Despite giant pay packages, I wouldn't want to be a CEO of an oil firm if my life depended on it. Everyone hates you. You have to deal with some of the most unsavory people in the world who steal, bribe, reneg, and lie to you, all-the-while demanding signature bonuses, sometimes upward of $70 million. You at times put your own life at risk via your business travels.
Back home in America, you have to deal with your own brethren who spit in your face, but at the same time want $2 a gallon gasoline consistently, as if it's their birthright. You have to have an appeasing and socially acceptable Green ethos. That's all before you have to deal with a lame president, House, and Senate who collectively could not come up with a National Energy Policy if their offices depended on it. They love the PAC money though.
(As of this writing, the Department of Energy has not discovered a single drop of oil for America. Alec Baldwin wants to shut down an oil company. I say let's put the DOE down first Alec -- I'll work with you on it.)
Tom Bower's new book, Oil: Money, Politics, and Power in the 21st Century, is the best book on crude oil that I've ever read. It starts with the discovery of oil here and abroad and how it's been ingrained in our economy and culture ever since.
Bower spoke with more than 250 industry professionals, politicians, and analysts over an 18-month period of time in order to complete this book. It is written as the definitive history of crude oil -- and it's backed up by facts. Not make believe facts or Michael Moore Facts either, but real facts, that in the end provide readers with a well-rounded understanding of America's addiction to crude oil and how we got here. No one is going to like the conclusion, but "A is A." You know your history with crude oil. It's in everything you use every day.
Tom Bower is an award-winning, full-time columnist for the Guardian UK. He does not hold back in this book one iota, and he doesn't let anyone off the hook. If you read the book, I think the results will surprise you.
"Oil men are intelligent. Most of them are honest and they represent their corporations fairly," he said. "They are committed to a very complicated business -- geographically, geologically, and politically. No one man can do it alone. It requires a culture to make it work."
As recently as 1996, American crude oil production fell to 6.9 million barrels per day, and we became a permanent net importer. For every $1 rise in crude oil, Saudi Arabia brings in $2.7 billion in revenues to their country, mostly via Saudi Aramco. Iran, via the National Iranian Oil Company (NIOC), brings in approximately $900 million for every $1 rise.
Bower has some criticism for the CEOs and their response to the Green movement (what he calls green):
The environmentalists and green influence the price of oil. Oil companies have had their focus diverted by green. Their prime job is to drill and find oil. The green movement has been unhelpful to the oil industry on a whole.
But what about the giant hole in the ozone and that giant iceberg that's allegedly four times the size of Manhattan that's broken off the Petermann Glacier?
"On the other hand, the energy is cleaner. But whether the oil corporation can actually deliver the green movement's desire's I think is ridiculous, because in the end, that comes down to government," Bower writes.
It took more than 20 years for the Exxon Valdez disaster to be squared away -- at least legally. And what they paid in fines was a pittance.
"Like Exxon, BP will take decades and generations to reduce and avoid damages from the Gulf spill as best they can. In the end, Exxon paid the equivalent of two days revenue for the Valdez disaster," about $500 million. (FYI -- the Exxon Valdez is still in service. It's been repaired, sold, and renamed.)
But the good news is that according to White House energy adviser Carol Browner, 75% of it is already gone!!!
Bower is not so convinced that America will come down too hard on BP:
One-fifth of all the oil produced today around the globe is consumed by America. America needs BP's oil. They employ 30,000 people in the US. They are not evil people. They are not malicious people -- they have made a terrible mistake. But on the whole, as much as I'm critical of them, I have not met a bad BP-person -- except perhaps John Brown. You don't get to the top by being an angel.
Although, Bower disagrees with me, I suggest that corporate CEOs get away from the sole focus of trying to meet the quarterly earnings number. Take risks and be bold. We need energy. I'd like to see the House and Senate give tax credits to investors who can take the risk and who have the ability to jump start investments in biofuels, electric cars, hydrogen cars, and cheaper oil for the time being, so that we can end our addiction to crude oil or at least cut it down substantially.
In order to get off our crude oil addiction of convenience, America is going to have to make a lot of uncomfortable changes in its usage that will require a lot of discipline: car pools, bikes, buses... walking. For those of us who are addicted, those changes are going to be a major inconvenience to our current way of doing things. Anything less of a commitment is an endorsement of the status quo.
As long as we are addicted to crude oil, the derivative products heating oil and gasoline, and the thousands of products that are derived from crude oil, we are partly to blame for the environmental damage and oil spills such as Deepwater Horizon.
I interviewed Bower and recorded a 23-minute podcast that's available at my blog MartinKronicle.
Below are some Q & A from the interview:
Michael Martin: Who do you think benefits the most from high crude prices?
Tom Bower: Oh, certainly the producers for sure. They are the ones who try to manipulate the price higher. The Saudis gauge the demand and cut their production so that they can maximize their revenue. They do this every day.
MM: Who benefits from oil embargoes?
TB: The traders and speculators.
MM: What is the best way we can get off the crude oil addiction?
TB: America needs to get on diesel. It will reduce need for oil by 15% per day. They need to get off the SUVs too. But Congress has never passed a substantial energy policy. It's always voted down by their constituency because they're afraid to miss out on their votes. America is wasting a great deal of money on their energy."