Because I’m a huge dork, last night around midnight, laying in bed I flipped on the TV and turned on C-Span. I know. Anyways, I was in luck, because they were re-broadcasting the farcical Joint Hearing to receive testimony regarding Energy Pricing and Profits. I didn’t catch the very beginning, but I had tuned in before ExxonMobil’s CEO, Lee Raymond spoke, so I probably just missed most of the political grand-standing.
I did, however, get to listen to the pointed questions leading up to the Big Oil response – and despite the fact that I was almost asleep, my heart started racing. The questions were comically infuriating, partly because I could’ve given satisfactory responses, but mostly because they were being asked by the men we’ve elected to govern and lead our nation, men who are ostensibly educated and intelligent – men who couldn’t possibly have come off as more uninformed and economically ignorant if they had been wearing meat helmets.
Now, either the elected leaders of this nation are as economically ignorant as they seemed, in which case I hope they will take to heart the testimony of the big oil CEOs that was given yesterday — or, and I think this is what I fear most: they are not economically ignorant, and in fact, they knew all the facts prior to big oil’s testimony, in which case it seems apparent that they are spineless hacks who either refuse to, or are unable to explain the intricacies of the market to their constituents. In staging such a hearing, they allow the words to come out of the mouths of the bad guys, giving the legislators the appearance of “confronting the bad guys” and “trying to make a difference.” It’s grandstanding, a year before elections, to show their constituents that they are fighting against the evil capitalist oil profiteers.
In all fairness, I was pleasantly surprised with the answers that the Oil CEOs gave to their interrogators. I was honestly expecting some sort of half-assed apology, coupled with some sort of brow-beaten response to change their policies, which would open the floodgates for a tidal wave of reactionary legislation. They could’ve been hostile, lord knows I would’ve been, but instead they took a calculated, measured position, very much in line with capitalism and free-markets. In short, they said all the right things.
David O’Reilly, CEO of Chevron responded thusly emphasis mine:
[L]et me turn to what Chevron is doing to increase energy production. [W]e are investing aggressively all across the energy value chain. Since 2002, Chevron has invested $32 billion in capital expenditures worldwide – compared with $31.6 billion in earnings for the same period. In other words, we invested more than we earned . . . For too long, Americans have been led to believe they can enjoy low oil and gasoline prices with less exploration and refining. The hurricanes have shown that this equation is not sustainable. As we move forward, let’s not default to quick fixes, partisan solutions, or unrealistic goals.
The numbers are there; these firms are transparent in that sense. You can choose to live in some sort of economic fantasy land, believing that lowering prices will not increase demand, believing that you can get oil out of stones with little or no invesment – but as long as you do, you’re going to be seriously displeased with the reality.
These companies invest billions of dollars in risky ventures, in the most dangerous locales on earth, to provide us with a product that we all “need” so much. As Russel Roberts, Economics professor at George Mason University, previously asked: If you are in support of windfall profit taxes (whatever they are) when the oil companies are profiting, would you donate money, buy their stocks, or support legislation that would raise your taxes when the industry is not so profitable?
As I’ve pointed out before: It is irresponsible, reactionary, partisan journalism that has infuriated the public with regards to the 2005 3Q profits. If you’re concerned with who is making the windfall gains with regards to oil prices, look no further than your beloved government.
