The Audacity of Contempt

Take gas prices, the most pressing issue on the minds of Americans. Offer a blatant ploy that in fact won't help -- but will profit Big Oil. Pocket over a million in contributions from oil executives and use the money to put up an ad promising to take on Big Oil.

Call it the audacity of contempt. John McCain seems intent on proving that it is possible to scorn Americans into voting for him. Consider McCain's latest ad in the context of his "drill, drill, drill" energy policy. The text of the ad reads:

"Washington's broken. John McCain knows it. We're worse off than we were four years ago. Only McCain has taken on big tobacco, drug companies, fought corruption in both parties. He'll reform Wall Street, battle Big Oil, make America prosper again. He's the original Maverick...

"Battle Big Oil." Say what?

This is the same John McCain who just made off-shore drilling for oil a centerpiece of his campaign, reversing his longstanding opposition to it. He did so, not incidentally, while on his way to Texas for a series of fundraisers. The result unleashed a gusher of donations for Big Oil executives -- according to Campaign Money Watch, a nifty 1.2 million from Texas gas and oil interests in June alone, the very month McCain came out for drilling. He no doubt was told what to expect from the dozens of oil company lobbyists and retainers that reportedly are working with or raising money for his campaign.

Exxon reports an $11.7 billion profit for the last three months -- a new record in the history of corporatedom. The big five pocketed more than $140 billion last year. So Barack Obama suggests that we provide every American with a $1000 tax rebate to help pay for rising prices, paid for by levying an excess profits tax on the oil companies.

What does the maverick battler of big oil say? No way. McCain angrily dismisses the idea, saying that it would lead the oil companies to reduce their drilling in the US.

Now, all of this is based upon what might generously be called a big lie. The Big Oil companies, who hold leases for millions of acres that they aren't drilling on, have no intention of drilling for oil off our shores in the near future. They are simply looking to use the crisis to accumulate rights to drill in the future.

Moreover, even if they started tomorrow, it wouldn't help. As Bill Sher of the Campaign for America's Future detailed, Bush's own Energy Department reports that off shore drilling would produce no relief until about 2030. (McCain disputes that saying that we'd see oil in a year or two. His source? Anonymous Big Oil executives who no doubt have only the public's interest in mind). And once the oil came on line, the Energy Department tells us, it would save us about 6 cents a gallon off the price of gas. (Ironically, McCain regularly sneers Obama for suggesting that simply filling our tires would have more effect on supply and demand than drilling off shore. But again, according to the Bush Environmental Protection Agency, Obama had that right. If every American kept their tires filled, they'd save the equivalent of 12 cents a gallon starting tomorrow. Drilling sounds muscular but it is simply hot air that would be better used filling up tires.

But this isn't about policy; it's about politics. McCain pretends he's for action now. He paints Obama as out of touch. The fact that the plan would cater to the interests of the oil companies and not the pocketbooks of Americans is beside the point. After all, John McCain is the maverick, ready to "battle Big Oil."

Will it work? Daily tracking polls suggest McCain has been gaining on Obama. And other than Nancy Pelosi, Democrats have been deciding to switch rather than fight on off-shore drilling.

But there is one problem. Americans really are hurting this year. It isn't just a "mental recession," it's the real deal. And they are paying greater attention than ever before. This week, Obama released a full-scale plan to move to energy independence, investing $150 billion over 10 years in renewable energy and conservation, providing subsidies to ensure that the US captures some of the new green auto and appliance markets of the future. That puts us on a long-term path to a sustainable energy future. In the short term, Obama takes on big oil with the excess profits tax to help Americans struggling with the cost of gas and food. McCain has a pretty good long term plan also. The differences would be worth debating.

But one difference is clear. McCain's not about to support a tax on the big oil companies whose executives are helping to fund his campaign. But that won't stop him from selling himself as a maverick promising to "battle Big Oil." If nothing else, he has the audacity of contempt for the very voters he needs to win.

Comments

[jpexpat]

I’ve worked for an oil company for 25 years and I’m still amazed by the rhetoric spouted by most very uniformed Americans. To profess that we don’t drill because we want oil to stay high is utterly ridiculous. From a business standpoint if our shareholders don’t see year over year production and reserve growth our stock price gets punished severely. And from a personnel perspective, our raises, bonuses and stock grants are all tied to meeting our corporate goals, which are primarily to increase production and reserves! If we don’t drill we eventually run out of product to sell. Not a very good business model.

Federal leases already have a use it or lose it provision on them. It takes time and people to evaluate a given lease to determine if the economic potential justifies the costs and risk associated with drilling and developing that lease. We don’t decide not to drill a particular lease because we want to drive up oil or gas prices although it may take higher oil/gas prices to make that lease economically attractive.

I agree that America should be investing in renewables. Forget that ethanol BS, we need to invest in solar, wind, hydrogen, nuclear and battery technology to get us energy independent.

[BillCarson]

Checking the 2030 and $.06 a gallon numbers from Bill Sher's article...

The 2030 number does indeed come from the energy department:
http://www.eia.doe.gov/oiaf/aeo/otheranalysis/ongr.html

However the 6 cents a gallon number doesn't come from the energy department, but is instead extrapolated from an article by Gary Richards of the San Jose Mercury News: http://www.pwmag.com/industry-news.asp?sectionID=760&articleID=696854 in Bill Sher's article: http://www.ourfuture.org/blog-entry/offshore-drilling-comes-empty

Just FYI

[DuganS1]

The $0.06 number is silly. It's impossible to determine the impact of the additional oil supply on prices as prices fluctuate wildly day to day. Heck, on some days the gasoline futures fluctuate over six cents in an hour and over 10 to 12 cents in a day. I always wondered where that 6 cent number came from, because they obviously have never traded oil or gas before... or even followed them for that matter.

[hglassberg]

Why is everyone prejudiced against pollution? What did pollution ever do to them? Whenever we ride in our car, we turn on the air conditioner so no pollution can get in. We bet Robert does too. That way, instead of having to complain about pollution, we simply ignore it.

As to oil, why shouldn't the oil companies make money? That's what oil companies are for. And by making tons of money, they make us drive less. Which lowers pollution, doesn't it? But if the day comes when oil returns to 25 dollars a barrel, we still won't take it out on pollution. We'll do what we've always done. Roll up the windows and turn on the air.

Finally, John McCain did change his mind about Big Oil. But his situation's changed, hasn't it? He can't run a campaign on fresh air. He needs money. And Big Oil's got it. By giving it to McCain, Big Oil guarantees it'll be able to go on making huge profits, which will make all of us drive less, which will lower pollution and diminish the outcry against it. Look at the Big Picture, guys. Drilling for oil to free us from dependence on oil will, in the long run, make the world a cleaner place.

Yours sincerely,

The Playdo Institute
Handel Glassberg, President

[verhaftik]

Big Oil? Oil in general? I feel like I am living in the Twilight Zone.
Has McCain forgotten about global warming? Oil should be as dead as the rotary phone.
Why is he even discussing this? Is innovation beyond his vocabulary?
*banging head against the wall*

[liberalloons]

*liquify

[Ankhst]

Actually it's "liquefy", but that's not important. What's important is taking what few steps are available, to decrease the amount of money flowing to Big Oil (e.g. start by removing the "Enron loophole" and the most ridiculous government subsidy in the history of subsidies -- yes that's my subjective opinion)

[liberalloons]

Time to luiqify coal

[GQB]

For Christ's sake, will someone PLEASE start pointing out that even if the oil companies started drilling in these new locations today, the oil would NOT be flowing to US consumers, but just into the global bucket!
Even if there were some sort of silly guarantee that such oil DID stay domestic, its STILL one big bucket... more would just be diverted from imported sources.

People have to stop thinking of oil companies as American agents... their sovereign, international entities unto themselves and any 'drill drill drill' strategies are nothing but wealth xfers to the oil companies.

[MourningDude]

So you take from Big Oil, who has provided a steady flow of crude to power our economy, and you give subsidies to US Automakers, who have done nothing but produce larger and larger SUVs that are less and less fuel efficient for 20 years.

Gee, that makes sense.

Why does GM need subsidies? Honda just posted its largest PROFIT in history last quarter. 2007 was the most profitable year ever for Toyota. The marketplace has rewarded their good decisions.

Punish success and reward failure. It's the liberal way.

[PioneerKing]

It's not taking from Big Oil.
Republicans claim taxes prevent investment and stunts job creation. However, when give the opportunity Bil Oil has proven that is not true.
Although posting record profits for several years Big Oil has not been investing in: refineries, the off-shore drilling barges that are needed, increasing storage capacity, the purchase of newer and improved oil tankers nor the utilization of the developemtn of the oil leases that they maintain.
Big oil has benefited from special tax breaks and the republicans short sighted policies such as tax breaks for purchasing gas guzzeling SUV's.

[Lemeritus]

Huzzah, PioneerKing!

I tend to dismiss windfall profit taxes out of hand as counterproductive, an illusion and a means of punishing that will actually backfire. Your points, however, are salient and bear repeating. We've been SUBSIDIZING Big Oil and have gotten nothing meaningful for our investment -- refineries are not running to capacity, R&D is languishing, and millions of acres of leased land go unexplored. And Detroit has gamed the American people with ad campaigns glorifying SUVS (which skirted fuel efficiency and safety standards and, yes, took advantage of tax credits meant for "working trucks") instead of getting ahead of the technology curve.

Time to pull the subsidies and put the auto industry back to work producing transportation that works for a new, independent America.

[lisakaz2]

Seems the McB--- of 2008 likes using the McC--- of 2000, counting on the MSM to not report on the bait and switch. And they're not, so let's see if he gets away with it.

[Bluegrassriver]

And who really believes the oil companies want to drill more oil? That's right, those smart dudes want to increase the supply of oil to drive down the price of gas. Go get em Rush and Newt! Is the public smart enough to see through this?

[KillTheMessenger]

There is nothing to believe. You can look up the rig count for world wide oil drilling. It's up. But just because you drill more does not mean you can produce more. That simplistic thinking works in the early days when oil reservoirs are large and one can pick the ones with the best geological properties. Once the easy ones are gone, drilling does not result in rising production. At best, it results in a delay of the final decay.

[DuganS1]

Oil companies are valued by their reserves. The stock price of Exxon is currently the lowest it's been since April, 2007, mostly because their refining operations make no money and they've been unable to replace reserves.

[Bocababs]

I am going to say this on every site....every day until people get sick of it. For those of you who are going to vote AGAINST your wallets and pocketbooks this Fall....because you are not happy with the Democratic Candidate for WHATEVER reason, I say -- What Fools!!!

This oil thing with Exxon is one of the ways you can STOP putting money in the pockets of big oil. Remember that oil that they drill for is going on the open market. McCain does not care about you....
and who the hay wants a President where half his GOP Party do not trust him or cannot stand him...yet they all stand behind him....because Republicans HATE to relinquish power. Remember that as we move along with the Swfit Boating of Obama and all and any attempts to smear him.

[Paul]

Returning money to consumers for purchasing gasoline will not change their behavior.

The price of gasoline needs to be at the pain threshold so that we will use less of it.

You wanna tax the oil companies for excess profits, fine.

But put the money towards mass transit - not automobiles. Better yet, tax imported oil so that the money goes straight to mass transit projects and out of the hands of big oil, which will just use it to find ways to make us buy more of their products.

[Whipsmart13]

why not create a "non essential" tax on entertainment items (movies, games, TV, internet) because Hollywood and Wall Street do not need any more money. I'm sure the movie "Batman" has made more of a profit percentage than any of the big oil companies and "Batman" is not a service/product that is essential to the economic health of our country.

[ibsteve2u]

Me, I think that we should give the Republicans what they want, and just not tax them at all.

In return, Republicans should receive no protection by our military, no protection by our fire or police departments, no right to use any U.S. infrastructure (to include our highways, air or water ports, and waterways by themselves or their agents), no right to employ anybody who has been educated with funding provided in whole or in part by tax dollars, no right to own land in the United States as discerning whose land should be protected in time of war or during a natural disaster would be too costly, no right to use hospital emergency rooms of hospitals that are in any way funded by the public...in short, no right to anything that is in any way funded or subsidized by tax dollars.

That should make them happy, eh?

[Alethea]

No, there's a special evil being perpetrated upon Americans when it comes to Oil. And it's called market manipulation and price gouging. Unfortunately, companies can only get away with price gouging when they are either a monopoly, or a part of a small group (a cartel if you will) of rival companies who have agreed to do the same. The very same thing happened with the Robber Barons of the 19th century, and it contributed to the Great Depression in the early 20th.

Only these Oil Barons can lose refining capacity (through neglect, war, or natural disasters) and end up MAKEING EVEN MORE MONEY THAN THEY DID BEFORE. Most other companies would have to eat the monetary loss of production because their rivals wouldn’t raise prices, and in order to compete they would have to keep prices low. But the Oil Barons can do this because they control the ENTIRE supply of something that MUST be had. They can even raise prices at the PROSPECT of losing production because someone HINTS at going to war (even though it hasn't happened yet). No other company can do that, because no other company has complete control of an essential resource quite like they do. Hence why we shouldn't feel bad taxing them in particular.

[LeftRight]

No, don't put it just towards mass transit. Put it towards alternatives. Other sources which AREN'T oil, but provide us energy!!!

[theistus]

whats wrong with both? :)

[Alethea]

I'd be fine with that.

[Strywever]

I agree that high gas prices may be the *only* way to get Americans to wean themselves off oil. However, viable alternatives to filling their tanks simply do not exist yet in this country, and it will take some years to put those alternatives in place. Meanwhile, people are losing their jobs because they can't get to work, or worse, are unable to even look for a job because they have no transportation. Schools and municipalities are shutting down operations one day a week. People are being forced to choose which *necessities* they can afford to purchase -- forget luxuries. Some are going hungry or going without even basic necessities such as hot water.

Our government has been in the clutches of big oil for a very long time, and that -- more than anything else -- has contributed to the untenable situation we face today. People are willing to make sacrifices, willing to make change. They need only to be asked. Our government has not asked. In fact, our government has encouraged people to use oil wastefully by refusing to set and enforce better fuel efficiency standards. And now someone who proposes to lead our government is suggesting that the government and their big oil pals, who created this situation, owe citizens no help in dealing with the tremendously negative results of their policies and practices.

Idealism is lovely, but people have to eat.

[MyOwnPerson]

Taxing oil companies on their "excess" profits isn't a very wise thing to do as it will just increase the price of gas. Anything you do to hit the oil companies in the pocket will just be passed to the consumers to make up for it. That idea needs to be re-evaluated in a big way.

[Alethea]

If they raise prices because of taxing excess profits then those profits will also get taxed heavily. So obviously that excuse doesn't work.

[KillTheMessenger]

The very point IS to increase gas prices. You really need to come to grips with reality. Party is over and they are removing the free drinks from the bar as we speak.

[ibsteve2u]

Some interesting information from Bloomberg ("Chevron May Delay $2.8 Billion Brazilian Oil Field " at http://www.bloomberg.com/apps/news?sid=abNsYzqugITk&pid=20601103):

[bq]
Demand for deep-sea rigs and platforms has increased order backlogs at shipyards in Asia to record levels, with deliveries stretching into 2012.
[eq]

Still think offshore drilling - or, rather, giving Big Oil control of our offshore oil reserves - is a "quick fix"?

[MyOwnPerson]

The only quick fix is for the government and corporations to look at their work-base and decide who can work from home instead of driving in to the office everyday and to move forward with flex-time and a shorter work week. How many people would work a 10 hour day for a 3 day weekend? How many people can do their job from home? With available technology I know meetings take place over the internet, along with presentations. People probably only need to physically interface with each other once in a blue moon.

[mjt218]

I think McCain's an idiot for proposing it as a quick fix.

However, it is important to note that oil companies sign long contracts with rig operators, and work to keep them busy for the contract length. Typically, I would think it would be hard to find a drill rig with a queue of work that extends for more than 2 years. Oil companies work around the clock to add to the queue for the rigs. The fact that rigs are not available on the open market for lease does not mean that they can not be moved over to a lease off Florida, or the East Coast within the next five years to perform exploration work. They would just be moved over under existing contracts.

[emstrem]

What a STUPID idea. That is not a capitalist society, but a communist one. Instead of whining because one sector of the economy is making money, People should buy stock in these companies. What is next, Ford or GM starts making money again is Obama going to demand that every American gets a new car, or if Dell's profits are too high, does he insist we all get a new computer? Give me a break.

[Strywever]

"People should buy stock in these companies." Would that be the majority of Americans who barely make enough money to put food in their children's mouths, let alone gas in their tanks? Perhaps this $1000 rebate would allow them to do that, once their other bills are paid.

Big Oil's argument has been that they need these excessive profits to support R&D efforts in those years when they aren't making excessive profits. How much have they increased their R&D spending over the last two years? I dare you to look it up.

[lisakaz2]

When did Adam Smith say collusion was a good thing? Or buying the system. If you remember correctly, he didn't like mercantilism and would not have like its modern version, fascism, either.

[Strywever]

Furthermore, Big Oil has gotten an awful lot of financial breaks at taxpayer expense, for years. If it's okay for taxpayers to give them breaks, why shouldn't taxpayers ask them to return the favor?

If you're so in love with unregulated capitalism, why should they ever have received ANY tax break?

[Dem4Freedom]

You're missing the point!!! You fail to make some important distinctions in the examples you give. They aren't exactly a direct comparison of what's going on with the oil companies. For instance in your Ford/GM examples... They would be accurate if you said Ford and GM started making record profits and a base model Ford Focus cost $45,000 dollars to buy... and if Dell had record profits and the cost of a base Dell laptop was $10,000 that's more along the lines of what's going on with the oil companies and their record profits vs the cost of a barrel of oil/gallon of gasoline... Another difference is that there are other companies in competition to Ford, GM and Dell where a consumer could most likely find a lower price for a comparable product... Tell me... where is the equivalent "free market" competition that is supposed to drive down prices... With oil/gasoline.... It doesn't exist... The entire market is in this together... fixing prices as high as they can get them.... With the Bush administrations help and with McCain pandering to them for contributions... McCain is more of the same... More oil isn't the solution... It's the problem!!

[abeone]

Capitalism isn't giving 4 billion in tax breaks and subsidies to Exxon Mobil and big agri businesses either. That is simply welfare for the rich or the trickle up economy. It is time some of it trickled down for a while.

[ibsteve2u]

"The Big Oil companies, who hold leases for millions of acres that they aren't drilling on, have no intention of drilling for oil off our shores in the near future. They are simply looking to use the crisis to accumulate rights to drill in the future."

Agreed, most heartily.

Now if somebody would only find out how much of Big Oil's money was in play in the hedge funds and commodities markets during oil's spectacular, "drill here drill now"-inducing climb...