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August 16, 2005

Slick Oil

Jamie Court has a good point here:

What's remarkable is that neither leading Democrats nor Republicans are discussing the oil company profiteering behind the jump at the pump? Maybe that's because both parties are feeding at the same well of campaign contributions and the federal energy bill that gushed from it failed to deal with the cause of the sky high prices.

July financial statements show oil companies making new world record profits on top of last year’s banner world record profits. Exxon Mobil’s second quarter earnings jumped 35 percent over last year, Royal Dutch Shell rose 34%, ConocoPhillips shots up 51%.

Poll after poll has shown that Americans are desperately worried over our oil situation. John Kerry's single best-received line was his acceptance speech swipe against the House of Saud -- the numbers spiked up. Maybe that's why, in fear of attracting supporters, he stopped using it. But there's no reason the Democratic Party shouldn't be hitting hard on this subject, particularly as we struggle to come up with a strong national security message that's more than Republican "me-tooism".

Bush and his party are in the pocket of Big Oil. Hell, before they became the government, they were Big Oil. If Democrats were willing to loudly stake out the energy independence territory and use it as a national security message (less reliance on gulf states), it'd be a step in the right direction. That they're so reticent to do so is even more galling, though, when you see how easy Republicans are making it:

The Bush administration is expected to abandon a proposal to extend fuel economy regulations to include Hummer H2's and other huge sport utility vehicles, auto industry and other officials say.
Larger sport utility vehicles and pickup trucks weighing more than 8,500 pounds when loaded, like many Hummers and Ford Excursions, have been exempt from the [CAFE] regulations. When the system was created, vehicles of that weight were generally used for commercial purposes, but now hundreds of thousands sold each year are intended for family use.

Automakers have had powerful incentives to produce such vehicles because they are exempt from fuel regulations, have had rich profit margins, and many consumers can claim tax breaks for them. The administration had suggested including larger S.U.V.'s in fuel economy regulations in a first wave of proposals in December 2003, but domestic automakers objected that such a move would harm their fragile bottom lines.

Yes, poor domestic automakers, spent the last few decades making bigger and bigger cars and are now too dependent on their most monstrous models to have them classified in the categories where everyone knows they fit. But I'm glad to know the Bushies haven't lost all their compassion and goodwill. They may not care about workers, the poor, the uninsured, or the disadvantaged young, but Leaving No Corporation Behind is, if anything, even dearer to their hearts now than it was when they were elected.

August 16, 2005 in Energy | Permalink


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Maybe that's because both parties are feeding at the same well of campaign contributions

This probably explains why Kerry stopped targeting the House of Saud.

Here's something to think about: Democrats are losing elections not because the GOP owns the media, not because the GOP is highly-disciplined and without concern for ethics or morals, not because the GOP has won the "framing war" or has a better candidate or any of the other reasons that we have for blaming the GOP for our problems. Perhaps we are losing because it isn't enough to the American people that our members of Congress are slightly less corrupt than Tom DeLay. It's hard for our politicians to convince people that they are on the side of the "little guy" when they vote for travesties like the Medicare, Bankruptcy and Energy bills.

Yeah, the GOP is not only voting for this stuff, it's designing it. But everyone in this country already knows that the GOP doesn't care about the "little guy." They just have different reasons for voting these crooks into office; therefore when they act true to (corrupt) form, it's no cause for concern. But the Dems are acting, on a regular basis, counter to their own rhetoric, and the voters just won't buy it.

Posted by: Stephen | Aug 16, 2005 5:10:18 PM

Things that may NOT be attacked:
- Oil and Energy companies
- Drug companies
- Lobbyists
- The Confederacy
- The Bible
- Bush mental state, military service, and performance
- anything Republican
- Profits and Free Enterprise

Posted by: JimPortlandOR | Aug 16, 2005 6:44:35 PM

The Oil Companies spent the 1990 wildly inflating their oil reserves. That is until Royal Dutch Shell got caught and in late 2002 dropped a barely noticed bombshell that its stated reserves were between 30% to half of what they had been telling their stockholders for the last decade. With 30-50+ years of cheap oil sitting in the ground there was no way any Democrat could propose energy conservation. Clinton got his balls kicked in 1994 for a mere $.04 gallon federal gasoline tax. So ease up on the Democrat bashing.

The plot was to prevent the US from imposing European style gas taxes in the 1990 when the price of oil was between $10 to $15 and nobody should have minded. A mere $.50 tax could have funded energy conservation and mass transit. Today would could have our regional TGV trains network linking our major cities at 150+ MPH. Instead we expanded air travel, built more highways, turned more farmland into suburbs, bought SUVs and McMansions. Now many Americans have moved to a 3000+ square foot home in the exurbs with 2 SUVs in the garage and is deep in debt with a soon to be underwater morgage. Oh yeah, we will soon be running out of Natural Gas as well.

Remember back to 1992-1993 when the Congressional Office for Technology and Science proposed European style energy taxes inorder to prepare for an energy crisis during the early decades of the 21 century????
Well the Wing-nuts lead by Newt Gringrich and Rush Limbaugh dismantled the Congressional Office for Technology and Science in 1994 under the Contract with America.

There really is such a think as Peak Oil and the Oil companies have the US consumer right where they want him/her. Every drug dealer knows that is only good business to give way free samples.

Posted by: llamajockey | Aug 16, 2005 8:43:26 PM

I have a May, 1929 issue of The Forum (the magazine of controversy) that contains an article boldly putting forth Twenty Ways to Make a Million.

Admittedly, 1929 was an unusually poor time to be starting up adventurous new enterprises, but there among such exotic dreams as "central cooling systems", "cold light bulbs", "talking books", "helicopters", and "electrical clocks" I find this:

6. New sources of power - from the sun, the tides, and the heat of the earth.

What quaint ideas they had back in those days!

Posted by: de Selby | Aug 16, 2005 9:44:53 PM

I'm not trying to be on the offensive here, but Democrats also get sizable campaign contributions from oil companies? Of course of the top 50 campaigns the oil companies "fuel," 80% of those campaigns are for Republicans. But what about the Democrats? It's not much as bad, but they seem to be in the pockets of big oil too.

The fact that no alarm bells rang out when tax credits for gas-guzzlers were INCREASED and rebates for cars like the prius were DECREASED in the energy bill didn't marit one political spam e-mail from even my (and proud of her) senator, Barbara Boxer amazes me.

Sure we can talk about a political opportunity for Democrats to hit on, but what the hell is really going on here, Ezra?

This whole silence from both sides on the issue of oil profiteering is really quite striking.

Posted by: Tony | Aug 17, 2005 12:02:51 AM

I hate to rain on the big-oil-bashing parade, but ... are the oil companies really the villains?

I mean, we want oil prices to go up, right? That's the market signal that tells people to stop using it, that pushes people in the direction of clean energy. Right?

So how exactly do we get high oil prices without big profits for the companies selling it? What exactly would we ask of them other than to sell their product at the price the market will bear?

Posted by: Realish | Aug 17, 2005 3:10:17 AM

I mean, we want oil prices to go up, right? That's the market signal that tells people to stop using it, that pushes people in the direction of clean energy. Right?

You sound like you have been reading the Manhattan Institute's propaganda on a Ayn Rand approach to energy policy.

Besides any market based approach to Oil prices is based on buyers correctly anticipating future prices. As I said, the Energy industry deliberately lied as to their proven Oil reserves. This greatly reduced Oil futures prices throughout the 1990's. Look I used to help supply the Energy statistics to the trading desk of a major US bank. I remember the Energy desk manager telling me back in 2001 that the industry proven reserve figures were cooked.

It takes a decade or more to make drastic and longterm changes to energy consumption practices. We could have spent the 1990 with European level energy taxes that could have built the high speed rail, wind farms, solar hot water heaters..... Now Europe is much better perpared for Peak Oil than we are.

Now we are going to face an economic crises that forces lots of working and middle class folks into bankruptcy, even if they made wise personal choices and do not drive an SUV or live in a McMansion. Lots of folks are already deep in debt and 2 to 3 years more of government inaction as Oil hits $80-100 a barrel will sink them.

Posted by: llamajockey | Aug 17, 2005 10:00:57 AM

"Now Europe is much better perpared for Peak Oil than we are."

Not necessarily.

Sure they have better mass transit and smaller cars, but there's a downside to devoting the bulk of rail resources to moving people. In Europe a much larger percentage of goods move by truck (as opposed to rail or barge) than in the U.S.

Posted by: treefrog | Aug 17, 2005 11:45:12 AM

Besides, in another ten years gasoline will be obsolete. The shift to hydrogen is already beginning, along with new ways to produce it that do not involve hydrocarbons. See for example this.

I have a deep and abiding faith in the ingenuity of engineers. Soon, the rancor over oil will seem as quaint as the previous wars over coal, railroads, or river barges.

Posted by: Mastiff | Aug 17, 2005 4:06:15 PM

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