Posted on 07/02/2008 3:42:34 AM PDT by VU4G10
Bill Phillips spent nearly 50 years in the US oil and gas industry; most of his career was with the Phillips Petroleum Company. Bill is a descendant of Frank Phillips. Frank Phillips, along with his brother Lee Eldas (L.E.) Phillips, Sr., founded the original Phillips Petroleum Company in 1917 in Bartlesville, OK. Do you remember Phillips 66 gas stations? Phillips Petroleum Company merged with Conoco, Inc. in 2002 to form the current ConocoPhillips oil company.
So, when Bill talks about oil and gas issues, I tend to listen - very closely. I think that you will find Bill's thoughts and facts very revealing, very compelling and very difficult to argue with.
As you prepare to cast your crucial ballots this Fall, please think long and hard about the far-reaching, cumulative effects of the US political philosophies, policies and legislation that have contributed to the current and future US oil supply situation.
May 28, 2008
"Big Oil" Did you know that the United States does NOT have any big oil companies. It's true: the largest American oil company, Exxon Mobil, is only the 14th largest in the world, and is dwarfed by the really big oil companies--all owned by foreign governments or government-sponsored monopolies--that dominate the world's oil supply. This graph below [graph will not forward] tells the story; you can barely see the American oil companies as minor players on the right side of the chart in gray. The chart was presented to the House committee last week by Chevron.
With 94% of the world's oil supply locked up by foreign governments, most of which are hostile to the United States , the relatively puny American oil companies do not have access to enough crude oil to significantly affect the market and help bring prices down. Thus, ExxonMobil, a "small" oil company, buys 90% of the crude oil that it refines for the U.S. market from the big players, i.e, mostly-hostile foreign governments. The price at the U.S. pump is rising because the price the big oil companies charge ExxonMobil and the other small American companies for crude oil is going up as the value of the American dollar goes down. They will eventually bleed this country into printing even more money and we will go into runway inflation once again as we did under the Carter Democratic reign.
This is obviously a tough situation for the American consumer. The irony is that it doesn't have to be that way. The United States --unlike, say, France --actually has vast petroleum reserves. It would be possible for American oil companies to develop those reserves, play a far bigger role in international markets, and deliver gas at the pump to American consumers at a much lower price, while creating many thousands of jobs for Americans. This would be infinitely preferable to shipping endless billions of dollars to Saudi Arabia , Russia and Venezuela to be used in propping up their economies.
So, why doesn't it happen? Because the Democrat Party--aided, sadly, by a handful of Republicans--deliberately keeps gas prices high and our domestic oil companies small by putting most of our reserves off limits to development. China is now drilling in the Caribbean, off Cuba but our own companies are barred by law from developing large oil fields off the coasts of Florida and California . Enormous oil-shale deposits in the Rocky Mountain states could go a long way toward supplying American consumers' needs, but the Democratic Congress won't allow those resources to be developed. ANWR contains vast petroleum reserves, but we don't know how vast, because Congress, not wanting the American people to know how badly its policies are hurting our economy, has made it illegal to explore and map those reserves, let alone develop them.
In short, all Americans are paying a terrible price for the Democratic Party's perverse energy policies. I own some small interests in tiny, 4 barrel-per-day oil wells in Wyoming . We have 14 agencies that have iron-hand jurisdiction over us. If we drop any oil on the ground when the refinery truck comes to pick up oil from our holding tanks, we are fined. Yet down the road the state will spray thousands of gallons of used oil on a dirt road to control dirt. When it rains, that oil runs into rivers and creeks. Yet a cup of oil on the ground at our wellhead is a $50,000 EPA fine plus additional fines from state regulating agencies. They treat oil as if it were plutonium that has the potential to leak into the environment. We are fined if our dirt burms are not high enough around a holding tank, yet the truck that picks up our oil runs down the road at 60 mph with no burm around it. People wonder why there is no more exploration in this country. It's because of the regulators; people who have lived their whole lives doing nothing but imposing fines on small operators like us for doing mostly nothing.
So, America enjoy your $4.00 per gallon gasoline. Your dollar is now worth 0.62 Euro-Cents. The lack of American production of GNP, the massive trade deficit (as labor markets have moved overseas to fight insanely high union imposed labor costs in America ) and the run away printing of money (backed by nothing of value here in America ) has caused the dollar to become more worthless on the international market. And that's where our oil comes from. It's paid for with dollars that become more worthless everyday. If we had just kept par with the Euro we'd be paying $62 dollars per barrel for oil (42 gallons) or about $1.50 instead of $2.50 a gallon for crude oil.
What the US government also does not tell you is that it is the leaseholder and royalty recipient of most oil production and receives 25% of the gross oil sales before we pay for electricity to lift the oil, propane to keep the oil-water separators from freezing in the winters. We pay a pumper to visit each well everyday plus we have equipment failures all the time. We pay for that out of our 75% of gross sales. The government does not share in any expenses to run any production well. So, if the Big Oil Companies are making record profits, then so is the federal government from it's 25% tax on every molecule of oil sold to a refinery in this country. Why isn't the government on the stand for "Record" profits? What you don't see is this 25% of the sales price of crude oil being siphoned away by the government. That money plus the road taxes, state taxes, etc. amounts to over $1 per gallon of gasoline you are buying while the governments only admit to about 50 cents per gallon.
To all you Democrats, when you go vote for your candidate, a blazing liberal like Barrack Hussein Obama or Hillary Clinton, just keep in mind that their liberal spending habits will further decrease the value of the American dollar on the world market and your gasoline costs will hike even higher. As they introduce more give-away programs, raise taxes on everyone to pay people not to produce or work, your dollar will continue to dwindle on the world market and you will be paying $10.00 per gallon at the next election. Cheap hydrocarbon fuel is all over. Enjoy! Enjoy the fruits of your decision to elect these folks when you are there in that voting booth and you stab your pin through a Democrat's name.
William "Bill" Phillips
Wow what an Eye opener..
Was this the guy that called on Sean Hanity yesterday? He hit the nail on the head with this.
Dead on - the MSM will never report it.
Where is the “full page add” in every paper in the US?
BTTT
BTTT
Good question. I wonder if FReepers could get together enough money to put this article in USA Today as an ad? I wouldn't mind contributing to an effort like that.
Carolyn
If you like $5/gal, Thank Congress. If you want $10, Vote Obama.
Pray for W and Our Troops
Ping.
Part of the problem is getting a publication to accept the ad. Most liberal MSM outlets simply refuse to run an ad that is not in line with their philosophy. And there's not a thing you can do to make them. You can try having people stop buying their publication but even that's hard to do when you can't advertising time or space to spread the word.
There are just so many things at stake in this election. Probably more than at any time in my lifetime. Energy, inflation, government regulation, national security, the WOT, the list goes on and on and on.
I don't know the answer, but I do think I know what the results will be if Obama and a Democratic congress are running things.
While my hat is off to Dubya for what he's gotten done I feel he deserves a good deal of the responsibility for what's happened to the Republican party, and conservatives, since the days of his sky-high approval ratings. I would liken it to being on a trip in the family car. Dad stops every 50 or 100 miles to check the tire pressure, oil, windshield washer fluid levels, transmission fluid, brake fluid, etc., but never fills the tank. At some point the family is going to be sitting by the road in an excellently maintained, but gassless, vehicle.
As much as I salute him for Roberts and Alito, not to mention six plus years of freedom from terrorists attacks, there's a lot he seems to have paid no attention to whatsoever. And some of those issues have the potential of bringing our nation to its knees.
I have no faith that John McCain has what it takes to run the kind of campaign that's going to defeat Obama, although I would bet even money Hillary will be the candidate come November, and someone is going to have to step forward and present the choices in a venue outside the campaign proper.
I also know that doom sayers have been predicting the fall of our great nation for 200 plus years, but just because they were wrong in their opinions doesn't protect us from the real threat when it comes along.
They talk about big oil “profits” -
Is the “profit” number before (or after) the taxes on the company’s income?
Does the company’s expenses (before the profit is taxed!) include wages (and the taxes on those wages like 14% social security, 5% medicare, and 5 percent state taxes?)
I’m speechless. What an article.
Thanks for posting
Do you have a link to where you got this?
I wanted to post it else where...
And this is exactly why some of the marxistliberalsocialist’s in both houses want to take over control of the oil/gas companies in this country.
The list left off the US government as owner of the oil off our coasts, in ANWR, etc. At least these other governments are doing all in their power to keep energy at a reasonable cost to their populace, while our rat-controlled scum are doing all they can to raise costs for the US public.
bttt
Add State-owned oil such as Alaska. Royalties are not huge, 25%, not in the league with OPEC style ownership, where the oil company is paid a very small royalty, kind of a reverse of the American style.
2008 Proposed North Slope Areawide Oil and Gas Lease Sale
Chapter Eight: Bidding Method and Lease Terms
http://www.dog.dnr.state.ak.us/oil/products/publications/northslope/nsaw2008/NS2008%20ch%208.pdf
But don't forget the taxes, they will push up what is paid to more in line with your number. And after the oil companies agree to the lease terms, the legislature may once again raise the percentage, and make it retroactive, again.
Brilliant analysis!
This is worth sending to even libs, but certainly to all moderates.
Thanks for posting this chart!
Don’t forget about the royalties being paid to the Inupiat Corporations in North and Central Alaska. They get contract preference in regards to production/exploration.
Like Bill Phillips, I am also from Bartlesville, OK, (the home of Phillips 66), am also a descendant of the oil and gas industry (my second cousin is currently the CEO of an oil and gas company with 5000 employees), and am also heavily engaged in politics (I’m a Republican National Delegate for 2008).
I noticed that in BIll Phillips’ letter regarding oil prices and the Presidential election, Bill demonized Obama, but also never trumpeted McCain. I agree completely. With my background, I strongly share Bill Phillips’ concerns and endorse Bob Barr for President of the United States.
Oil is expensive for 4 reasons.
1. Oil Supply
2. OIl Demand
3. Federal Reserve
4. Fear Factor (Iran)
1. Oil Supply - Bob Barr allows us to set up the camera and ask questions any time. Barr is not just another talking head that has to read from a teleprompter. Here is a video of Bob Barr reviewing McCain and Obama’s Energy Policies & ANWR.
http://youtube.com/watch?v=c6fFRN8MrmQ
2. OIl Demand - China and India’s economic growth is significantly increasing the global demand for oil. Reducing demand by curbing economic growth would be a horrible solution. Reducing demand with technology (alternative fuel, etc) would help. But government does not have the money for research. We’re broke! So the best way to create demand for local energy would be to stop supplementing imports with overseas military.
Bob Barr will bring home the military immediately, and not just from Iraq, but also Afghanistan, Japan, South Korea, Germany, and the rest of Europe; that’s ground, ships, and air. The United States currently has military bases in 130 countries! Defending our country is not the same as occupying everyone else’s country. With a significantly reduced overseas military, the United States demand for foreign oil would drop, trillions of tax dollars would go back in your pocket, and demand for local alternative sources for energy would rise.
3. Federal Reserve - As mentioned by Bill Phillips, we only perceive the price of oil rises because the value of our dollar constantly drops thanks to the Federal Reserve. The price of oil hasn’t increased relative to gold. This charts compares the price of oil in dollars (blue) and gold (red) for the past 62 years.
http://www.thebinarycircumstance.com/wp-images/gold%20and%20oil.gif
Obama’s largest contributor is Goldman Sachs ($601,000), #3 is JPMorgan ($374,000), and #4 is Citigroup ($371,000). McCain’s largest contributor is Merrill Lynch ($250,000), #2 is Citigroup ($249,000), and #4 is Goldman Sachs ($172,000). Notice a pattern? Banks finance the two party system to profit from rising national debt. None of these companies appear on Bob Barr’s contributor list which goes all the way down to $500. Bob Barr is the only candidate with the political freedom to challenge the Federal Reserve.
http://www.youtube.com/watch?v=qWkPMJRDBuo
The Federal Reserve can be a confusing subject. Here is a 45 minute video which clearly explains the history and future goals of the Federal Reserve, who benefits, and who suffers.
http://video.google.com/videoplay?docid=530806696524042736
Bob Barr would get America off the Federal Reserve by legalizing alternative commodity-based currencies and banks; in other words, legalize money! This way, the market would sort out whether or not the dollar is best, without the only alternative being to move money overseas. Here are some (currently illegal?) examples:
www.LibertyDollar.org
http://www.coppercards.com/services/coppercards_bank.htm
4. Fear Factor (Iran) - The House is currently debating Resolution H. Con. Res. 362 to prohibit all imports of petroleum, trucks, vehicles, ships, planes, trains, and cargo for Iran. A strict blockade is certainly an act of war! If any country tried to do that to us, America would start shooting. Iran will do the same. If Iran attacks our ships carrying oil, THE PRICE OF OIL WILL AGAIN DOUBLE.
The argument is that Iran ‘might someday’ want a nuclear weapon. Well no wonder Iran wants one. They are surrounded by nuclear missiles! The United States, Israel, Soviets, Pakistan, China, and India are all there with nukes. In the mean time, Iran has no nukes and has invaded no one. There have been 9 unannounced inspections by the United Nations in Iran this year and there were 0 violations. Our CIA also concludes that Iran hasn’t been working on a nuclear weapon since 2003.
Bob Barr says we should take a deep breath before precipitating World War 3 with a blockade. But McCain and Obama support economic sanctions on Iran and also both support the option of pre-emtive nuclear first strikes!
What the market money fears is this ultimate October election surprise:
1. US creates economic sanctions against Iran.
2. Iran responds by attacking our ships with oil.
3. The US responds with nuclear weapons.
4. Perpetual war is financed by loans from private banks.
5. Government policy is irrelevant as debt begins to spiral upon itself.
6. The private banking cartel wins.
Now that we are all depressed, let me state that long term, I’m very optimistic. Truth can win out. Solutions to our problems are really quite easy if we can find the courage to vote against the Republican / Democrat status quo (the military-industrial-complex and the banking cartel). And we have the internet to help each other stay informed. Bob Barr is currently polling at 6%. If we can get that up to 10% by September, Barr will be included in national debates where he can really impact public opinion.
Campaign for Liberty!
Alan Smith
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