THE BLOG
05/11/2007 11:34 am ET Updated May 25, 2011

Gas Prices At Record Levels and the American Petroleum Institute (API) Serves Up More Gas

The API placed a full page ad in the Washington Post yesterday collegially signed by the "The People of America's Oil and Natural Gas Industry". Included certainly are Occidental Petroleum's CEO Ray Irani with his last year's salary of $500 million plus and Exxon Mobil's ex CEO Lee Raymond cheering from the sidelines while counting his $400 million golden parachute. Just guys like the rest of us.

The purpose of the ad was to instruct us all, and especially given the placement of the ad, to give our good folk within the Washington Beltway talking points when they go back to their districts or states and have to confront their constituents. Or, as likely, to rationalize some other earmark or boondoggle for the oil industry.

The ad informs us by asking the question, "where does your gas dollar go?" and then answers by advising 56% toward crude oil, 26% for refining, distribution and service stations and 18% for taxes. And then to calm our concerns, continues with a straight face "In 2006 the industry earned 9.5 cents on each dollar of sales". As I tried to explain in my previous posts "Oil and the Eclipse of the American Century" 4.16.07, and "Deception From America's Oil and Natural Gas Industry" 8.27.2006, when a similar ad was launched (with statistics then at 54%, 30%,16% and Profits 8.5% respectively) that the claims in the ad was as consummately misleading then, as it is now.

As pointed out in those posts the truth lies in the details. Our oil companies are integrated, that is they produce crude oil and crude oil equivalents which they then transfer to their refining and chemical operations. What they earn on crude oil is rarely broken out. In many cases at today's prices the margins on their crude oil sale can range from 200 t0 300 percent.

But that's OK, according to their instruction. You see crude oil is categorized as "the global price of oil", meaning we should understand that the oil companies are innocents, having little or no influence over its skyrocketing levels. Picturing themselves more as victims of 'market forces' rather than the beneficiaries of a manipulated market (think OPEC and know that only this week Marathon Oil was added to the list of companies under investigation by the CFTC for alleged crude oil price manipulation), they have been the leading cheerleaders of this fiction and in the forefront of brainwashing consumers, and governments around the world.

We should understand that as long nothing is done to counter this presumption they will continue to rapaciously flourish at our expense. And the American Century will continue in its eclipse.