What Big Oil Really Does With Our Money

Jun 12 2011 Published by under Uncategorized

Gas prices remain high. In the face of the catastrophic failure of prayer to lower them, Republicans have drawn the proper and logical conclusion: that an all-powerful God cannot control oil prices, but a black, anti-colonialist Muslim president can. So it must be his fault, not His. In the category of “conclusions improperly drawn,” this one has to be a blue-ribbon winner.

If you’re like me, you’re probably not too happy. You’re perhaps driving less, combining errands when possible. The idea of taking my car out on the highway just to drive seems alien now. And while we’re hurting, Big Oil is laughing. As reported here earlier, the oil industry’s subsidies average about $4 billion every year. According to the New York Times,

[A]n examination of the American tax code indicates that oil production is among the most heavily subsidized businesses, with tax breaks available at virtually every stage of the exploration and extraction process.

The oil industry claims it needs these subsidies. It says it’s in our best interests to continue to give it those subsidies because those tax breaks create jobs and keep prices affordable.  The U.S. Chamber of Commerce says the same; their chief lobbyist, R. Bruce Josten called repeal efforts “punitive taxation” that would jeopardize U.S. jobs and “increase energy costs.”

Affordable?

That’s a laugh. And the rest is a lie.

Public Citizen concluded after an investigation of Big Oil’s profits and its investment strategy: “Big Oil’s investment decisions are driven by market prices of crude oil, not U.S. tax policy.”

Look at the diagram below. This is where Big Oil puts its money. Not on creating jobs and keeping gas prices affordable:

According to Public Citizen,

Our research shows that since 2005, the largest five oil companies operating in the U.S. spent nearly half a trillion dollars buying back their own stock and paying dividends to shareholders. That’s more money than they spent investing in their U.S. infrastructure.

Big Oil also has lobbyists. The nonpartisan Center for Responsive Politics reports that the oil and natural gas industry has spent $340 million on lobbyists since 2008. Buying votes – an investment of sorts, but not on in infrastructure.

That’s where our tax dollars are going. Not toward job creation and keeping oil prices low, but toward enabling Big Oil to gouge us at the pumps and to enrich themselves at our expense. This is the truth behind  Republican trickle down economics. The only thing that trickles down is yellow and smells bad, folks.

As Public Citizen says, “It’s time our leaders stop bowing to corporate interests and put an end to the “take the money and run” tactics of Big Oil that are nothing short of highway robbery.”

I previously noted Big Oil’s response, Exxon Mobil’s vice president for public and global affairs, Kenneth Cohen:

“We understand that it’s simply too irresistible for many politicians in times of high oil prices and high earnings — they feel they have to demonize our industry.”

Apparently pointing out the truth has become demonizing. Must be akin to Palin’s definition of asking questions, “Gotcha” journalism.

Not long ago, RMuse sorted things out in the following terms:

Senator Kay Bailey Hutchison (R-TX) said America should “be giving every possible break to companies that hire in America.” Senator Orin Hatch (R-UT) claimed the bill was a Democratic effort to bring in more revenue and not pay down the deficit. “Let’s be clear about what’s going on here: Democrats want to raise taxes to pay for more government spending,” he said. Obviously, Republicans want to increase the already record oil industry profits to guarantee more campaign contributions for Republicans.

Big Oil hasn’t a leg to stand on, but they can stand on our already strained backs by gouging us at the pumps. As Public Citizen points out,

While the speculation-fueled price of oil per barrel has continued to escalate, the underlying costs to produce oil haven’t. Consider this: On average, it costs $20 to produce a barrel of oil. Big Oil sells it to us for more than $100. This generates the massive cash flow that fuels oil companies’ profits and spending.

Conveniently, the Republicans let it be known that our first black president is responsible for gas prices. Not the oil companies that charge us $100 for $20 worth of work. It sure isn’t their fault for selling out, for giving our money away for the privilege of being screwed at the gas pumps, and it sure isn’t Big Oil’s fault. Who are we to tell them what to do with the money they are stealing from us, after all?

Image from  SwfitEconomics.com

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