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.
He didn't mention Iraq and Afghanistan. I guess that's because Bush, Cheney, and Rove are controlling it all.
This guy is just spinning for the oil companies. How do you know he isn't making this stuff up?
What about Halliburton?
I'm not a liberal, but I pretend to be one on FR.
Did you stay at a Holiday Inn last night? lol
We are becoming more efficient in it's use and also cleaner.
The next idiot that rages against big oil, ask them what we used before oil was discovered.
Why no mention of W’s weak dollar, or the timely refinery breakdowns?
LOL.
Get out the tinfoil hat!
Try telling a clueless lib that it not BIG OIL it BIG GOVERMENT
Exactly...And when politicians think they can score some points by pandering for votes they go after them for gouging or try to tax them more which only hurts the consumer.
Some one needs to do an indepth investigation of the oil futures traders on Wall Street.
They are the biggest influence on the price per barrel, IMO. They are getting VERY rich, and they are laughing at us.
Why no mention of W’s weak dollar ...Dude! HUSH! For those who live in Canada yet pay student loans to the states--e.g, me--the weak US dollar is a sign of divine favour. When the Loonie overtakes the dollar--which it is predicted to do in the next 8 to 12 months--I shall do all my shopping in Seattle.
Beeswax, tallow and whale oil? And that was just for lighting purposes. For power, we used horses and oxen, or wood-burning steam locomotives and riverboats.
What small quantities of seepage petroleum were used, was primarily as a form of patent medicine. It fulfilled the primary requirement of medicine in those days, by tasting like H*ll.
Kerosene became the salvation of the American frontier.
Okie, a guy who drives a kid’s TN’G Milano 49 Scooter is complaining to me about the $.10 a gallon profit Oil companies make?
How about being a little upset about the $.60 a gallon tax the Govt takes?
How does a "Weak dollar" have anything at all to do with the price of oil?
I don’t know for a fact but I thought total taxes were much more than $.60 a gallon.
What about it? I'm so sick of leftist loons whining about "big oil" and Haliberton and conspiracy theories, that sometimes I wish they would just close their doors and dissolve their companies. Then watch everyone whine "where have all America's big oil and corperations gone?" while in line for food stamps.
That's not how leftist loons envision the new world however, they think they are going to live on nice little garden plots of land, growing their own "organic" vegetables as bunnies and deer walk up to them for a pet. They think they are going to have houses tiled with solar panels, and windmills spinning in the backyard suppling all their energy needs.
No mention of a JOB to pay for all the solar cells, batteries and wire however.
They sure are in for a shock when starving masses raid and trample their garden, loot their house, or even worse, kill them for it.
300 million people aren't going to be living in any type of "green" utopia they envision. The fact of the matter is 300 million people need "big oil" and large corperations to sustain them, otherwize total kaos will reduce that population rapidly.
Not to mention the MSM. They need to inform people on how supply and demand works and not politicize a serious problem.
Still waiting for someone to explain to me how a “Weak dollar” has any effect on the price of oil.
Still waiting for someone to explain to me how a “Weak dollar” has any effect on the price of oil.Um, OK. Let us say that you're trading thumb tacks for paper clips. Only it turns out that everyone and their brother has all the thumb tacks that they need. Your hoard of pointy thumb tacks simply is, therefore, not in hot demand. So: you get fewer paper clips in return for however many thumb tacks you contract to exchange. Now, the thumb tacks are dolars, and the paper clips are oil ... get the idea?
The average total tax on a gallon of motor gasoline nationwide, weighted by consumption, is approx. 51 cents/gal.
Correct. Just tell them that the discovery of oil saved the whales.
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