| FINDING DEAL$ ON GA$OLINE: |
Posted on 06/10/2007 9:49:18 AM PDT by jazusamo
Sunday, June 10, 2007
Peter J. Robertson had no idea what he was walking into Tuesday morning.
The vice chairman of Chevron Corp's board of directors was visiting The Oregonian's editorial board, and I had just filled up at the gas station. Like many Oregonians, I was not a happy. I had just spent $3.29 for a gallon of gas. Admittedly, my TNG Milano 49 only needed a gallon for a week of commuting, but this cheapskate didn't join Scooter Nation to watch Big Oil gobble up my gas savings.
I wanted answers, and I wanted them now. More to the point, I wanted someone to blame.
Enter Chevron's Robertson.
Why, sir, are oil industry bosses taking food out the mouths of babes by manipulating the gas prices and gouging the poor American consumer?
" 'Big Oil' is not so big," Robertson said after pulling out a bar chart showing the national oil companies (sovereign nations and their oil companies) and the international oil companies -- Exxon Mobil, BP, Chevron, etc. The nationals control 95 percent of the world's oil and gas reserves. The international companies control 5 percent.
Iran controls almost 300 billion barrels, Saudi Arabia controls almost as much, and Qatar 160 billion barrels. Chevron controls less than 11.6 billion. Chevron and other oil companies are big companies, but they're small in relation to the global oil market. They're simply in no position to rig oil prices on the world market -- a significant reality because the price of oil accounts for 53 percent of the price of gasoline in the United States. Refining and marketing costs account for 33 percent and, across the country, taxes 15 percent.
Ah, but isn't the oil industry holding back supply?
Actually, he noted, U.S. refineries operate at close to capacity, refining gas at record levels. Indeed, the United States has more than 200,000 barrels a day more capacity today than it did last year.
So, you're sitting there saying the industry is not price fixing? What about all those government investigations?
Yes, there are have been more than 30 since 1973. Not one has concluded the industry manipulated prices.
Why, then, are gas prices so high?
Higher worldwide demand than anyone anticipated, thanks to economic growth in China, India and the United States. Robertson also said the industry is now operating in difficult political environments abroad (Nigeria, Venezuela) while production is more difficult here at home (less and less high-quality material available).
"It's very difficult," he said, "to find places in the United States where you can drill. 'Don't drill here, and we want the cheapest gas in the world' -- that's not possible."
Yeah, but what about Big Oil's obscene profits?
Robertson pulls out another chart. It shows industry by industry earnings for 2006. The oil and natural gas industry made 9.5 cents for each dollar in sales. The computers and electronics made 13.4 cents, the beverage and tobacco industry 17.2 cents and pharmaceuticals and medicine made 21.6 cents.
Again with the charts. Well, why not put those profits back in research and development?
Chevron has. It's posted earnings of $53 billion during the past five years. The amount Chevron has invested in the same period? $53 billion? In 2007, Robertson's quick to note, his company will invest almost $20 billion.
"We're not wheeling cash out the back door in wheelbarrows," he said.
Fine, but you're not investing in alternative fuels, are you?
Actually, Chevron is. "We're the largest geothermal company in the world," Robertson said. He also mentioned Chevron had just cut the ribbon on a new biodiesel plant in Texas that uses soybeans. Chevron has research projects in making gasoline from agricultural waste and wood pulp.
Alternative fuels are the answer, aren't they?
Robertson isn't ready to go that far. They're part of the answer. "One of the problems with the energy business is that people don't appreciate the scale (of production and delivery), so the scale of change is very large, " he said. "The traditional sources are still going to be very important."
I suppose you think the answer is the free market?
"What higher prices are telling us," Robertson said, "is that we need to invest."
What else can we do?
"I think this is a leadership issue," Robertson said. "I think leaders need to be honest with the American people about why prices are higher, not blame a bunch of people for doing business. . . . Nobody's talking about maintaining our oil and gas production. We can't dismiss this issue. As long as our leaders spend their time looking to blame, they're not addressing the issue, which is a complex set of energy issues."
Yeah, well, but, but . . . oh, never mind.
Thanks, SAJ. I don’t know where I got the idea it was higher.
| FINDING DEAL$ ON GA$OLINE: |
Several FReepers have a graphic of state motor fuel tax rates that gets posted fr/time to time. Next time I see it, I’ll send it off to you
It has to do with the exchange rate. It now takes more dollars to buy the same goods from foreign sources. This added cost is reflected at the pump.
Let's take Shell (Dutch owned) as an example. They buy oil from the Saudi's in Euro's, they sell the oil to the US in dollars.
In 2000, one euro was worth about $0.85, now that same euro costs about $1.30. The price to Shell remains the same, but in terms of the US 'cost' the cost has gone up considerably.
Not near so much as "big taxes" are. The truth is, politicians are just putting on a show pretending to care about fuel prices. The amount of money flowing into government coffers from taxes is even beyond a democrats wet dreams. But you won't hear politicians talk about rolling back taxes so to cap revenues. A proper sliding tax formula based on lets say a base price of $1 a gallon, should see tax percentages decrease as gas prices rize so as to keep a cap on tax revenues.
This would drastically lessen the impact of flutuating barrel prices on the consumer AND more importantly, our entire economy.
Wishfull thinking however. The government cares about niether, only about how much more money they can spend, pack pork onto bills which enrich their political donators.
What is the reference to "Scooter" in that headline? (Apparently not "Scooter" Libby, which is what I was thinking when I first saw it.)
Only problem. Isn’t the Oil market traded in dollars? Aren’t you trading thumb tacks for well.... different colored thumb tacks? I understand how the market works if, for example, I go with a bunch of dollars to say England. I have to convert them to Pounds at a fixed exchange rate. Do not get how a comity traded in dollars is effected.
I think it’s a referrence to his “my TNG Milano 49” analogy he used in the piece.
But how does that effect the US Market? We only get about 18% of our Oil from Saudi Arabia. We get the bulk of our oil either from ourselves or from Canada and Mexico.
Since neither the Canadian dollar nor the Peso is doing so well as the Euro against the dollar, that means the Saudi oil is pricey but the bulk of of our oil is not as pricey. In fact, it should make the domestic and near domestic source considerable cheaper then the imported oil. If anything, it should be pricing the Saudi Oil off the market.
At $0.184 dollars per gallon and 375 million gallons per day consumed (or purchased) the government take is about 69 million per day or over 25 billion per year.
Our dollar is weak, so it costs us more to buy the same goods. The people that benefit from this though is the US tourist industry. Look at it this way:
A hotel in NYC charges $175.00 a night. In 2000 that hotel cost a European $230.00 euro's to stay there. Today that same hotel costs (assume room rate as constant) 135.00 euro.
That is how weak the dollar is today.
THAT would have an effect on the USD eventually. But it will also be damaging to the Europeon economy, making their goods too expensive to import. So it works both ways. A weak USD would be more competitive and benefit exporters of American goods, while it hurts importers of Europeon goods, reduces our buying power. An example of the pros and cons can be seen in the Canadian dollar market right now, where the canuck buck is near par with the USD. It's damaging to exporters of Canadian goods into the USA, because they aren't as competitive with American manufacurers as they were when the canuk buck was around 70 cents. On the otherhand, they are making a killing on oil and gas.
That seems like an awfully low number. Another thing is, the government dips into the oil well many times before pump taxes are taken. They take a cut at the well, then sip from the bucket as it's carried to it's final destination, the holding tanks at the gas station. Those are hidden taxes, which the final pump tax taxes again. Now they want to add a carbon tax along that route as well.
You are right though, there are many other hidden taxes that the calculation I did does not account for.
It’s all passed right back to the consumer who buys that gallon of gas. Much more tax is taken than the final 18 cents at the pump.
“Scooter Nation” is pertty much a chick thing (Dont know how gay it is) see:
http://www.denverpost.com/entertainment/ci_4113101
Popular resurgence sees
Wasps (Vespa)
http://www.vespausa.com/products/index.cfm
with classics being rebuilt for major $
And what this cat rides
http://www.tngscooters.com/default.aspx
--now, that looks so....well, you know..
gay
The net effect of the weak dollar is a higher price at the pump. Yes, there are many other factors, but the dollars fluctuation is not "irrelevant" in a world traded commodity.
LOL! I think you’re right, it went right over my head. I think he dinged the gay crowd.
That's a little over a gallon per person. Now everyone doen't drive cars, but those that do, lets say 25% of the population, even less, would have a very hard time getting by on 3 gallons of gas per day on a normal work day.
Heck, I've burned a gallon in the lawnmower already today, and I'm only 1/4 ways done. I'm going to have to drive to town and fill up my gas can, which will burn another 5 gallons just driving there and back. (60 miles) Maybe I'll just siphon some out of the tank instead... But, I'm low on beer. Ahh the dilemma's life tosses at me...
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