The Dangers of Big Oil

Probably the biggest reason I get annoyed over the demonization of oil companies is that an incredibly diverse range of men and women are all being painted with a broad brush. “Oh, but we aren’t talking about them”, the demonizer will say. “We are talking about the CEOs and fat cats.”

But you see, you are talking about them. Big Oil is not the CEOs and fat cats. They own a very small percentage of the oil company stocks, and they make up maybe 0.1% of the workforce of Big Oil. No, when you direct your ire at Big Oil, you are directing your ire at pension funds, retirement accounts, and a lot of hard-working oil company employees who deserve much better.

Some of these people are out risking their lives to bring gasoline to your local service station:

U.S. Oilfield Deaths Skyrocket With Demand

(AP) Less than two months into the job in the oilfields of West Texas, Brandon Garrett was sliced in half by a motorized spool of steel cable as he and other roughnecks struggled to get a drilling rig up and running.

Garrett’s grisly end illustrates yet another soaring cost of America’s unquenchable thirst for energy: Deaths among those working the nation’s oil and gas fields have risen at an alarming rate, The Associated Press has found.

At least 598 workers died on the job between 2002 and 2007, according to the U.S. Bureau of Labor Statistics. During that period, the number of deaths per year rose by around 70 percent, from 72 victims in 2002 to 125 in 2006 and a preliminary count of 120 in 2007.

“This is a very, very hazardous industry with a very high rate of injuries and fatalities,” said Peg Seminario, director of safety and health for the AFL-CIO. “Safety and health problems are not getting the attention they need. With the growing demand for oil and petroleum products, the production pressures are going to increase and the safety and health problems are going to get worse.”

The irony is that the industry – at least it was certainly true of my former employer ConocoPhillips – is incredibly focused on safety. Safety is drilled into your head day after day, so that you are always thinking about it as you go about your job. I have worked in a number of other industries and for a number of other employers, and in my experience the oil industry is the most safety-conscious industry around. But we deal with high temperatures and pressures and volatile compounds, and an attention lapse can be fatal.

But if you want to understand a bit better why I am often so quick to defend oil companies, this story may help you understand. Big Oil for me just doesn’t have the same face that it does for so many politicians who are quick to condemn the industry. And as bad as those fatality numbers are, oil companies don’t even crack the top ten of the most dangerous industries:

The 10 most dangerous jobs in America

Occupation Fatalities per 100,000

Timber cutters 117.8
Fishers 71.1
Pilots and navigators 69.8
Structural metal workers 58.2
Drivers-sales workers 37.9
Roofers 37
Electrical power installers 32.5
Farm occupations 28
Construction laborers 27.7
Truck drivers 25

24 thoughts on “The Dangers of Big Oil”

  1. Amen. Such statements make me mad too.

    You forgot to say that big oil employees live and work in some of the most inhospitable places on earth. Both from nature, and sometimes politically. Our employees work hundreds of miles offshore where help is hours away by helicopter. Many of us have relocated to other countries or continents without our families.

    BTW – I write this from Houston where hurricane Ike is bearing down us. Most of Houston is shut down today. They closed our offices at noon yesterday. I’ve been on two conference calls already this morning. Most of our traders have relocated to Dallas to continue supplying oil and gas while the families ride out the hurricane in Houston. We have traders and operations folks who will be locked into the complex and continue to work despite the storm.

    If you ever wondered why there are no severe shortages of gasoline and other fuels right after a major hurricane, now you know why. “Big Oil” company employees never stop working to supply you with that energy. Even in a hurricane.

  2. George Orwell: “In the metabolism of the Western world the coal miner is second in importance to the man who ploughs the soil. He is a sort of grimy caryatid upon whose shoulders nearly everything that is not grimy is supported.”

    Orwell was a socialist (also an asthmatic) but he understood that energy was necessary for society, even if the form it took was often ugly, and was willing to pay tribute to those who made it possible.

  3. I also get very annoyed at the folks who bite the hands that feed them. I am the last person to approve of US oil addiction, but I recognize I am personally accountable. I do what I can to reduce my consumption, and reduce the burden on pretty much everybody who supports me. I rode my bike 5 miles in a downpour to get to work today. Politicians, like oil compaines, are responsible for supplying us with what we demand. Why can’t Mericans criticize our own actions before we criticize the actions of those who support our actions. Positive proaction vs negative reaction. Turn off your damn Television already.

    Oil companies are rich and in a better position than most of our social security/healthcare/war drained nation to freely build renewable power plants. It seems likely that those rich CEO’s are sick and want only to get richer from life. Naturally they should eventually be investing in alternatives.

    Do we really want to bite them? They could easily invest in other more appreciative and less dumb places. Don’t trust any politician who claim they will reduce gasoline prices, and punish the oil companies(liar). This is not what we actually want and this is not a team player’s attitude. Hauling in German windmills built by Merican investors ain’t cheap. -rant over- thank’s for listening

  4. Ditto. One of the greatest weaknesses of my greenie-weenie friends (and I have many greenie-weenie elements in me) is their demonization of productive people. GM, oil companies, construction companies etc. I started up a small furniture company. Let me tell you, making things for a living is hard.
    The greatest weakness of my rightie-tighties is the demonization or dismissal of people who work for a living, such as union workers, janitors, or government workers, or kneejerk rejection of the environmental movement or alternative energies.
    But, maybe things are getting better. Seems like even righties are embracing clean domestic energy, and even some liberals say they are pro-business.

  5. "Big Oil" is so outdated — wealthy ageing baby-boomers who have not learned a single thing since the Summer of Love.

    In the 1970s, Anthony Sampson wrote a book about the Seven Sisters, the big oil companies that controlled most of the world's oil. Thirty years later, most of the Seven Sisters no longer exist. And collectively they control only a few percent of global oil reserves. Big Oil just ain't what it used to be.

    And Benny Cole is right — elitists need to show some respect for the human beings whose hard work & innovation produce the wealth they long to redistribute.

  6. Oi trading down, down, down. Every dollar down means another spculator liquidates, driving prioces dfown more. A snowball down? Maybe.
    If Putin, Gustav and Ike can’t jazz things up, nothing will.
    See you at $40?

  7. $500 a barrel oil is just around the corner. Hurricane Ike could be the seminal event! Gasoline prices are much higher than they used to be!

    On the other hand, the only real kind of peak oil we face is political peak oil–the kind we might get from Vladimir Putin, Nancy Pelosi, Hugo Chavez, and the what’s his name wonder boy running for president.

  8. al fin-
    In today’s Wall Street Journal, they say Lehman Bros. took positions, and leverged up at 30-to-1. The WSJ did not say what kind of positions.
    But if that is the way they are playing on Wall Street, look out below in commodities markets. Can you imagine being leveraged 30-to1 in an already leveraged futures position?
    And now oil has dumped by nearly $50 a barrel. And the Street was bullish until a few months ago?
    Man oh man. We could see a spike downwards to $40 easy. Maybe $20.

  9. evan,

    I’m curious… and this question is related to the broader perception of the oil industry that RR discusses…

    Why do you think oil industry CEO’s are any more “sick” than CEO’s in other industries? Given the low market share of western oil companies and their resulting inability to influence prices to any significant degree, how would you describe the nature of their guilt?

    Also I would be interested in some examples of “dumb” and “appreciated” investments.

  10. I don’t know how anyone can vilify “Big Oil.” They are doing nothing more than providing a commodity that everyone wants and is in huge demand.

    If Big Oil didn’t provide the oil people want, those people would then be REALLY upset, wouldn’t they?

  11. most of the Seven Sisters no longer exist

    Huh? The Seven Sisters are still around. Most (4 out 7) weren’t bought out. They just swallowed up the other three. Chevron and BP split up and swallowed Gulf. Then Chevron swallowed up Texaco too. BP swallowed up Amoco, (not one of the seven). Exxon and Mobil merged to become ExxonMobil. Shell is still intact. All seven brand names still exist somewhere on filling stations in the US. The seven sisters merged to become the biggest 4 Supermajors.

  12. Armchair261, I never did specify Oil CEO’s were any more or less sickly than other types of CEO’s, that’s just my opinion of any large corporate CEO personality, obsessively greedy(personally or strategically for the company), it comes with the job and makes CEO’s good at their jobs, and makes the world more efficient. If you are insecurely insulted by my comment, deal.

    DUMB: is the most obiese nation, The political propoganda I get in my mailbox that claims some politician will provide cheap gasoline-pretty dumb-and people eat it up. Shall I continue or just leave the country. Face it Merica is Dumb relative to other nations who consume anywhere near the per-capita resources and oil we do. Is dumb a bad thing? that’s up to your interpretation. Given a choice, I prefer not to be dumb and shrug off the harm I’m doing to others through my dumb choices.

    Appreciative, it is obvious that I am an unappreciative jerk, insulting my own darn nation, and I was born Merican. It is not hard to imagine a body of people more appreciative than one whom supports politicians who want to penalize oil company executives and speculators for doing their jobs. I like to think that european nations are more appreciative because they seem to be more proactive in their actions(diesel engines, wind turbine design, renewable energy use in general, 40mpg average passenger cars, more respected, accepted and pronounced bicycle cultures, lower emphasis on the anal retentive daily bath habit, etc. and a greater willingness to embrace change when their ways meet resistance. Maybe that’s just because they are richer and/or older, I don’t really know why that is, but I’m jealous.

  13. Evan, relax. I’m just asking, because you seemed to single out oil industry CEO’s and I was curious why. I also thought your “dumb” and “appreciative” comment was directed to oil industry investment. But you were being more general.

    Personally, I think the caricature of CEO greed is highly overdone (but no doubt true in some cases). When people look for a new job, most of them consider other factors than just salary. I’d bet that most CEO’s, although they like their income and lifestyle, are strongly motivated by things like accomplishments and legacy, not just cash.

  14. Robert – your blog is one of the most intelligent on the web but your comment “Some of these people are out risking their lives to bring gasoline to your local service station” is almost laughable.

    I’m not of the opinion that they are ‘risking their lives’ so we can fill up our SUVs. The bottom line is that they are getting compensated quite well for their efforts. You reduce the paycheck – and you won’t see so many risking their lives.

    I don’t blame big oil for our energy problems but they are their own worst enemy when it comes to perception. Their PR efforts (ex: Exxon Valdez) have historically been abysmal and the compensation their CEOs have made in recent years is ridiculous.

  15. Oil companies may not be the best pickers of new energy technologies. I think most of them see this, and are diversifying only into things (e.g. green diesel) that leverages their skill sets. Otherwise, they’ll return the money to their shareholders, who are then free to plow that money into whatever independent energy businesses make the most sense. That’s how the capitalist system’s supposed to work.

    Oil company employees are (literally) going to the ends of the earth to bring us the oil we need. They are indeed risking their lives in hazardous natural and in many cases political situations. That they’re paid extra to take those risks doesn’t detract from the point.

    Oil executives may well be overpaid – but then, so may many Hollywood stars, ball players, and heck CEOs of many other business (banks that are going out of business leap to mind). What to do? At least with the execs, you can exercise your displeasure as a shareholder voting against their pay packages. What’s the alternative, a government body that sets pay rates by job category?

  16. I’m not of the opinion that they are ‘risking their lives’ so we can fill up our SUVs. The bottom line is that they are getting compensated quite well for their efforts. You reduce the paycheck – and you won’t see so many risking their lives.

    John, you can make the exact argument over any occupation where people are putting their lives at risk. If a policeman really believed he was going to die in the line of duty, would he sign up for the force?

    The fact is, regardless of a person’s reasons for taking on a dangerous job, they are putting their lives on the line and there is a product resulting from that (gasoline, safer streets, timber, etc.) It doesn’t really matter why they put their lives on the line (some policemen just like having authority), we benefit from the risks they take.

    I think you are hung up on the idea that I mean they are risking their lives just so you can have gasoline. That isn’t what I meant. They are risking their lives, and as a result you have gasoline.


  17. Huh? The Seven Sisters are still around.

    Ah! The famous “Conservation of Big Oil” hypothesis. Using the logic that every business bought by another company still “exists”, then we could probably find the buggy whip manufacturers if we tried hard enough.

  18. most of the Seven Sisters no longer exist

    I don’t know if anyone is still manufacturing straw man buggy whips, but 3 of the 7 sisters were bought out by the other 4 of the seven sisters, not by some outside groups, and they are still producing buggy… er.. oil. So, most of the Seven Sisters still exist as the Supermajor oil companies.

  19. People’s dislike of big oil is more to do with the concentration of power and resources in the hands of a few rather than an attack on hard-working individuals.

    But oil production needs huge investments to make it possible, which puts it out of the reach of small operators. So big oil seems pretty well inevitable.

    And judging by the comments I read hear none of you would subscribe to stories such as oil companies killing off electric cars. (I don’t claim to know.)

  20. “hands of a few”

    Exxon ranks #13 in worldwide reserves, and has a 3% global market share by production. Looking at publicly held companies, it gets smaller from there.

    The EIA references 13,820 oil companies operating in the US. The top 20 combined produce about 61% of its oil. The top 10 account for 44%. This doesn’t strike me as particularly highly concentrated when compared to other industries. What is the market share of the top 10 camera companies? Computers? Automobiles?

    I’m not sure where this public perception that the western oil companies are practically a monopoly comes from, but the publicly held oil industry is actually pretty highly fragmented. The state oil companies are far more influential.

  21. Doubtless being a coca farmer in the Colombian mountains is a tough gig — you break your back every day to just about feed your family, praying to escape chemical sprayers that are actively trying to kill your crop, while meanwhile either the government or the FARC might decide to kill you — but I doubt you’ll ever hear much sympathy for the plight of Colombian coca farmers from the lips of crack addicts.

    It is so with Americans and oil companies. Perhaps I am too harsh in my metaphor, for I understand your sympathy for your former colleagues, and certainly oil is at least a legal drug. But I speak of human nature, not ethics.

    — C.

  22. “the publicly held oil industry is actually pretty highly fragmented”.

    Ah, thanks for the update. I guess it’s more to do with perception. Undoubtedly taps into people’s general anxiety about not being in control. And when you think about how important oil is to all our lives, it’s not an unreasonable fear. Petrol prices shoot up, and I can’t afford the groceries; an oil tanker dumps tons of oil on pristine beaches. So “big oil” is probably an inaccurate but handy tag to encapsulate all this.
    And of course a favourite baddie in Hollywood is the corporate big boss.

  23. “So “big oil” is probably an inaccurate but handy tag to encapsulate all this.”

    I think three things can explain the Big Oil as enemy perception.

    First, there are only a limited number of gasoline retailers, especially in a given local area. So people think there must be only a limited number of oil producers. Foreign producers are out of sight out of mind. There are no Saudi Aramco or NIOC gas stations.

    Second, gasoline is probably the only price volatile commodity that most people purchase. They buy a lot of it and often. They notice the changes in a big way.

    Third, there is a perception that oil is like any widget business. Manufacturers (in this case producers) just set the price of their products according to some whim.

    Here’s an interesting quote I ran across last month:

    “One problem with this populist [perception] is that it can’t tell us anything useful about specific economic problems. Blaming the oil companies’ greed for high gas prices, for instance, assumes a cause-and-effect relationship that violates a basic rule of science: You can’t use a constant (greed) to explain a variable (gas prices). The only way to make the accusation stick is to say that greed, somehow, is also a variable. The energy industry’s chief executives went through an exceptionally greedy phase earlier this year and crude oil prices skyrocketed. In recent days, however, they’ve been waking up feeling about 15% less greedy, and prices have receded.” William Voegeli, a visiting scholar at Claremont McKenna College’s Henry Salvatori Center.

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