Thread: Subject: Oil executives try to educate Senate Democrats

Subject: Oil executives try to educate Senate Democrats

Good information - a must-read!

Everyone should read this as it is an eye opener even if you don't have the time, take the time!!!!!
It is a bit long, but worth the read. This will tell you all you need to know about the price of gas. Congress is the culprit and always has been. I say that Americans will only come to their senses this winter when they "freeze in the dark".

From Powerline

May 21, 2008

Oil Executives Try to Educate Senate Democrats, But Democrats Appear Hopeless
Earlier today, the Senate Judiciary Committee summoned top executives from the petroleum industry for what Chairman Pat Leahy thought would be a politically profitable inquisition. Leahy and his comrades showed up ready to blame American oil companies for the high price of gasoline, but the event wasn't as satisfactory as the Democrats had hoped.

The industry lineup was formidable: Robert Malone, Chairman and President of BP America, Inc; John Hofmeister, President, Shell Oil Company; Peter Robertson, Vice Chairman of the Board, Chevron Corporation; John Lowe, Executive Vice President, Conoco Philips Company; and Stephen Simon, Senior Vice President, Exxon Mobil Corporation.

Not surprisingly, the petroleum executives stole the show, as they were far smarter, infinitely better informed, and much more public-spirited than the Senate Democrats. One theme that emerged from the hearing was the surprisingly small role played by American oil companies in the global petroleum market. John Lowe pointed out:

"I cannot overemphasize the access issue. Access to resources is severely restricted in the United States and abroad, and the American oil industry must compete with national oil companies who are often much larger and have the support of their governments. We can only compete directly for 7 percent of the world's available reserves while about 75 percent is completely controlled by national oil companies and is not accessible."

Stephen Simon amplified:
"Exxon Mobil is the largest U.S. oil and gas company, but we account for only 2 percent of global energy production, only 3 percent of global oil production, only 6 percent of global refining capacity, and only 1 percent of global petroleum reserves. With respect to petroleum reserves, we rank 14th. Government-owned national oil companies dominate the top spots. For an American company to succeed in this competitive landscape and go head to head with huge government-backed national oil companies, it needs financial strength and scale to execute massive complex energy projects requiring enormous long-term investments.

To simply maintain our current operations and make needed capital investments, Exxon Mobil spends nearly $1 billion each day.
Because foreign companies and governments control the overwhelming majority of the world's oil, most of the price you pay at the pump is the cost paid by the American oil company to acquire crude oil from someone else:
Last year, the average price in the United States of a gallon of regular unleaded gasoline was around $2.80. On average in 2007, approximately 58 percent of the price reflected the amount paid for crude oil. Consumers pay for that crude oil, and so do we. Of the 2 million barrels per day Exxon Mobil refined in 2007 here in the United States, 90 percent were purchased from others."

Another theme of the day's testimony was that, if anyone is "gouging" consumers through the high price of gasoline, it is federal and state governments, not American oil companies. On the average, 15% percent of the cost of gasoline at the pump goes for taxes, while only 4% represents oil company profits. These figures were repeated several times, but, strangely, not a single Democratic Senator proposed relieving consumers' anxieties about gas prices by reducing taxes.

The last theme that was sounded repeatedly was Congress's responsibility for the fact that American companies have access to so little petroleum.
Shell's John Hofmeister explained, eloquently:
"While all oil-importing nations buy oil at global prices, some, notably India and China, subsidize the cost of oil products to their nation's consumers, feeding the demand for more oil despite record prices. They do this to speed economic growth and to ensure a competitive advantage relative to other nations.

Meanwhile, in the United States, access to our own oil and gas resources has been limited for the last 30 years, prohibiting companies such as Shell from exploring and developing resources for the benefit of the American people.
Senator Sessions, I agree, it is not a free market.

According to the Department of the Interior, 62 percent of all on-shore federal lands are off limits to oil and gas developments, with restrictions applying to 92 percent of all federal lands. We have an outer continental shelf moratorium on the Atlantic Ocean, an outer continental shelf moratorium on the Pacific Ocean, an outer continental shelf moratorium on the eastern Gulf of Mexico, congressional bans on on-shore oil and gas activities in specific areas of the Rockies and Alaska, and even a congressional ban on doing an analysis of the resource potential for oil and gas in the Atlantic, Pacific and eastern Gulf of Mexico.

The Argonne National Laboratory did a report in 2004 that identified 40 specific federal policy areas that halt, limit, delay or restrict natural gas projects. I urge you to review it. It is a long list. If I may, I offer it today if you would like to include it in the record.

When many of these policies were implemented, oil was selling in the single digits, not the triple digits we see now. The cumulative effect of these policies has been to discourage U.S. investment and send U.S. companies outside the United States to produce new supplies.
As a result, U.S. production has declined so much that nearly 60 percent of daily consumption comes from foreign sources.
The problem of access can be solved in this country by the same government that has prohibited it. Congress could have chosen to lift some or all of the current restrictions on exportation and production of oil and gas. Congress could provide national policy to reverse the persistent decline of domestically secure natural resource development."

Later in the hearing, Senator Orrin Hatch walked Hofmeister through the Democrats' latest efforts to block energy independence:
HATCH: I want to get into that. In other words, we're talking about Utah, Colorado and Wyoming. It's fair to say that they're not considered part of America's $22 billion of proven reserves.
HOFMEISTER: Not at all.
HATCH: No, but experts agree that there's between 800 billion to almost 2 trillion barrels of oil that could be recoverable there, and that's good oil, isn't it?
HOFMEISTER: That's correct.
HATCH: It could be recovered at somewhere between $30 and $40 a barrel?
HOFMEISTER: I think those costs are probably a bit dated now, based upon what we've seen in the inflation...
HATCH: Well, somewhere in that area.
HOFMEISTER: I don't know what the exact cost would be, but, you know, if there is more supply, I think inflation in the oil industry would be cracked. And we are facing severe inflation because of the limited amount of supply against the demand.
HATCH : I guess what I'm saying, though, is that if we started to develop the oil shale in those three states we could do it within this framework of over $100 a barrel and make a profit.
HOFMEISTER: I believe we could.
HATCH: And we could help our country alleviate its oil pressures.
HOFMEISTER: Yes.
HATCH: But they're stopping us from doing that right here, as we sit here. We just had a hearing last week where Democrats had stopped the ability to do that, in at least Colorado.
HOFMEISTER: Well, as I said in my opening statement, I think the public policy constraints on the supply side in this country are a disservice to the American consumer.

The committee's Democrats attempted no response. They know that they are largely responsible for the current high price of gasoline, and they want the price to rise even further. Consequently, they have no intention of permitting the development of domestic oil and gas reserves that would both increase this country's energy independence and give consumers a break from constantly increasing energy costs.

Every once in a while, Congressional hearings turn out to be informative.

How are Democrats responsible for the high price of gasoline and why in the world would they want that or want it to go up?? If things are so hrd for those poor, innocent oil execs then how did they manage to make record billions in PROFIT? It might cost Exon a billion a day but they are obviously more than making up for it. If they spend a billion a day then they must be making at least 1.1 billion per day to have the profits they do. Really Janelle, think for yourself. Use some logic.

Originally Posted by janelle

The point is most of the gas money goes for taxes. The Democrat party is the tax party. Why do you think Massatuchetts is called Taxatuchetts?

The dems also do not want drilling in areas that will disturb wildlife. Enviormentalists stop it with the dems help. No scientific bases for it, just feelings it will hurt the areas. Then we see pics of polar bears playing in the pipeline in Alaska without any harm coming to them.

Seems you didn't read the article.

It's Massachusetts, not Massatuchetts.

The Republicans have let us down as well. they should have acted when they were in power but they didn't.

Originally Posted by nightrider127

Save your breath Bahet. It's a lost cause. The only way that Congress wouldn't be at fault, according to some posters, is if they were Republicans.

Yea, I know. When they were in power in the House, Senate, and Presidency and things went to crap people bamed them but that blame was passed back to Clinton under the guise that "it takes years and years to make that sort of impact and blah blah blah, yank yank yank." Now, however, the Democrats have minor control of one portion of one branch of congress and it's their fault that housing is in crisis, gas is up, unemployment is up, outsourcing is up, etc, etc.

I tell you what, either the Republicans are halfwits who can't get anything done of the Democrats has some serious super powers to exert that much influence. Or perhaps, just maybe, they were wrong.

The prices have increased, the taxes haven't. And Democrats are no more likely to raise taxes than Republicans. It's just how they're spent that makes the difference. Frankly, I'd rather pay taxes to help the poor and underprivledged and support the schools than to pay some big company to build in an area they were planning to build in anyhow. But that's just me and my backwards liberal ways.

Originally Posted by Bahet

The prices have increased, the taxes haven't. And Democrats are no more likely to raise taxes than Republicans. It's just how they're spent that makes the difference. Frankly, I'd rather pay taxes to help the poor and underprivledged and support the schools than to pay some big company to build in an area they were planning to build in anyhow. But that's just me and my backwards liberal ways.

We already support the schools and the poor. Everytime we have an election here we vote to raise more money for our inept schools.

Where are you living that taxes have not increased. I'm moving there.

Where is all those oil wells in our country the big oil companies have built? I don't see them.

Originally Posted by janelle

We already support the schools and the poor. Everytime we have an election here we vote to raise more money for our inept schools.

Where are you living that taxes have not increased. I'm moving there.

Where is all those oil wells in our country the big oil companies have built? I don't see them.

Where are you living that taxes increased so much more than they had every other year? I suggest you move anywhere else. We pay sales tax. Same as it's been the last 4 years. We pay property tax. That went up as the value of the house did (we bought low) but didn't go up as a percentage of the value. Gas tax, same as last year and the year before. Income tax, I do our taxes. We do ok but still get back everything we pay in and more for child tax credits. I think the last time we actually didn't get back every penny was about 6 years ago when DH was management at an auto company in MI. Even then we were no higher than the 10% tax bracket. Yes, I'm THAT good. [/brag]

Originally Posted by Bahet

Where are you living that taxes increased so much more than they had every other year? I suggest you move anywhere else. We pay sales tax. Same as it's been the last 4 years. We pay property tax. That went up as the value of the house did (we bought low) but didn't go up as a percentage of the value. Gas tax, same as last year and the year before. Income tax, I do our taxes. We do ok but still get back everything we pay in and more for child tax credits. I think the last time we actually didn't get back every penny was about 6 years ago when DH was management at an auto company in MI. Even then we were no higher than the 10% tax bracket. Yes, I'm THAT good. [/brag]

Seems you just admitted the Republicans have done a great job since you have done so well while they were in office. LOL