Consumer advocate Tyson Slocum recently testified before the U.S. House of Representatives Committee on Transportation and Infrastructure about the record high gas prices. I am going to resist the urge to do a deep debunking, because 1). I have already taken a shot at his credibility; 2). I haven’t slept in 36 hours; 3). Maybe he’s got some good points? 😉
Here is a PDF of his testimony:
Among some of Slocum’s findings (and a “few” comments, since I can’t resist):
Public Citizen research shows that oil companies aren’t adequately investing these record earnings into projects that will help consumers, as the five largest oil companies have spent $170 billion buying back their stock since 2005.
I am sure the oil companies will be calling for advice on projects you think deserve their investments. Be sure to keep your list handy.
ExxonMobil, ChevronTexaco, ConocoPhillips, BP and Shell produce 10 million barrels of oil a day—more than the combined exports of Saudi Arabia and Qatar.
So the top 5 have total production greater than the exports of two countries? Wouldn’t you then surmise that these companies are dwarfed by the national oil companies that they must compete against?
While major oil companies haven’t applied for a permit to build a new refinery, a small start-up has: Arizona Clean Fuels.
While they have been fiddling with that permit for close to 10 years now, major oil companies have expanded refining capacity by 2 million barrels. Of course inconvenient facts don’t fit Slocum’s agenda. But do let us know when Arizona Clean Fuels breaks ground on their new facility. However, don’t count on it now given Mexico’s declining production (which is where they were expecting to get their oil).
With nearly $1 trillion of combined assets tied up in extracting, refining and marketing petroleum and natural gas, the big five oil companies’ entire business model is designed to squeeze every last cent of profit out of their monopoly control over fossil fuels.
Hmm, that’s a lot of money tied up. How much would you expect to profit if you had a trillion dollars tied up? Would $100 billion a year – 10% return on those assets – do it? Or would that be a windfall?
Margins for U.S. oil refiners have been at record highs. In 1999, U.S. oil refiners enjoyed a 22.8 cent margin for every gallon of gasoline refined from crude oil. By 2006, they posted a 53.5 cent margin for every gallon of gasoline refined, a 135 percent jump.
Given that you testified in 2008, wouldn’t that be a relevant data point? What are margins now, Tyson?
Slocum outlines his plan:
Public Citizen has a five point plan for reform:
• Repeal all existing oil company tax breaks, close loopholes allowing oil companies to escape paying adequate royalties and/or implement a windfall profits tax, dedicating the new revenues to financing clean energy, energy efficiency and mass transit.
• Re-regulate energy trading exchanges to restore transparency and impose firewalls to stop energy traders from speculating on information gleaned from the companies’ affiliates.
• Ensure that new powers provided to the Federal Trade Commission to crack down on unilateral withholding and other anti-competitive actions by oil companies and financial firms are effectively carried out.
• Establish a Strategic Refining Reserve to be financed by a windfall profits tax on oil companies that would complement America’s Strategic Petroleum Reserve (SPR), and cease filling the SPR.
• Improve fuel economy standards from the modest increase approved by Congress in 2007 to reduce gasoline demand.
That should ensure cheap energy for all. All this leads me to wonder exactly what kind of expertise one requires to be invited up to Congress to testify. Simply an ability to speak?