Thursday, November 10, 2005

Senate Hearing on Record Oil Profits and High Gas Prices Accomplishes Zilch

Yesterday’s Senate Energy Committee hearings on the obscene cost of a gallon of gas and what appears to be price gauging by oil companies who coincidently are reporting record profits accomplished little. Committee member Washington Senator Maria Cantwell has spend the last few weeks in the run up to the hearings moving from one gas station photo opportunity to another attempting to show her concern about the effects of high gas prices on her working class constituents. But all the posturing somehow didn’t translated into any actionable results or plausible explanations yesterday.

The problem is that her posturing and postulations about her concern over gas prices and the effect upon our economy doesn’t lead to the truth being told by the oil men about how oil companies manipulate the markets to run the price of gas through the roof unabated by government control or concern. Or how the cost of gas relates to record profits they reported.

“Since announcing record quarterly profits last month, oil companies have been under growing pressure to justify such rewards. The five companies Exxon Mobil, Chevron, Conoco-Phillips, BP and Royal Dutch/Shell reported total earnings last quarter of nearly $33 billion.”

I caught part of the hearings yesterday on a CPAN Internet feed and heard Cantwell address the issue later in the afternoon on KIRO Radio’s Dave Ross show. Cantwell was foggy about what she thinks are the root causes of high oil prices and seems even more in the dark about how to explain it in a way that appeared that she was playing tough with the big oil big shots.

Doesn’t look like Cantwell or anyone else can connected the dots on the problem establishing who’s on first or just who's operating the big smoke and mirror machine behind the curtain in the land of Oz that the big oil companies occupy. Cantwell played Dorothy’s part with lots of oh gee whizzes and gush darn its. She spent most of the radio interview rhetorically asking herself why two gas stations across the street from each other in Bellevue, WA could be charging such widely different prices for a gallon of gas.

One of the more interesting aspects of the hearing is that Committee Chairman Ted Stevens of Alaska chose not to put the oil billionaires under oath. Probably because later they be subject to charges of perjury. He also conducted the hearings in such a way as to assure that the blood sucking, baby starving oil magnets were thrown lots of softball questions that they answered with the usual oil company mumble jumble responses that we are accustom to, along the lines, of "it just to complicated for us to explain it here and now, or we can 't possibly give you a YES or NO on that question."

Senator Barbara Boxer of California seemed the feistiest of the lot, at one point saying, "Working people struggle with high gas prices, And your sacrifice, gentlemen, appears to be nothing", stating the obvious. Upon questioning by Cantwell one monkey-suited to the "T" oil executive replied "There are no easy yes-or-no answers in this business."

That it, hearing over let’s all go home now that we got to the bottom of that!

There's little hope the high gas prices/record oil profits mystery will get solved until a Democrat controlled House or Senate regains the Congress and the power to really investigate the issue and put the oil company good old boy’s feet to the fire.

The only exception being if price gauging or oil profits become such a political liability to Republicans that it jeopardizes their chance to retain control of congress in November 2006. Then the oil companies will probably find a way to take the pressure off the GOP by stabilizing or reducing the price per gallon in the run up to the 2006 election.

1 comment:

  1. given price-gouging and excessive profit-taking, how much, though, do you think the price of gas would be lower were we to ferret out these abuses and disband them? and would this make a significant difference in our lives?

    difficult to say. the only part of the price of gas we can be certain of are the taxes (right now, $.50-$.75/gallon depending on your jurisdiction). the rest of the price--production, distribution, marketing, profit-taking--we can't trust because it is filtered through the twisted accounting of this small clique of oil companies. so maybe the real price would be as low as the early-90s $1.00/gallon. maybe it should be where it is at now...about $2.50/gallon. maybe it should be higher (if we started including externalities like our military presence in the gulf or repercussions of environmental/health damage).

    i'm not offering any method for answering this question. but my suspicion is that the price of gas would be pretty darn close to where it is now, with or without any nefarious activity by the oil companies. and that, in any case, these fluctuations in price cause great aggrevation to the consumer, but do little real damage to how people live their lives.

    notoriously the saudis play a game in which they want oil production to get neither too high nor too low. too high, and it kills their profits. too low, and people begin seeking alternatives to their products. well, US oil companies are part of the same market. they want to take as much profit as they can without killing their market. that is why the price of gas, to my way of thinking, is still incredibly low. they need to keep you addicted to it. gasoline, a non-renewable resource, which is a highly processed product of crude oil, which--in turn--needs to be pumped out of the ground, and shipped half-way across the world to its markets....is about $2.50/gallon. milk, which is renewable, can be made and processed just about anywhere, and does not require high-technology or intensive infrastructure....is about $3.25/gallon.

    but the oil companies are clearly over-charging us for their product.

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