Ten Truths About Oil

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 recent press conference. 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 seventeen 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.

Alan Caruba writes a weekly column posted on the Internet site of The National Anxiety Center, www.anxietycenter.com. He blogs at http://factsnotfantasy.blogspot.com.

Unless your husband is the guy pulling the rickshaw, I am riding in, I hardly consider him the guy providing me witih public transportation because if your husband left Planet Earth tomorrow, the service would continue.

I appreciate that you state your husband works very hard but what does that have to do with whether or not PT is a good thing or not? A lot of people (my hubby for instance) work their butts off and don’t get lunch (my hubby doesn’t get lunch either), and are stressed and work mega hours (my husband works no less than 60 hours a week).I’m just happy he’s working and we’re not in bad financial shape though that could change in a heartbeat).

I’m not going to thank your husband anymore than I would thank the guy that’s running the toll booth but I am glad there are millions of people doing lots and lots of jobs that keep things running here in the good ol USA.

As for you doing just fine in the snow without a 4 wheel drive, perhaps you don’t have to drive far and you LIKE it but I can assure you that you are probably not in the majority. I am driving 35 mi. one way now and I am not looking forward to those days when my 50 minute commute turns into twice or triple that because of the bozos out there who think they “do just fine in the snow” and drive like maniacs (not you of course).

You sound like an angry soul, I’m afraid. And if your husband hates his job that much, maybe it’s time to rethink that job. Don’t hate the transportation mode just because your husband is being overworked.

Yikes.

Once again, you miss my ENTIRE point. My husband actually LOVES his job (which he has done for almost 31 years) and takes it VERY SERIOUSLY. He DOES (along with an entire group of other people) provide service to everyone who rides the lightrail and views it as an important service and works very hard to make sure it happens for his fellow citizens. If he (or another employee) did not coordinate things to make sure it happens and happens smoothly, it wouldn’t.

As an example, the next time your electricity goes out, think about the person/persons restoring it for you. I lost my power a couple of weeks ago, and I personally THANKED the person (more than once) who came to my home and repaired it. It put a huge smile on his face and he was very appreciative.

I have commuted over 30 miles each way to work also (it’s taken me two hours to get home during a snow storm, and it would take the same if one was taking public transportation as well). That’s because public transportation does not go everywhere, and most people want it that way to keep their neighborhoods safe and quiet – in other words the same. My husband and I believe that public transportation is funded at just about the level where should be for the areas where it is needed, otherwise massive tax increases would be required.

For over 20+ years my husband and I did not even have ONE day off together due to our work schedules – no life, unlike what most Americans have. We have NEVER complained. What other wife would put up with something like this? I finally found a job where we at least have ONE day off together, and now my husband’s new boss wants to force everyone onto rotating shifts every three weeks and, again, we will not have at least ONE day off together. So, the next time someone provides any type of service for you, take a second to think what is necessary for that to happen.

Regarding thanks – like I’ve said so far, to relieve stress and for a little bit of pleasure, my husband likes to enjoy a cigar every so often with other like-minded adults. Your vote to make that illegal in our state (not one single place, not even in PRIVATE CLUBS) where you don’t have to go is not very appreciative of your fellow citizens. It’s pretty pathetic that my husband and other like-minded adults have to go to Vegas in order to do that. Most Ohioans are fed up with others dictating to them what they can and cannot do (within reason, of course), and this has got to stop. I know of lot of Ohioans who feel this way, and I believe it has come to a head. Neither I nor anyone else would deny you taking public transportation if you want to, don’t deny others in our state of what they would like.

I’d like to see lots of options for vehicles but mostly, what I wish would happen is that we’d start building some mass transit systems like in Zurich. I’d love to take a train to work instead of getting stressed out in a 50 minute commute like I have now dealing with the continual summer road construction and the bozos on the road that are so busy texting and punching in numbers that they aren’t looking when they merge onto freeways and so on...

I hope so too. That would take real change. You are a whining spoiled crybaby like many Americans. You are such a progressive Paved Paradise. So smart. We need this type of change. Change everything. If you don't like the way it is, just leave America and go to where my parents came from. Waaaahhhh!!!!!!

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