Is Big Oil to blame?
Quick to point the blame finger at someone other than themselves for a lack of initiative to explore for oil in its own backyard while looking for alternative fuels, Congress summoned the heads of the 5 major oil companies to explain why their profits are soaring. Exxon Mobil Corporate Senior Vice President Stephen Simon stated that the record profits are needed for the cost of future development and that along with those profits comes the payment of record taxes. While I question the “future development” response since we’re constantly reminded that no new refineries are being built, you’ve got to know that government has both hands out every time Big Oil takes in a buck.
I’m not going to tell you that Exxon and its oil buddies are blameless, but aren’t they achieving what every entrepeneur desires…SUCCESS! The whole idea about starting a business in this country is that your business plan will take off and your venture will profit. After paying more than your fair share of taxes so others can sit on the porch waiting for their check in the mail, you’d like to have enough left over to meet your family’s needs and maybe enjoy some of the extra pleasures in life like dinner at a restaurant that doesn’t have a children’s menu or a vacation outside the city limits. Other than our government, who would ever consider starting up a company that was destined to fail?
Face it folks, gas prices aren’t coming down anytime soon. Europe has been paying these prices for years and it’s now catching up to us. If our elected officials really wanted to help out the rest of us, they could issue a temporary repeal of fuel taxes. According to API, the average amount of state tax imposed on a gallon of gas in January of 2008 was 47 cents. Our Federal government gets 18.4 cents, but just try and turn off that revenue spigot. Even if the miracle of lower fuel taxes came to be, gas prices would continue to climb. It all goes back to supply and demand.
Contrary to the beliefs of many in Congress, there is no overnight fix for a problem that we’ve brought upon ourselves. We need to put the pressure on our government to offer real incentives to companies and individuals to find alternative fuels and be more productive with the fuels we currently have. Telling businesses that they’re making too much money sends the wrong signal unless we’re heading for socialism, but that’s another subject altogether.
on April 4th, 2008 at 9:41 am
Yes, fuel prices aren’t coming down and it is possible they may never come down (we’ll have to wait and see what the election does to the price of fuel). Obviously, the climbing fuel prices are a perfect opportunity for political grandstanding, which is what we saw earlier this week from the House Select Committee on Energy Independence and Global Warming. If you want to give the impression you’re “working hard”, assemble some of the top oil executives in front of the committee and scold them for being greedy. Then, when it’s over, have an “off-line” conversation with the execs and ask for your cut. Perhaps that is too cynical. Nevertheless, if the committee wanted to do some “real work,” they would say, “Fine, oil companies are beyond greedy at this point. We need to come up with a real plan for aggressive innovation and adoption of alternative fuels. Nothing will reduce the price of fuel like good old fashion competition.” But of course, if oil companies start stuffing wads of cash in your pocket, then where is the incentive to create a real plan for alternative fuels? Perhaps that is why all we hear is “talk” about the need for alternative fuels.
on April 4th, 2008 at 12:25 pm
Love that gas sign you put up with your post! That gave me a good laugh!
Yes - guess prices are ridiculous. That’s where all my money goes these days.
Thanks for sharing. Your post was a good read!
on April 5th, 2008 at 1:29 pm
Although I rarely drive, I do ride as a passenger in both private and public transportation, and am a consumer of groceries and other goods that need gas to reach the store shelves.
Recent news is that there’s no global warming forecasted and no evidence of any the past decade.
Wonder if there’s not some huge resource of oil undercover that we’ll “discover” soon. I hope so!
Meanwhile, gas consumption in New England has decreased.
What’s the next step? Maybe having retail close one hour earlier twice a week. Start with baby steps, and even those will be monumental.
on April 6th, 2008 at 8:33 am
You are correct that “big oil” is not to blame for high gas prices. I disagree with your tax policy. A core principle in capitalism is that the state should regulate the market for externalities (those things the free market does not take into account - say pollution). Given that you have to have taxes to run the country a gas tax that tempers the use of a non-renewable resource is a wise idea. In fact the tax should be raised.
I am also for cutting government spending but there is a great deal of spending that needs to be cut before you can sensibly even consider cutting any taxes (and gas tax would be far down the list of what taxes to cut).
The blame for providing big oil huge taxpayer subsidies is not big oils fault but those politicians that took huge payments from big oil and then voted to give big oil billions. The fake hearings to try and paint a picture that big oil is responsible for the dumb behavior of congress is one more reason to believe congress is in very big need of better leaders. But we are the ones electing them and we show very little desire to change who we put in charge.
on April 6th, 2008 at 11:36 am
I see your point on taxes, but continually raising those taxes only hurts those that are struggling to buy gas so they can continue to get to work. In my neck of the woods, mass transit is a joke.
Some might argue that these taxes also help to build a better transit system, maintain our current aging system, and make investments in alternative energy. While the former may be true by the numerous orange traffic barrels on our roads, the latter is laughable. If we could follow the flow of those tax dollars, we would find that few if any of those dollars are spent in helping to find alternative renewable fuel sources. Ethanol, or “burning food for fuel” is another subsidy in alternative fuel clothing but this time farmers profit. We are already seeing how well this program is doing in the rising cost of foods that require corn including livestock that need it for feed.
You are so right that we are the ones responsible for putting our greed-driven leaders in office. Let’s hope this year’s elections will send a message to all of them that we’ve had enough of their pocket stuffing.