Goodbye Good Ole Boys, Hello Hollywood? How Will Obama Handle the Oil Industry?

Having grown up in Texas Bush oil country, and later living and working in and around entertainment and technology economies such as Seattle, Los Angeles and abroad, where a more liberal mind-set supports a future with Obama as the leader of choice, I keep trying to figure out how this is going to work. If (and I hope it happens) Obama wins, how will he deal with the oil companies,? Bush is pushing through opening up protected lands and coastlines to drilling (using as an excuse the need to be more self-sufficient because look at all of the instability in oil producing regions...Iraq, Sudan, Iran, Nigeria, Venezuela...and now Russia...isn't that timing interesting?) Two entirely different ways of existing, one based on a LOT of petrodollars, and the other, on a sustainable future, are coming into conflict as they did in the times of Kennedy and Johnson.

Obama is about vision and a better future, but he hurdles the will encounter with the oil industry are not that different than those John Kennedy dealt with decades ago. The debate that took place back then dealt with the depletion allowance which means that the oil companies virtually do not have to pay taxes. Yet this mindset is also benefits the more liberal Hollywood machine. Large US corporations, Hollywood, etc., base their subsidiaries in places like the British Virgin islands, (does Hollywood get to claim a "depletion allowance" as soon as their product say a film is put out there, it could potentially lose value, be pirated, etc.?) and do not pay taxes off that income. Our largest producers and potentially largest payers of tax, do not pay much tax and have the most creative accounting known to man.

The Republicans will always back a pro-oil immediate future, until their own voters, and the lobbyists filling their coffers with dollars, stop supporting them. Just as Hollywood backed Kennedy, we now have it backing Obama. But Hollywood is not just about movie stars, entertainment is our largest export! Yes, reality shows, blockbusters and CSI and the jobs they create and the profits they bring in, define us. Interestingly enough, both oil and entertainment, are dependent upon pipelines, trade regulations (remember those drawn-out GATT talks during the Jack Valenti MPAA reign and the blocking of Hollywood films from China?), and monopolies.

Bush took a pro-oil Texas mind set to a national level, just as he did with tort reform which he pushed through in Texas, and as President extended nationwide. US citizens basically can no longer sue to stop abusive behavior by oil companies, and even worse, Big Pharma and biotech...they test a new drug on you, you get sick and die, too bad! Your husband or father is injured in a refinery, as a soldier at war with Iraq, or your child by those nasty adjuvants in vaccines, if you can afford a lawyer, the company will never have to pay out the huge amounts of the past and will simply continue its abusive behavior. Hey...and if you do make it to court, those judges are bought and paid for and appointed for life by...none other than the Republican machine! Hollywood entertainment may harm us in other ways...but we can always turn it off.

It was no accident that another Texas President, Lyndon Johnson, appointed Jack Valenti, who had been a PR guy for the oil companies, to his administration. Valenti then went on to rep another huge industry, the film industry, as a very powerful President of the MPAA. Just like oil, he argued before world trade bodies, entertainment is a product. Maybe it is, but France and others fought back like hell, and subsidized and protected their industries, because otherwise...they would have no industries! And this is also about their local economies, and JOBS!

The new head of the MPA is a very smart man, Dan Glickman, and not by chance formerly head of Agriculture for Clinton. If we consider food supplies and biofuel to be the new oil, his home state of Kansas and the parallel between subsidies for agriculture/energy and the support of the entertainment industry as our largest export echo the story of Texan Jack Valenti's understanding of the oil industry before repping Hollywood. So as long as Obama sees the oil industry, and the entertainment industry which is supporting him, as both being about the economy, jobs and profits, he will be fine.

If Obama can help support a shift into a new renewable energy future, and encourage a majority to support it, he can begin to chip away at one long-entrenched economy by replacing it with a more visionary one. Perhaps Hollywood should take note and help in this process. Just as they indirectly supported US dominance via many storylines in their films, perhaps they can promote a more viable future. But the future looks a bit grim, just look at the latest Speilberg Raiders of he Lost Ark in which the Russians are again the enemies, the Cold War never really ended, and a "perfect" American suburb is blown to bits. Maybe Obama (rumored to be played by Will Smith) can help us feel more optimistic about America's future? And export a more positive image abroad?

Let's face it, Obama is a movie star. The old saying that politics is full of people who were not good looking enough to be movie stars no longer holds true. In addition, Obama is an international product, and just as Hollywood now makes most of its profits abroad, Obama is highly successful around the globe.

But Obama would not fit well in a Texas oil company board room. Big oil has to change and it will not do so without a fight (or a few wars as we can see). Obama is going to have to find a way to function with these enormously wealthy and powerful companies and individuals. He has managed to do so in Hollywood, maybe he can meditate and reach out to the ghost of Jack Valenti, who seemed to have as many friends in the Exxon boardroom as he did on the red carpet in Los Angeles.

Comments

[WorkingClass]

We will nationalize the oil companies. But it wont happen on Obama's watch. We might finally start getting some trains however, and some electric cars.

[DuganS1]

Nationalization of the oil industry in other countries has turned out to be a complete disaster. In the case of both Venezuela and Iran it has resulted in a massive decrease in production and much less investment resulting in a decayed and dying industry infrastructure. If this happened in the US, it would simply result in the same, as well as higher prices, less jobs, and a big drop in the stock market and everyone's 401K and pension value.

[larry278]

What oil industry? Do you mean the promoters who are trying to sell gasahol or biodiesel technology, oil shale technology, coal to distilate technology or the scrap dealers who are 'harvesting' drilling equipment at sites that have been pumped dry? The abandoned drilling equipment could be rebuilt to be sold over seas or cut up for scrap for Asian steel mills. There is no US oil industry save refiners who buy foreign oil. There isn't going to be a remake of Clark Gable's "Boomtown" unless it's set in Russia. Russia has vast experience in making flicks. Who will be Russia's Clark Gable or will "Boomtown" be a Bollyhood production?
If gasohol or biodiesel technology can be made to work, will the small refiners be bought up & consolodated by a JDR operator.

[DuganS1]

I've never understood why so many folks and the media have painted the oil industry as "evil." Why is making money on oil evil while making so much money on Windows, softward, some semiconductors, high end retail, etc good? US oil companies now days are only a very small part of the global oil industry and they have little control over prices. Believe it or not, large integrated oil companies like Exxon, Chevron, and Conoco Phillips prefer a lower oil prices because they tend to lose money on their refining and retail gas operations with high oil prices. About taxes, these companies pay an absolutely huge amount of money, and any creative accounting they do is similar to what hundreds of other companies do (and in a variety of other industries). As far as alternative energy, large amounts of money in already being invested, contrary what the media leads us to believe. But oil companies, however, need not or perhaps should not be investing in alternative energy; it's simply not their business. What does drilling for oil, shipping oil, refining oii. transporting oil, and selling gas at retail gas stations have to do with windpowe or solar power, for example? We need new companies to work on developing these technologies, and they already have been and have been doing a very good job at it.

[Craig]

You are right. Oil companies have vettically integrated the whole transportation sector. Consumers have no choice other than which company to buy from (Exxon or Shell). The barriers to entry are very high and strong. That's why the federal government needs to break up this monopoly by supporting alternatives to oil. Consumers (taxpayers) are not well served until the government steps in and protects taxpayers from this predatory industry.

[vippy]

Monopolies were forbidden once, and then who took off the regulation that it is okay now.
Our government I suspect. So why not enact the old laws again, they worked, everybody
was happy until they threatened the consumer with gas shortage, or the electricty
blackout in California. Deregulation was bad. Nowadays the only way corporations make money if they buy up the competition. Soon we will have only one in each sector.

[DuganS1]

There isn't anything even close to a monopoly in the oil drilling-oil producting-oil refining-retail gasoline business. There are dozens of companies in each of those businesses just in the US.

[RoloTomassi]

"What does drilling for oil, shipping oil, refining oii. transporting oil, and selling gas at retail gas stations have to do with windpowe or solar power, for example?"

Attaboy, keep thinking inside the box you've been in all your life...the oil companies do appreciate it....

It's not what they have to do with each other, but how they contrast in relation to our global warming problem...but wait, I bet you don't buy that "liberal nonsense" either, do ya?

So let's just keep on drilling and burning that oil without any consideration to the effects, and if the alternatives happen to eventually get a foothold in the energy market, then so be it; in Amurika, we have a free market, and keeping a free market--free to drive this country right into the ground--is all that matters, right DuganS1?

[DuganS1]

There are many many companies in the alternative energy business right now, and most have been doing a much better job in their businesses than the integrated oil companies could do. Let's let the solar companies deal with solar, not the oil companies; and let the wind companies deal with wind, not the oil companies. As for global warming, switching from fossil fuels to these alternative energies would do almost nothing to mitigate the warming of the earth. The earth is still cool relative to how warm it's been on average over the past countless 1000s of years, and to stop burning some fossile fuels is not going to stop the extent at which the earth is warming any more than taking a drop of water out of a large bucket.

[HeevenSteven]

Relative to our total investment in energy production alternatives are a tiny tiny fraction, and they need tax breaks to continue to grow. Targeted tax breaks to encourage investment in beneficial technology are not new. Oil and Nuclear have had more than their share. Those breaks are about to expire and the votes to renew them are being blocked by Republicans and guess who -- BIG OIL. and BIG COAL.