Third Party & Independents Archives

You’re getting hosed at the gas pump and in Washington

Attention all fans of “Trickle-Down Economics” and rampant deregulation of the oil and gas industry: You got what you asked for. Republican deregulation and blind Congressional fealty to corporate executives has given us a federal government that is wholly owned and driven by corporate America.

And what’s the most visible and obvious result, other than the daily exposure of corruption in Washington? Despite widespread stability in every oil-producing nation in the world, and despite the bedding down of every president since Johnson by Saudi/Arab oil sheiks, the prices of gasoline and oil are skyrocketing — and so are oil company profits.

Exxon Mobil Corp. earned nearly $11 billion in the first three months of this year, a ludicrous 69% increase over its performance for the same period last year. That’s on sales of $114 billion. Royal Dutch Shell is singing the same praises as they turned a profit of $6.3 billion in the first quarter, and BP — despite lingering costs from the Gulf Coast oil spill — made $7.1 billion in net profit.

What they aren’t making is fuel, at least not in normal quantities. And that’s a key factor in their reinvigorated financial performance. Despite increasing demand, refiners are producing less gasoline and diesel in the U.S. than usual for this time of year. They’re also exporting more to foreign countries.

Add rising oil prices, and you get the kind of sticker shock at the gas pump that some analysts say could challenge 2008′s all-time high of $4.66 per gallon — with regular gas already averaging about $3.88 a gallon in the U.S. and $4.22 in California, more than a month before the summer driving/vacation season kicks in.

And we – you and I – are giving them more than $4 Billion in federal subsidies to do it; not to mention grossly padded and fraud-ridden federal fuel contracts. If oil companies across the board are raking in ENORMOUS record-breaking profits quarter after quarter, why do they need repeated billions in taxpayer subsidies? When you have a job, you can’t collect unemployment. But, as always, the rules and laws don’t apply to the corporate elite and the politicians they bought to create the loopholes.

The five companies booked profits totaling $36 billion the first quarter of this year. With profits that high, what is the argument that the oil companies need tax breaks that average $2 billion a year, or subsidies that total $4 billion a year. $36 Billion times four fiscal quarters equals $144 Billion. Subtract the $6 Billion in federal giveaways, and that leaves $138 Billion in clear net profit, and somehow that’s STILL NOT ENOUGH?

But the corpocracy doesn’t live in an oil industry vacuum. Just yesterday, FCC Commissioner Meredith Attwell Baker – who four months ago approved the Comcast/NBC/Universal Studios merger – announced she is leaving her federal post next month to take a job as a Senior Vice President … at Comcast.

We’re supposed to believe that this “job offer” wasn’t presented to Baker BEFORE she approved the Comcast deal? Cue the anal-extracted airborne porcine.

The chief executives of all the major domestic oil companies are, once again, sitting before Congress and lying their collective asses off about why gas prices are so high.

Jack Gerard, president and CEO of the American Petroleum Institute, called the tax proposal a “vindictive money grab” that could “put more people out of work in New Jersey and across America, damage our nation’s energy security, raise energy costs and, ultimately, drive up deficits.”

This is fact-barren fear-mongering of the worst kind.

The nonpartisan Congressional Research Service concluded that eliminating the tax breaks would be unlikely to result in higher gasoline prices, which are influenced by a host of factors. The report, released Wednesday, said eliminating the tax breaks would raise about $1.2 billion in 2012 and “should have no defensible bearing or impact on gasoline prices whatsoever.”

The federal oil industry subsidies were created almost four decades ago, when the price of oil was $17 a barrel. At the time, it was felt that the oil industry as a whole needed some incentive for exploration. With the price of oil now at $113 a barrel, that need for incentive simply does not exist anymore. The only thing that keeps the subsidies in place is pure politics and pure unadulterated greed.

The latest Congressional dog and pony show would repeal the tax breaks for the five largest oil companies – Shell Oil Co., Exxon Mobil, ConocoPhillips, BP America and Chevron Corp. On Wednesday, ConocoPhillips chairman and CEO Jim Mulva issued a statement saying a tax increase would cost jobs, discourage investment and lead to even higher gas prices.

“Our industry and company are already taxed heavily compared to other industries in the United States,” Mulva said.

After it’s share of tax breaks, subsidies, deferments, shelters, exemptions, loopholes and “creative accounting,” ConocoPhillips had a final tax rate of 2.45 percent in 2010. After my allowed deductions and one single exemption, my tax rate was 13.03 percent. What was yours?

The cycle continues. The corruption continues. The free exchange between lobbyist, the government and its corporate whoremasters continue to play musical chairs, always leaving the taxpayer standing at the end of every round.

Yet more inarguable proof that America has the best government the billionaires can buy.

Posted by Gary St. Lawrence at May 12, 2011 1:56 PM
Comments
Comment #323117


We shouldn’t be mad or sad, we should be happy. Afterall, we sat on our rears, wallowing in the muck pit of Reaganomics, for thirty years, waiting for this day to happen.

Posted by: jlw at May 12, 2011 3:58 PM
Comment #323119

Quite so, Gary. The corporate elite have been working hard for well over 200 years to tie the consumer/voter down. And the politicians have worked to make it so over the same period of time. Today’s Wash Post – “A powerful former member of the Va House of Delegates was found guility of bribery and extortion Wednesday for soliciting a job at Norfolk’s Old Dominion University after obtaining state funding for the school.” Minor but pertinent to your point.

While it’s nothing new that Corpocracy rules. We’ve reached a point where the real legislative process is dead in the water. Only Corpocracy approved bills can become law. And those that do pass, like healthcare, are not something the taxpayer/voter would embellish.

Treating the symthoms Corporacy, such as abolishing tax breaks for oil corporations, will not address the overall problem of Corpocracy. And, we all realize that abolishing tax breaks for wealthy corporations just will not happen. We do recognize that elections are nigh and it’s the time for a lot of centrist/populist jargon that will supposedly make people feel good about gov’t.

To properly address the problem we must be cognizant of the source and that is the ‘money influence in politics and gov’t’. The money influence has its roots in Corporate Personhood law and in the way elections are funded. Until we deal forthrightly with those two fundamental issues be assured any forthcoming change will be detrimental to the taxpayer/voter and the Republic.

To remove the money influence requires abolishing Corporate Personhood law. Follow this with implementation of real campaign finance reform and we will have removed the money influence from gov’t/politics. But, who would believe that the ruling Corpocracy would allow such to happen? None, I would think. So, it will be necessary to establish a new 3rd party with a different political attitude and designed with a primary mission to drive those two issues through congress and the courts. To be sure, the party would have to be bullet proofed to prevent co-option by special interest.

While a 3rd party, so defined, is the only way to circumvent the Corpocracy there are a number of ways to weaken the Corpocracy in the interim. One, support the movement to vote incumbents from office in large numbers. Politicians made it possible for Corpocracy rule and they should be held accountable. Two, support organizations like www.movetoamend.orgMove To Amend and Reclaim Democracy who are at the forefront of the effort to abolish Corporate Personhood and end fraudulent elections. And third, support the movement to gain approval from congress and the courts for Article V Convention. This article, a long denied Constitutional right, provides a way for the voting public to weigh in on Constitutional amendments. The need for a balanced budget amendment comes to mind.

Otherwise, we have the Corpocracy we deserve.

Posted by: Roy Ellis at May 12, 2011 4:42 PM
Comment #323121

So, if we stop oil subsidies, should we also stop subsidies to alternative energy sources or should we stop subsidies to GE, who paid “0” taxes in the past two years, but made record profits?

Posted by: Conservativethinker at May 12, 2011 5:14 PM
Comment #323123

A government subsidy is nothing more than a monetary inducement designed to elicit desired action. Frankly, I would welcome an end to every subsidy. Wipe the slate clean and let the sitting congress decide what actions we are willing to subsidize in today’s political climate and within our existing budget restraints.

Posted by: Royal Flush at May 12, 2011 7:28 PM
Comment #323125

“A government subsidy is nothing more than a monetary inducement designed to elicit desired action.”

Royal Flush,

Agree. Subsidies are not in and of themselves bad. I would agree with your idea that they should be subject to some Sunset provisions. Economic times change. Unfortunately, some subsidies, that once made sense, continue well beyond their usefulness or justification. They become nothing more than a give-away to corporations or, for that matter, individual taxpayers. In the current case of oil, there is little sense in maintaining subsidies for oil exploration when the price per barrel has risen so dramatically over the past ten years. On the other hand, subsidies for alternative energy makes sense until those sources scale up sufficiently and improve their technological capability to compete with oil and coal. In the long term we will need alternative energy sources.

Posted by: Rich at May 12, 2011 7:57 PM
Comment #323127

Well said Rich. Political thought and goals have changed considerably in 40 or 50 years. Let our current elected representatives decide what is desirable and worthy of subsidization. And, when those decisions are made, they must be made in full view of the American people, not hidden in some obscure bill or in the middle of the night.

Posted by: Royal Flush at May 12, 2011 8:07 PM
Comment #323141

Great article, Gary, and I believe most agree with you. I’d be curious as what you would propose we do about Corpocracy rule.

Posted by: Roy Ellis at May 13, 2011 11:18 AM
Comment #323163

It’s important to recognize the out and out lies that our President is promoting about the Oil and Gas Industry:

The Oil and Gas Industry does not recieve any direct, taxpayer funded subsidies (unlike many farmers, dairy producers, GM and popular “Green Energy” companies…..). They recieve tax credits for legally and lawfully investing in certain areas of business. It bears repeating, they recieve no money from the Treasury, they get a break on the taxes they would ordinarily pay for investing in areas that the US Government deemed prudent.

Compare this to the 1.4 Trillion dollars in real money that was just handed out in TARP funds primarily to the administration’s friends in the financial services sector. Where is Obama’s outrage at those subsidies? I’m still waiting…………….

The obscene Oil & Gas Industry profit margins that are being crowed about by our President and others in Congress are actually far less than Google, Apple, GE and many other domestic companies that you never seem to hear a peep about. Where is Obama’s outrage about the obscene profits made by these and many others………?

ExxonMobil, Shell and ConocoPhillips cannot control the price of crude nor the price of gasoline at the pump. The crude that is refined comes from Oil Leases all over the world. None of the “big oil” companies have exclusive ownership of the oil they are collecting. There are thousands of individual investors and stockholders that not only own the oil companies, many of them also own a portion of every barrel of crude that is recovered from a working well.

Each of these individual investors have a reasonable expectation of recieving the maximum value for the crude they own when it is pulled out of the ground and sold on the open market. Traders representing Refiners and Petrochemical plants all over the world actively bid for this crude when it hits the market - and guess what, the highest bids get the crude. Similarly, when the crude is refined into gasoline and the multitude of other crude-derived products, companies bid for them - and again the highest bids win. And so it goes, all the way to us………..

None of the oil companies have the ability to set aside a special allotment of inexpensive crude for the people of New Hampshire or Ohio or Montana or Houston, TX. It just doesn’t work that way.

The domestic Oil and Gas Industry pays in an average of 85 million dollars per day to the US Treasury for taxes, royalties and other fees - over 30 Billion Dollars annually. Compare this to the lack of outrage or any Congressional hearings to look into the fact that GE paid “$0”, that right zero dollars in income taxes in 2010. Where is Obama’s outrage?

The domestic Oil and Gas Industry employs over 9 million workers - it is by far the largest private employment sector in the US. Despite this fact, Obama continues to attack the largest employers in the US………Where is Obama’s gratitude?

I do not believe that Obama and the members of his administration are stupid. Quite the contrary, I believe that they are very smart and are doing exactly what they want to do. I believe their goal is to collapse the US economy, with the end result being a population that is totally dependent upon the Federal government for food, water, housing, medical care, retirement, etc…

He has already neutered and taken over the domestic auto industry. He has done same with the financial services industry. He is trying to take over the Health Care Industry. His next target is Oil and Gas……….

Please think before you cast your next vote. Our country’s future is at stake.

God Bless you all

Posted by: mikeyboy at May 14, 2011 1:01 PM
Comment #323177


Gasoline… $5 per gallon?

EVIAN water… 9oz.. $1.49…$21.19 per gal.

EVIAN spelled backwards is NAIVE.

The printer is cheap.

The ink is $5200 per gal.

Posted by: jlw at May 15, 2011 1:55 AM
Comment #323180

mikeyboy,

Thanks for the information. I didn’t know that Obama had taken over the financial services industry. I kind of thought it was the other way around.

Yep, it all makes sense. Reducing subsidies (tax credits) to the oil and gas industry is clearly designed to cripple that industry and is part of an overall plan to collapse the US economy and result in a total takeover by Obama of the entire economy. Everyone knows that the oil industry cannot survive without government assistance when the price of oil is over $100.00 a barrel. The soaring profits are nothing but an illusion and aren’t incentives for new exploration and extraction. Don’t be fooled by oil lobbying for new drilling leases. It wouldn’t happen without government subsidies.

Jeez! This Obama is really subtle. Collapse major US industries and then take them over. Why, he even convinced Bush to go along with the plan for the financial and the domestic auto sectors. It’s kind of hard to see how the government actually gained long term control of those sectors, but maybe we are not looking deep enough. Mandating purchase of private health insurance is actually another scheme designed to collapse the private health insurance industry. Its contrary to logic, but these Obama people are “very smart” and know exactly what they are doing.

Posted by: Rich at May 15, 2011 7:48 AM
Comment #323197
The Oil and Gas Industry does not recieve any direct, taxpayer funded subsidies

Until the costs of global warming are factored into the price of fuel, those fuels should be considered to be taxpayer subsidized. When the consequences of global warming appear, it will be Uncle Sam who picks up the tab.

Posted by: Warped Reality at May 15, 2011 4:15 PM
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