Thread: The Great Oil Robbery
05-20-2007, 05:02 PM #1
The Great Oil Robbery
If you've been following it like I have you should be asking why is gasoline and oil prices are no longer tied together. I am all for capitalism but come on, massive profits and no break for the consumer? I guess that's just the american way.
I hope I don't get in trouble for posting the entire store. Let me know what you think.
In case you're wondering why crude oil prices are down from last year, hanging around at about $60 a barrel, while gasoline prices have soared past $3.10/gallon nationwide, just check out the latest profit reports from the oil companies. They are at record levels.
The answer for this seeming contradiction is simple: Americans are being robbed blind by the oil industry.
Sure, the oil companies, and their PR and lobbying agency, the American Petroleum Institute, will give you all kinds of reasons for higher gasoline prices at a time of falling crude prices: problems at two refineries in Texas and Oklahoma, rising demand or whatever. But the real answer is that there is simply no competitive market in this industry.
As Tim Hamilton, a researcher and petroleum industry consultant with the Foundation for Taxpayer and Consumer Rights, observes, the oil companies all store their crude oil and refined gasoline in the same tanks, and all know exactly how much inventory each other company has, so they don't have to meet and collude on pricing in order to reap the huge rewards of deliberate supply constraints.
Says Hamilton, "Years ago, you had companies that would try to guess when the other companies were going to have supply shortfalls of gasoline in the summer. They'd ramp up their own gasoline refining and then supply the market at a lower price and eat their competitors' lunches, the same way General Motors would do if Ford had a problem on its assembly line. But today, no oil company would do that. They all benefit by keeping the supplies tight."
Hamilton says that the oil industry has in practice conspired to limit refining capacity, so that companies can keep pushing up the price of gas artificially-only they've done this without ever having to meet in secret and cut a deal, because they all have complete competitive information on each others' inventories, internal pricing, and refinery capacity.
"There's no correlation any longer between crude oil prices and gasoline prices," he insists. "Crude could drop to $10/barrel, and you could still have gasoline go to $4/gallon. All the crude oil price does is set a floor on gasoline prices."
As an indication of how much control the oil industry has over retail gasoline prices, Hamilton points to a study he did, looking at the price of gas approaching Election Day. His results are truly disturbing.
The oil industry has been a solid backer of Republicans for many years, giving 80-90 percent of its campaign contributions to GOP candidates-particularly during the two Bush terms. What Hamilton discovered is that this support hasn't just been limited to campaign contributions. In fact, the oil industry appears to have clearly tried to minimize voter anger at Republicans late during the election cycle by pushing prices at the pump down just ahead of the voting.
In the period 2000-2006, Hamilton found that each non-federal election year-2001, 2003 and 2005, gasoline prices didn't decline during the month of October, but each of the election years-2000, 2002, 2004 and 2006-they fell, with the most dramatic drop coming in October 2006-a period when crude oil prices were rising sharply. Each time, gasoline prices rose again quickly right after the election was over.
"This is a set of coincidences you'd be hard-pressed to explain by anything but planning," says Hamilton. (And incidentally, it would be interesting, when Congress gets those Karl Rove emails from the Republican Party and the White House mainframe computer, to see if there are any to the American Petroleum Institute.)
The whole situation makes a joke of Bush proposals for opening up the Alaskan North Slope to more oil exploration, or for Republican calls for an easing up on environmental regulations for new refinery construction. Says Hamilton, "The price of oil produced in Alaska will be set in Saudi Arabia, and any new supply of crude from Alaska won't affect American gasoline prices in the slightest. And as for new refineries, why would any oil company want to spent $1 billon or more to add refinery capacity so they could get less money for the gasoline they're selling? There isn't enough money in the federal treasury to subsidize the building of new refinery capacity in America."
The irony here is that it is higher prices for gasoline that might eventually convince Americans to use less gasoline, and to reduce the production of greenhouse gasses. But where those higher prices in Europe come in the form of taxes, which can then be used to subsidize public transportation or retirement and healthcare programs, in the U.S. the higher prices simply go to the bottom line of the oil companies, and into the pockets of oil company shareholders, leaving public transit, retirement and healthcare programs under funded, and leaving lower-income workers stuck with higher bills to get themselves to and from work in their cars.
Until the public recognizes that the illusion of competition carefully maintained by the oil industry and its backers in the government is just that-an illusion-this astounding rip-off will continue.
05-20-2007, 07:54 PM #2
Damn Bush family....They deserve to ***
05-20-2007, 11:42 PM #3
05-21-2007, 12:16 AM #4
I dont find gas expensive. $5/gallon overseas. Oil companies profit margins are around 10%.
Capatilism at its finest. Until people realize they dont have the right to cheap gas, and they keep paying it, and not cut back on driving and other activities, then its gonna stay high.
If the left would let us build refineries, we could refine more gas, or if theyd let us drill anwr and other useless prohibited areas, wed get more oil.
Or if the .gov wouldnt tax 40 cents a gallon(its not quite that high, its late and i dont feel like lookin it up)
Bottom line is-We have no right to cheap gas. Oil companies have a right to a profit. And we have the right to say enough and cut back
05-21-2007, 04:16 AM #5
Damn bush family? Whoa cowboy!
Remember last year when gas first hit $3.00 a gallon? The Republicans still controlled congress and the Dems screamed and hollered that the Republicans needed to do something. The Republicans were a bunch of limp d!cks. Well guess what? The Democrats are now running Congress, and you are not hearing a peep from their lips. Have you called your congressman to complain? If not, then you have no reason to complain.
05-21-2007, 04:57 AM #6
If you are TRUELY serious about this, then you should buy this book, and get an understanding about how deep the rabbit hole goes.
and YES, I've done the feasibility study on a fast electric powered jetski. It's still too expensive, with an entry cost of around $45,000, not including the ski itself.
05-21-2007, 08:02 AM #7
How are we supposed to cut back on use Pettee? I know I cant. I drive to and from work 50 miles every day. Theres no way on me cutting back on that....And I hardly think the oil companies are only making 10% profit...dont really know, but dont think so. I mean, oil execs are getting $20,000,000/yr in BONUS alone!
05-21-2007, 08:04 AM #8
Bush sucks!...Dad and son. Only thing they did was go overseas to try and control the oil pipelines for their own good....And have thousands of US military killed!
Another good book is Forbidden Truth
05-21-2007, 08:40 AM #9
pette didn't even read the story, he is just spewing talking points he got from the American Petroleum Institution (see graph on right).
10% ... lol,
gas isn't expensive ... lol.
Prices have tripled since 1999. I wonder how much it'll have to raise before he thinks it's expensive.
We'll see another huge spike today because of turmoil in Nigeria and opec is keeping production the same.
05-21-2007, 08:43 AM #10
Bush is still a prick, loser and failure in every sense. But indeed, everyone should be calling, emailing and mailing, reps, senators and media. Just use www.congress.org however who do you think they'll listen to, voters who give them nothing or oil lobbyist that line their pockets with millions of dollars?
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