The Wichita Eagle (Kansas)
Have you seen the news? The Big Oil giants made record profits in the last quarter. Not just record profits — astounding profits, historic profits, jaw-dropping profits that make Bill Gates and Coca-Cola look like pip-squeaks.
Exxon Mobil Corp. posted a quarterly profit of $9.9 billion — the largest in U.S. corporate history — a 75 percent increase. ConocoPhillips reported profits up 89 percent. Shell raked in 68 percent more.
Pass the cigars, boys!
It’s enough to restore your faith in free enterprise.
They did it the old-fashioned way: by having an underregulated monopoly. And a little help from their friends in the White House and Congress.
Oil companies have given millions in campaign contributions in recent years, with 80 percent of the money going to Republicans.
Give Big Oil this — it knows how to pick a gusher.
Vice President Dick Cheney famously held secret meetings with oil company bigwigs to shape our “comprehensive national energy policy,” which it turned out is very comprehensive if you’re Exxon Mobil or Shell.
Just a few months ago, the Republican-controlled Congress passed an energy bill laden with early Christmas goodies for the oil and gas industry — $6 billion in tax breaks and subsidies.
Then in early October, in response to Katrina, the House passed another bill offering mothballed military bases as oil refinery sites, compensation for delays in refinery construction and — well, you get the idea.
It’s an embarrassment of riches.
Winter of discontent
Meanwhile, Americans face a winter of discontent, with heating oil and natural gas prices expected to soar.
Thousands of people left homeless by Katrina could enter the ranks of the permanently homeless, according to one recent news report. And Congress is contemplating big cuts in food stamps and other programs for the poor and needy and politically unheeled.
Frankly, it’s a little embarrassing.
In fact, Republicans are so worried about a voter backlash that they’re scrambling to put on their oversight hats and give stern lectures about “duty” and corporate responsibility.
Sen. Charles Grassley, R-Iowa, even wrote a letter this week to oil executives, saying that he was trying to “shame” them into contributing to the federal low-income heating assistance program, funded at $2 billion or so last year. Critics say it will need double that amount this winter to meet the soaring need.
Build new refineries
Others in Congress are calling on oil companies to reinvest in building new domestic refineries.
The lack of refining capacity, say analysts, is one reason supply can’t keep up with demand — and that keeps prices high. No new domestic refinery has been built in 30 years.
Blame those pesky environmentalists, right? Not so fast, according to Jamie Court, president of the Foundation for Taxpayer and Consumer Rights, who says oil companies deliberately reduced refining capacity in the 1990s to boost their profits.
When a disaster like Hurricane Katrina hits, there is no reserve to tap into and — ka-ching! –gas prices go through the roof.
Despite sitting on a mountain of cash, the oil companies have no refinery plans — they don’t want to rush into anything.
Oh, sure, this is a complicated bidness. No one can ever seem to figure out the tangled factors that cause gas prices to rise and fall.
I’m certainly no expert. But I’ve noticed an interesting thing: When Congress starts calling for investigations of oil profiteering, the gas prices at the pump magically start going down.
And when holidays come around, prices magically go up.
Am I imagining that?
Don’t get me wrong. I’m all for oil and gas companies making a decent living.
But really — these latest profit figures would make Donald Trump swallow his tongue.
Electric companies are required by state regulators to maintain excess capacity to generate electricity in case of emergencies.
Why shouldn’t oil companies also have to maintain some excess capacity? Or
invest more in alternative energy?
And is it too much to ask energy companies that have received so much from Americans to give a little back, especially to the poorest and neediest?
Analysts agree: The era of cheap gas is over.
If so, Americans and their elected representatives should agree: The era of a free ride for Big Oil is over, too.
Randy Scholfield is an editorial writer for The Eagle. His column appears on Fridays. Reach him at (316) 268-6545 or [email protected]