a very conservative figure) that already more than doubles that figure you gave. Add up our total daily imports, and you'll get a better number. since they claim our refineries are running at peak, we are using almost all of it a day. The point was and is, the government is raking in a lot more than they want us to know.
800 million barrels a day is about 10 times total global oil production.
Here is some data: oil imports to the USA.
It does not appear to come close to your conclusions. I will look forward to seeing your links that either refute mine, or support yours.
We do agree though that the government is the one reaping the lions share of the proceeds. We are just quibbling on how big that share is.
well yes, is a very small way. You are talking small change, pennies per barrel if the dollar happens to trade a 1/10 of a cent lower that day.
What has been driving up world oil prices is not the strength of our dollar, it's speculation on the trading floor over terrorist threats, supply problems (regulation by opec), next years weather forcast, anthing they can use as an excuse to drive up prices to make a buck.
The actual cost of producing oil hasn't gone up much at all from when barrel prices were in the 25$ range. It's all a rip off as far as I'm concerned.
Set up an account with a futures broker and start raking in the cash.
Still, if you want to sit down and figure out total imports, find the total amount of gas/diesel made from the crude, then you will be able to guesstimate average daily consuption. There's no way I believe the 375 million gallon number. Maybe thats what the airline industry alone burns. (or Nazi Pelosi burns flying back and forth to washington)
Now your thinking... If you can't beat 'em, join 'em. That's what I do. There's still good money to be made there.
EXACTLY!! (Yes, I AM shouting!)
The moron liberals who suffer from the delusion that they can power their homes with lawn clippings harvested with a push mower are insane. Beyond insane.
This point needs to be shouted from the rooftops every five minutes until the whole world realizes the truth. The world needs huge amounts of energy, and that won't change dramatically without economic collapse or a miraculous new energy source.
I say we invest in the latter. Liberal / socialists would love the former, as it would empower them permanently, much like it did in the 1917 Russia, and the 1930's in the US and Germany.
From the article:
March 2007 Import Highlights: Released on May 30, 2007
Monthly data on the origins of crude oil imports in March 2007 has been released and it shows that four countries have each exported more than 1.10 million barrels per day to the United States. Including those countries, a total of five countries exported over 1.00 million barrels per day of crude oil to the United States, accounting for 67 percent of United States daily imports.
5 million barrels per day. plus another 30% roughly (33%) from elsewhere or about 3.3 million barrels per day for a total of 8.3 million barrels per day according to this article. How much of that is cracked into fuel? 42-gallon barrel of oil makes about 19.5 gallons of gasoline.
(I don't know if that includes diesel or not) so, we can take 8.3 million x's 19.5= 356.85 million gallons per day. So, it seems that figure is close after all, but may or may not include kerosene/diesel. Ther ya go.
You are justified in shouting but even that won't get the attention of most.
The only exception I take with your statement is that most moron liberals don't want to power their homes like that, they want everyone else to. They are first rate hypocrites.
From the link I provided above: Total crude oil imports averaged 10.348 million barrels per day in March, which is an increase of 1.299 million barrels per day from February 2007.
a refinery makes about 19.5 gallons of gas from each Barrell of oil. therefore we get, 25,330,000 gallons of gas per day from imported oil.
That does not sound right, and should be much higher (logically speaking).
I take it you are working in Van?
How did you swing that?
I visit often, great city.
I will grant your point, and a good one it is.
I would say it has something to do with most of our oil being imported. A weak dollar makes all imports more expensive.
Additionally, most oil on the global market is priced in dollars, yet producers tend to buy things in other currencies like the euro. Perhaps you can see how that upsets oil producers. OPEC and others tend to hold back supply when the dollar is weak. That was true in the 1970's and that's true now.
Geez, I’m talking to a capitalist? Happy Hunting and may your shots be straight up.
I take it you are working in Van?Victoria - he's working in Victoria.
Clue: His home page: "U.S. citizen teaching in a university on an island on the furthest end of Canada. "
I just came from that part of the world (Van BC) Saturday - beautiful place ...
You still have a liberal streak in ya’...quit yer bitchin’ and start investing...stop your yammering because you can’t, won’t or aren’t smart enough to play the futures market...IF IT IS SO DAMN obvious to YOU( it must be because you told each and everyone of us the evil money making FACTS in your post) to make a profit...why don’t ‘cha participate...why don’t you “take the gamble” or is it too risky for YOU and only a “perfect play” for evil people who make money?????
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