Re: Gas "crisis" facts v. fiction

On Mon, 15 May 2006 15:03:45 GMT, "Taylor" <123@xxxxxxx> wrote:

Pumping Fact & Fiction
Deconstructing hysteria.

By Max Schulz

The run-up in gasoline prices to $3 per gallon has coupled with ExxonMobil's
quarterly profit announcement to touch off a nationwide frenzy. Nowhere has
the reaction been more hysterical than on Capitol Hill and among the news
media. Calls for punitive taxation, prosecution of everyone from oil
executives to filling station owners, and even the breakup of industry
titans have dominated the headlines. Rooted in economic misinformation,
these calls by politicians and the press have been like pouring, well,
gasoline on a fire.



In an effort to dampen the flames, it would help to look a little closer at
the major myths dominating the gasoline price debate and to separate fact
from fiction.



Fiction: The major oil companies and their profits are the cause of high
gasoline prices The headline in the Dayton Daily News after ExxonMobil
posted first-quarter profits of $8.4 billion perfectly captures the tenor of
most coverage of this issue: "Gas Prices=Exxon Profits."



Fact: This has it somewhat backward. Profitable companies like Exxon and
Chevron are not the reason for high prices; they are the beneficiary of high
prices. Oil prices, that is. Gasoline prices have spiked because the price
of crude oil on the world market has spiked. It averaged $28 per barrel in
2003. Today it is near $75 per barrel. That price is dictated largely by
supply and demand. Demand is growing in China, India, and the U.S. Global
production is having a hard time keeping up.



The oil companies in today's crosshairs are in no position to dictate world
oil prices. Compared to government-owned oil companies like Saudi Aramco,
"Big Oil" are small players. As the American Petroleum Institute's Red
Caveney said, "Nearly 80 percent of the world's reserves are owned by these
national oil companies and a mere 6 percent are controlled by investor-owned
companies." Exxon and Chevron are big. But the industry in which they
operate is truly gargantuan.



Fiction: The Bush administration is responsible for high gasoline prices.
"We have two oilmen in the White House," said House Minority Leader Nancy
Pelosi. "The logical follow-up from that is $3-a-gallon gasoline. There is
no accident. It is a cause and effect."



Fact: Yes, gasoline prices have increased during the Bush presidency, but
not because of it. The rise is a function of climbing global oil prices.
Economic growth in the developing world is not the president's (nor anyone's)
fault; indeed, it is a positive thing. Bush may be "to blame" in just one
way: U.S. demand for oil was dampened by a recession he inherited. The
economy is doing better now under his watch. Ergo, demand is up. So sue him.



Fiction: Oil-industry profits are out of line. Bill O'Reilly calls them
"unconscionable." Sen. Carl Levin deems them "absolutely obscene."



Fact: Oil majors' profits are indeed huge, but that is because the global
oil industry is so giant. Exxon's $8.4 billion profits came on $89 billion
in revenue. A profit margin of less than 10 percent is middle-of-the-pack
for major industries. Banks make an average of 18 cents per dollar of sales.



What is obscene might be federal and state governments' take in taxes.
According to the Tax Foundation, since 1977 governments have collected "more
than $1.34 trillion, after adjusting for inflation, in gasoline tax
revenues-more than twice the amount of domestic profits earned by major U.S.
oil companies during the same period."



Fiction: Big Oil was gifted with billions in dollars in undeserved tax
breaks in the 2005 Energy Policy Act.



Fact: As the chief executives of the major oil companies explained during
their congressional inquisition last fall, they never lobbied for the tax
breaks in the bill and didn't want them. It turns out that the breaks were
designed to help small, independent petroleum producers and wildcatters-in
other words, "Little Oil."



Fiction: ANWR isn't worth it. According to House Minority Whip Steny Hoyer,
drilling in ANWR "will produce no oil for a decade and do nothing to end our
addiction to oil."



Fact: Yes, it may take a decade for ANWR oil production to get going. But
keep in mind that President Clinton's veto of ANWR in 1995 was upheld thanks
to Hoyer and his colleagues. Had that veto been overridden, we could now be
seeing an additional one million barrels of oil a day flow into a world
market with virtually no excess capacity. Those million barrels would help
ease prices.


http://article.nationalreview.com/?q=NDEyNTUxMTEzMGMwNGEyMGM5NWIxYTA2MWI0ZGM0MmQ=

I don't suppose you see any correlation between the high price
of oil and the fake war in Iraq that slowed their production down.
I hear a lot of bull*** about "We're busy making fuel oil and
heating oil not gasolene" but when you crack oil out, gasolene is a
byproduct that has to be stored or sold or as they did in the old days
just burn it off.
So what happened to the gasolene they got craking the oil ?

I agree about the whackos opposing the ANWR drilling, they are
finding out the wild life is taking refuge along the pipe line
structure, not driving it out.
.

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