May 222008
 

I happened to hear the recorded proceedings of the US Senate’s grilling of Big Oil on AM this morning.

I was more than a little stunned, but very envious of the support US citizens are getting on the petrol/gasoline cost issue from their elected representatives.

Senator Durbin lashed out:

“Does it trouble any of you when you see what you are doing to us, the profits that you are taking, the costs that you are imposing on working families, small businesses, truckers, farmers?”

Senator Leahy asked Chevron Oil’s executive VP, Peter Robertson, how much he took home in remuneration last year. Robertson replied proudly that it was well over one million dollars and was public knowledge, but when pushed, admitted it was more than US$4m. When pushed harder, claimed "I don’t remember. I don’t know because it depends. There’s a whole bunch of ways ". He didn’t want to advertise the fact that last year, he pocketed US$14m, including stock options. Clearly, when made public, US$14m in annual salary is embarrassing to Mr Robertson. He should think of taking a pay cut. He might feel better.

Then there was the hackneyed claim that Big Oil has no control over the price of petrol in the US.

“As repetitive and uninteresting as it may sound, the fundamental laws of supply and demand are at work,” said John Hofmeister, the president of Shell Oil Company. “Oil exporting nations, as has been said, are managing their natural resource development and production to supply their local and global markets in their own self-interest.”

What a load of horse patooties! Anyone who stops for a moment to consider those claims must realise that profiteering is happening on a daily basis. Speculators, making utterances about pipeline damage in Nigeria, or political gamesmanship in eastern European nations, are what pushes up the price of oil. Fear, speculation on maybes and what-ifs and the inevitable knowledge that the limited resource which drives the industrial world is running out. There is no supply-and-demand driving up the price of oil. Currently, supply is out-stripping demand by some two million barrels a day, so why the lies about supply and demand?

Oil won’t vanish this year or next. Sometime in the next fifty to sixty years, oil will disappear from the global scene, at least as an easily available fuel resource for people like you and I. Wars will be fought for it, lives will be lost over it and nations will fall because of it. Is it necessary for the oil corporates globally to accelerate that process by artificially making what remains seem rarer and harder to obtain than it really is?

Why should those who are in positions of responsibility for the supply of a dwindling resource, be permitted to profit mightily through it’s retailing? That’s not supply and demand. That’s greed. For mine, the Australian government would be well served, both politically and economically, by reviewing things like the highway robbery which is the fuel excise. It’s a cash cow, nothing more. The old saw about taxing a dwindling commodity as a means of preserving it, no longer holds any water, while giant oil retailing entities profit by riding, and probably feeding, the speculative nature of pricing. We have a GST, which when considering fuel purchases, is a tax upon a tax. As a part of a total taxation review, I believe the excise, as with a great many other invisible taxes which still remain, post-GST, ought to go and be factored into an increased GST levy. What you use, you pay for. No fairer method could exist.

I also think it behoves politicians in this country to take a leaf from their American counterparts. Perhaps our constitution disallows the grilling of business by elected representatives in the public interest, but I reckon it’s a worthwhile exercise. Not just mambie-pambie ACCC inquiries which never come to anything, but a holding to account by the people’s representatives of those who would profit from artificially manipulated economic situations which adversely impact on this country’s consumers. The cost of living, at least the fiscal cost, is high enough without our hard-earned being funnelled into the bank accounts of those who don’t know how much they earn because the numbers have too many zeros.

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  2 Responses to “Why Not Ask Why?”

  1. It’s a given that Perpetual Motion is impossible but Perpetual Consumption is alive & thriving in the US military.
    SLATE recently reported in its Explainer section that the DofD consumes approx 40% of all oil products in that benighted land.
    So even to go fight an aquisitive war is not wildly economic.
    And neo-cons claim, above all else, to be econoimic rationalists.
    As the original Republican Reptile (PJ O’Rourke) opined re Iraq, “one thing we’ve not learned is that it’s far cheaper to buy oil than try to steal it.”

  2. It’s a given that Perpetual Motion is impossible but Perpetual Consumption is alive & thriving in the US military.
    SLATE recently reported in its Explainer section that the DofD consumes approx 40% of all oil products in that benighted land.
    So even to go fight an aquisitive war is not wildly economic.
    And neo-cons claim, above all else, to be econoimic rationalists.
    As the original Republican Reptile (PJ O’Rourke) opined re Iraq, “one thing we’ve not learned is that it’s far cheaper to buy oil than try to steal it.”