Friday, October 28, 2005

Oil Company profits soar. Thanks suckers!

"Senate Majority Leader Bill Frist, a Tennessee Republican, said oil company executives would be asked to appear at a Senate hearing to explain why energy prices are so high. "

That should be filed in the Stupid Senator questions file. The reason why gas prices are so high is that the oil companies love limiting the refining capacity and control over oil distribution with things like the Texas Railway Commissionlwhich for years limited the amount of crude pumped from the Texas oil fields. So successful was Texas Commission in the control over oil it is often forgotten that OPEC was modeled after it.
The oil companies continue to limit the amount of oil pumped and more importantly gas refining. They keep prices high in normal times and when something like Hurricane Katrina comes along and causes any distruption they really make sky high profits. It's supply and demand Senator Frist. They control the supply so they can demand whatever they want. We can all thank those whoe voted to keep Republicans like Bush and Cheney ( two oil men) in the Whitehouse and the Republicans in control over both Houses of Congress. The Oil companies say: Thanks suckers!


Bob said...

Actually, gas prices, even at $2.50-$3.00 a gallon, are low when adjusted for inflation. Prices from the 1980's in today's dollars would be over $3 a gallon. OPEC has been keeping prices artificially low to increase our dependence on oil. It wasn't until China and India began consuming oil at a increasingly high rate that the burdens on OPEC's supply forced prices to go up. As for the hurricanes, disruptions to the supply chain had a bigger impact on prices than any disruptions at refineries. Either way, oil prices should serve as a wake-up call to Americans. We all need to drive more fuel efficient vehicles, invest in mass transportation, further develop biodiesel sources, and make smart land use decisions to reduce commute distances. Both parties have neglected to do these.

BCP said...

"Fact: Oil companies have exploited their strong market position to intentionally restrict refining capacity by driving smaller, independent refiners out of business. A congressional investigation uncovered internal memos written by the major oil companies operating in the U.S. discussing their successful strategies to maximize profits by forcing independent refineries out of business, resulting in tighter refinery capacity"-

Also here is the Department of Energy Data for oil for the last ten years the second column is the average price that year the last column is the price adusted for in flation in 2005.

1995 $16.75 $21.86
1996 $20.46 $25.92
1997 $18.64 $23.09
1998 $11.91 $14.53
1999 $16.56 $19.72
2000 $27.39 $31.61
2001 $23.00 $25.83
2002 $22.81 $25.19
2003 $27.69 $29.93
2004 $37.66 $39.61
2005 $46.47 $50.15

I guess it's just coincidence that the prices jump during the Bush years.
Though I agree with you that the oil prices should be a wake up call. I don't expect anything from Bush/Cheney administration in terms of energy policy that would affect friends and cronies in the oil industry.