Big Oil Big on Profits, Small on American Values
Sometimes I forget that the big oil companies are not really American companies. Sure, many of them are incorporated in the USA, but face it, these are multinational corporations, each bigger than many countries (economically, of course ... the 68 million acres they already have are only leased, not owned). So I really shouldn't be surprised that at a time when oil prices are so high and hard-working American families are trying to make ends meet, the big oil companies are sucking down some pretty obscene profits.
Sure, sure, I know, their profit margins are just middle of the road and they may only own 3% of the oil supply each, but as the punchline from that inverted old joke goes, "They make their profits with VOLUME!" These companies are so big that even middle of the road profits are record-setting.
But if they were really American companies, they would figure out ways to not only reduce our dependence on foreign oil, but also our dependence on OIL. Any oil.
Now I know we are a long way from being oil free, but it makes sense to me to put more emphasis into long-term non-oil energy than into long-term oil investments. If we continue to commit ourselves to burning as much oil (and fossil fuels, generally) as we can get out of the ground, we will commit global suicide.
It is really time for big oil and its conservative allies to become team players in America and fight for America's future. For example, at a time when their profits and the cost to consumers are so high, as a good American, they should voluntarily give up their government subsidies (without raising prices, of course). After all, proud Americans work together to overcome adversity.
But until the oil companies start acting like they are on the American team and help us reduce ALL oil consumption, stop committing us to long-term oil drilling in ever more places, and stop sucking at the government teat, I am glad we have lots of grassroots advocacy campaigns to keep the pressure on them, keep the message out there loud and clear. The more ways we apply pressure, the more effect we will have.
The newest campaign to pressure big oil and its conservative allies is ShameOnBigOil.org. By calling out politicians on the big oil dole, this campaign will help us get big oil off the government dole. It will help us focus our energy on reducing oil consumption with aggressive conservation (yes, including tune ups and inflating tires) and with the development of safe, clean, low-carbon, green energy.
ShameOnBigOil.org is a coalition founded by the Alaska Wilderness Society and Defenders of Wildlife, along with coalition partners Appalachian Voices, the Center for Biological Diversity, Clean Water Action, Clean Ocean Action, Gulf Coast Environmental Defense, Sierra Club, and The Wilderness Society.
The more ways we put pressure on this issue the better. In fact, the more we express our views about the issues that matter to us, the better. Especially when we are talking about such fundamental issues as energy and climate.
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Big Oil has been dictating the political agenda for far too long. It's time for the people to take our government back! ShameOnBigOil.org is a great step in that direction. Keep it coming!
Drilling won't mean a drop at the pump! The irony of this is that oil company profits continue to soar and they're trying to drill more? Remember: We won't see any changes to the $60/a tank prices each time we fill up even if Big Oil has their way and opens places like the Arctic Refuge and our oceans in Alaska! We need to take this as a sign that, as a country, its time to focus on REAL solutions like alternatives such as solar and wind! I'm so glad www.shameonbigoil.org is around. I just hope we can pull up our boot straps and come together NOW to focus on a new energy future for this country! Let's spend our time coming up with solutions that work, and not be scared to do the right thing because its a hard!!! Go to www.shameonbigoil.org and do your part!
Alan - you hit a lot of right notes here. High gas prices ought to be a wake up call to the oil industry's grip on our economic and environmental futures. It's going to be hard to break addiction, but we really have no choice and the sooner we get started the better.
Thanks for the kudos. I agree high prices are a good wake up call. And even though they have receded a little, I am optimistic that the wake up bug has been permanently planted.
Oil companies are not on the American team.
They're on the "Make as much profit as we can no matter who gets effed" team.
They're also VERY COMMITTED to making commercials about how they're "working on" alternative energy solutions but not actually working on them.
Sorry to burst your bubble, but the "make as much profit as you can" team is the American team. We live in a capitalist society where people entrust companies such as these and many others to use their money to maximize their investments. For all the smoke about it, this is what even "do no evil" Google is all about. It is certainly what Boone Pickens is all about - he just wants taxpayers to help him make his bucks.
ExxonMobil - the largest investment in the federal employees' savings plan; my guess is a whole bunch of our government employees want the share price and profits of ExxonMobil and other companies where they have investments to be very healthy.
Right you are. T. Boone is still donating to James "The Oklahoma Outlier" Inhofe's campaign. T. Boone isn't as concerned about global warming as much as he is cornering the next energy market as early as he can.
I am always puzzled that we keep looking to the oil companies to become alternative energy companies. It simply isn't consistent with their business model to become advocates of energy sources designed to undermine their profits. Why aren't we looking to new energy companies? New solar energy companies, new biodiesel companies, new fuel cell companies, new wind energy companies, etc.
To me, it seems that the oil companies are simultaneously making a grab for the new energy market at the same time that they are trying to thwart it. Call me crazy....
Exactly. The energy industry has a financial stake in keeping us dependent on buying our energy from it. What we need is government intervention to help us build an energy system that frees us from corporations and gives Americans "free" energy.
The government did it with the highway system. They nationalized it, standardized and the states help pay for the upkeep through taxes. We need to do the same with energy. Some states have vast expanses that could be utilized to capture solar and wind energy. Others have waterways for to power turbines and then there's geothermal power. We haven't even begun to start looking at the possibilities.
And, imagine the economic and health benefits. What if all of a sudden your utility bills went from hundreds to tens of dollars every month? Plus, new energy means new jobs without losing a lot of old ones. And what if people no longer had to choose between eating or heating.
And because the energy would be clean, our environment would be cleaner. There would be fewer breathing problems, fewer people freezing to death in winter or dying from heat in the summer. It would save also school districts, government offices and other businesses beau coupe bucks that they could used to improve their services.
I think it would be a real win-win if the government took the lead in helping us to kick our addiction to the energy industry.
It's about time we got ourselves off Big Oil's dole. This industry is out for proits--with record ones reported this past quarter--and not about doing what' s best for America. Their shameless push to drill coupled with efforts by the folks in Congress they've bought off, is deceptive and only hurts Americans. Thanks for a great post.
This is a terrific post. The current push to "drill here, drill now" is nothing more than a shameless land grab by oil companies before their friends in the Bush administration are gone. Drilling in these places would do little or nothing to affect the cost of oil in the near or even long-term future. We should oppose these kind of ridiculous initiatives and focus, as others have said on conservation and renewables.
Hi roon,
Looks like a case of "blinded by vengeance".
Am all for conservation and renewable growth . . . but when it comes to what would make Big Oil more money . . . the answer is obvious . . . capitulate to environmentalism . . . the core principle of the oil business is drilling . . . it also has been the curse . . . so, if we remove the ability for oil companies to drill . . . then the supply slowly declines and prices rise, with the oil companies benefitting.
One producer told me "Environmentalists are my best friends . . . and they don't even know it" . . . the best thing that could happen for big oil is for America to stop drilling.
Now, while the discontinuing of drilling helps big oil . . . it really hurts the US Independent driller, who drills 80%+ of the US wells.
So while we think we are taking vengeance on Big Oil . . . we become part of a paradox . . . we actually are helping big oil, while hurting the guy who really could do something.
Conservation, efficiency and continuity . . . that is where we should place our efforts and passion.
Most of the oil ends up in major oil companies refineries who end up selling to consumers. Thus it's the oil companies who are reaping the economic benefits. I don't see where vengeance comes into play here.
Most of what you post is true, but you are leaving out the most important element of the push to stop Big Oil from destroying our pristine environments and polluting our world, which is that alternative energy sources will be replacing the oil we now drill for.
Oil as a main energy source will be obsolete within 50 years, maybe sooner if we take up Gore's 10 year plan. And that is what Big Oil really fears - an end to their obscene profits at the expense of the rest of the world.
Can't happen soon enough.
Shame on big oil is right! Renewable energy and energy efficiency are the answer to the energy crisis, not continued dependence on dirty fossil fuels. I am sick and tired of US lining big oil's pockets and polluting the environment. Thanks to grassroots groups like ShameOnBigOil for giving citizens the tools to speak out and protect our fragile coastal and arctic ecosystems from greedy oil profiteers!
The galling thing about the recent push for more drilling is that the high gas prices from which we currently suffer are in large part a result of Big Oil's record breaking profits. They jack up the price of oil by increasing profit margins and then tell us the only way to remedy the situation is to drill. But more drilling won't help our fossil fuel problem in any short-term or long-term sense.
Big Oil has shown that the market will bear $4 gas. Any new production in the United States will be cheaper to produce and transport and, thus, will yield higher profit margins than foreign oil. That's Big Oil's real motivation. We need to see through this scam and make sure Congress does, too!
Hi Mainah,
See you had a little trouble with that CPA exam . . . study a little, most pass it on the second round.
Let's assume we eliminate the refiner's profit entirely, cut the pipeline's profit in half and give the big bad Oil Company a maximum of a 5 % profit on each barrel produced (compare that to the profit we give Victoria Secret) . . . and for most oil companies their profit would rise!
These big oil companies are multinational . . . should we really be taxing the profit they make from producing oil in Nigeria and selling the oil to India?
Now, other than far offshore and Alaska, most of the domestic US drilling is done by independents (>80%) . . . not the "Big Oil" companies . . . for independents it is a "hit or miss" business . . . the oil industry has a habit . . . the drive for profits historically results in lower prices.
Talking about Big Oil is a diversion . . . focus on conservation, efficiency and continuity.
Great post Alan. Drilling in the Arctic Refuge to possibly save about $.03 a gallon in 10 years is absurd. This is really about Big Oil wanting to rake in more money as the rest of us Americans continue to be gouged at the pump.
Mr. Rosenblatt,
Do you remember the 20th century? America rose to its status as the world's foremost super power on the back of cheap energy. I challenge you to find an economist that will say that the economic growth we experienced through the 1990's, and throughtout the 20th century, had nothing to do with cheap oil.
It seems a little silly to me to sit back and talk about sacrifice for multi-national corporations that employ tens of thousands of Americans directly, millions indirectly through contract, pay $ Billions in US taxes and go after opportunities to invest capital overseas in order to bring profits and jobs back to the US that would otherwise not exist. Subsidies or no subsidies, we'd be a lot worse off without "American" oil companies.
shell oil is not an american co
Could you provide some specifics of the millions of jobs provided for Americans here in America and the billions in taxes paid by Big Oil?
Last I checked, America is hemorrhaging jobs and Big Oil is getting billions of dollars of our tax dollars in subsidies.
Also, last I checked, the locals in those foreign countries where American and multinational Big Oil is drilling are constantly protesting against those oil companies for human rights violations, environmental degradation and giving little back to the locals while raking in record profits for themselves.
Hmmmm... in the 18th and 19th Centuries, America built its economy on the backs of slave labor. Does that mean we should have stuck with that? Hardly! Just because cheap oil got us the economic growth of the 20th century doesn't mean we should blindly stay with it. That cheap oil also brought us pollution and global warming... which costs, when offset against the economic benefits of cheap oil, significantly alters the bottom line in a negative direction. And we have yet to fully suffer the consequences of burning so much cheap oil. That will come unless we switch gears fast. Hmmm... Switch gears here, switch gears now! Print that on a t-shirt!
So I say to you, yes, cheap oil was the economic engine of the 20th century, but like slave labor, the economic engine of the first American century, we have to move on.
Alan - Thanks for writing on this issue and specifically the Shame On Big Oil campaign. The site is effective with a clear, emotive call to action which hopefully will unite people for energy alternatives (...and help to "put more teeth into enforcing our new vision" like commenter Zenobius suggests.
I think oil companies are doing everything they can to destroy demand for their products.
You argument suggests that we have to rethink the idea of the corporation.
Right now, companies are licensed by the state, most often Delaware, according to some vague phrase like "in accordance with public policy". Needing something a little clearer than that, the MBA schools have converted that to maximizing stock price, pretty much at all costs; but without breaking the law, or at least not getting caught breaking the law.
If we want companies to act differently, we'll need to change the corporate licensing structure, make it clear what we want, , and put some teeth into enforcing our new vision. This will involve making a couple of examples, which might or might not be oil companies. This is a touch process. It will take a while. But those of us on the left should probably start now. But it may be worth it, since it is not only on the left that people wonder whether multinational corporations are really good for the US.
Hear, hear.
First step, remove the designation of 'personhood' for corporations.
Agreed on the personhood designation. We give corporations all the rights of a person, but not all of the responsibilities; though the recent moves to convict and jail corporate leaders for the crimes of their companies is a move that direction.
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