by John Passacantando
May 21, 2008
A clear window into what happened to our democracy could be seen today as the Senate Judiciary Committee held a hearing, “Exploring the Skyrocketing Price of Oil,” with executives from BP, Shell, Chevron, Conoco Phillips and ExxonMobil. I found it on C-Span. Some of the highlights:
None of the executives could remember how much they make, although most admitted it was in excess on 2 million dollars. They all did their best to look somber about the record high prices of oil and then went on to blame China, OPEC (remember that old boogeyman?) and most importantly, lack of access to new places to drill for oil to help make America energy independent. These guys are paid enormous amounts of money to pretend they care about the pain the public feels when they tighten the screws on us. Congress throws some theatrically tough questions and act concerned, although they don’t pay for the gas for their own limos. You and I do. So its sort of like Broadway except it seems the makeup artists use brooms.
J. Stephen Simon, the Senior VP of ExxonMobil went through a series of arguments showing how dramatically the oil industry margins have been reduced. By the end of his explanation it seemed that ExxonMobil was profitless, although thanks to public records we know that their profits were a record 40 billion dollars last year and are on pace to crush that record this year. He spoke of working together to strengthen American competitiveness, advised us not to worry about the current “upcycle” (that was his euphemism for the sky high gasoline prices) and all the while whining about taxes.
All the executives stated directly or implied that the oil price crisis could be alleviated by giving them access to the last wild places where oil is still to be found in America: the Rocky Mountain Front Range, the Arctic National Wildlife Refuge, and more coastal drilling. If your grandmother had oil in her teeth they’d want those too. The fact is that these sources take years to explore, destroy wild areas permanently and would only reduce the price of oil marginally. But they would add handsomely to the oil companies’ profits. It’s the perfect argument for the oil companies: they want more of the same, record profits, easy access to our lands and waters, continued subsidies of about 40 billion dollars a year for oil and gas (easy to remember as it is the same as ExxonMobil’s 2007 profits – and both are on track to go up in 2008), and blame the lack of access on the environmentalists.
The fact is I am not against oil prices going up. That is what is going to make us use less. If oil prices were being driven up by a federal system that put a cap on the carbon that these and other companies bring into the economy and force them to buy credits to emit permitted amounts, the revenue from the credits would then go back to Americans, all Americans to help offset the higher energy costs – not drive profits higher.
The retiring head of Shell had a fun way to try and downplay the record profits. He mumbled out something about the profits they are reporting being very large in absolute numbers but you have to look at the segments of our business, the upstream something or another, historic age of oilfields, marginal costs…
I started to feel sorry for these guys, I felt less resentful of the 40 billion dollars in subsidies that we give these guys each year who can’t remember how many millions of dollars they are paid. Heck, I felt like running down to the Hill and bringing them flowers. After all, they got some pretty tough questions from the Senators. To make matters worse, a protest kicked in, I could hear the voices in the back of the room while watching on my computer screen the faces of the witnesses as they heard somebody demanding that we separate oil and state Dammed hippies insisting that the politicians stop taking campaign donations from the executives that they are supposed to protect Americans from, yeah, and wreck the whole game.
Pretty nuts… like enough to make you wanna take the bus.