The Absurd Report

Today, world oil reserves are 80 percent owned by the national oil companies of foreign governments, many formed during the past 30 years. Only 6 percent of world-wide oil reserves are now held by investor-owned oil companies.

Faced with such competition, the investor-owned oil companies have scaled up within this new world—principally through mergers and acquisitions—by creating ever larger efficiencies, greater technological and project management prowess, and substantially broader competitive access to capital markets.

Who Owns “Big Oil”? (Holdings of Oil Stocks, 2007)

Contrary to popular belief, and what some politicians might say, America’s oil companies aren’t owned just by a small group of insiders. Only 1.5 percent of industry shares are owned by company executives. The rest is owned by tens of millions of Americans, many of them middle class.

If you’re wondering who owns “Big Oil,” chances are good the answer is “you do.” If you have a mutual fund account, and 55 million U.S. households do, there’s a good chance it invests in oil and natural gas stocks. If you have an IRA or personal retirement account, and 45 million U.S. households do, there’s a good chance it invests in energy stocks.

When politicians talk about taxing “Big Oil” or taking their “record profits,” they should think about who would really be hurt.

The Bottom Line – So when Senator Chuck Schumer talks about passing a “price-gouging bill” and punishing “Big Oil” with a Windfall Profit Tax either he is an economic moron or partisan political hack, my guess is both and even more. He says these things because he believes you and I are idiots.

The only ones who will be punished by his proposals are you and I because Congress has no way of controlling the 80% oil market which is owned by foreign governments.

So when Chuck the Schmuck, who speaks from his anal cavity with his line of B.S., claims that his cure for rising oil prices is the above, just ask these question, how is Congress going to control, OPEC, Hugo Chavez’s oil in Venezuela, Russia and the balance of the other 80% owned by foreign governments.

And is who responsible for vetoing drilling in ANWR in 1994? Bill Clinton and the Democrats.

And who is responsible for not building new refineries? Our Liberal Democratic Congress

And who is responsible for not allowing nuclear energy? Our Liberal Democratic Congress

And how many new barrels of oil will his plan supply to America? NOT ONE DROP!

SideBear: This is absolutely criminal what is going on today in Washington and it is our fault for putting these totally incompetent people into office because you get the exact government you voted for.

This current Congress should be held criminally liable for contempt and malfeasances of duty for their actions and the damage they are doing to this country.

Ten Simple Truths about Oil By Alan Caruba

Having written about the energy industry and issues now for a long time, I hope I can be forgiven for being enraged by the comments by Sen. Charles Schumer (D-NY) in response to President Bush’s press conference Tuesday morning. There is simply no way to describe them other than false.

The Democrat Party has long made “Big Oil” their favorite punching bag, confident that the public has no idea what influences the price and supply of oil. Saying anything favorable to Big Oil is immediately deemed evidence that one is in their pay and whatever facts are offered are therefore invalid.

There are, however, some simple truths about Big Oil that cannot and should not be ignored. To do so leaves everyone at the mercy of energy policies that have created the situation in which the United States finds itself today.

Fact #1. The combined ownership of oil reserves by the independent, investor-owned oil companies such as ExxonMobil, Conoco-Phillips, BP, Chevron and others is barely 4% of the total known oil reserves in the world. By itself, ExxonMobil’s share is 1.08%.

Fact #2. Oil is a global commodity sold on mercantile exchanges for whatever price it can command. Speculation in oil prices is the primary reason they have been driven to utterly insane costs per barrel. It has nothing to do with actual supply and demand.

Fact #3. No nation on Earth is or can be “energy independent.” The geopolitics of oil is complex, but as nations such as China and India have seen their economies grow, their need for oil grows with it and thus they compete with long established industrialized nations for existing oil supplies. This competition has an impact on prices.

Fact #4. The OPEC nations, those in the Middle East and including Venezuela, control 77% of the world’s known oil reserves. Like Russia and Mexico, where the oil industry is controlled by the state, it is generally poorly managed. Several Big Oil companies that were induced to undertake exploration and development in Russia and Venezuela actually had their assets nationalized or stolen at prices well below their investment and value.

Fact #5. Energy is the master resource. All nations with any hope of growing their economies require it, mostly in the form of electricity, but also for oil’s role in transportation. The failure to have a national long-range energy policy that is based in reality can severely impact energy prices.

Fact #6. The United States has, for years, pursued an energy policy based on environmental myths such as “biofuels” in which corn is turned into ethanol to reduce the import of oil, but it costs as much to produce ethanol as to refine oil and it provides less mileage per gallon, thus negating any reason for this additive. Likewise, suggesting that wind or solar energy can generate anything more than its current 1% of the nation’s electricity needs ignores their unreliability and the fact they are heavily subsidized, a form of hidden consumer tax.

Fact #7. It costs billions to explore, discover, extract and transport oil. It takes lots of lead-time as well. The United States Congress has, for decades, refused to permit the extraction of vast oil reserves in ANWR despite the fact it would have little or no impact on the Alaskan wildlife reserve. In addition, Congress has declared 85% percent of the nation’s coastal, offshore areas off-limits to any exploration for oil or natural gas.

Fact #8. The U.S. Environmental Protection Agency, under the mandate of Congress, requires Big Oil to refine oil into some 17 different formulations in the name of clean air. With three grades of gasoline, that means that refiners must produce some 45 different blends. The quality of air in America is excellent, but the cost of gasoline at the pump continues to rise as the result of these mandates.

Fact #9. America imports two-thirds of the oil it uses. All of its transportation runs on oil. The population continues to grow. Failure to encourage the construction of a single new refinery since the 1970s puts a further strain on the ability of Big Oil to provide the nation’s oil and diesel fuel needs.

Fact #10. Democrats continue to demand that Big Oil’s profits be confiscated in some fashion and some of the inducements offered to explore for more oil be ended. Because the costs of exploration, extraction, refining, and transporting of oil represents billions, the actual profit margin of a company like ExxonMobil is about 10%, well below what industries such as pharmaceuticals and banking enjoy.

For these and many other reasons, Americans are being impoverished at the gas pump because Congress has dithered and failed in one of its most important responsibilities.

Source: Family Security Matters

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