Standing up for Big Oil, 2022 Edition
Whenever politicians like Biden beat up on the fossil fuel industry and charge that corporate greed is a major cause of spiking gasoline prices, they only show how stupid and craven they are.
Good.
Big Oil — in this case, Chevron — is fighting back against charges by President Biden and other Democrats that prices at the gas pump are averaging $5 a gallon around the USA.
Here’s what Chevron Chairman and CEO Mike Wirth told the Biden administration Tuesday about the relative cleanliness of American oil and gas producers.
American oil and gas supplies are among the most efficient, responsibly produced, and lowest carbon intensity supplies in the world. At roughly 15 kg of CO2-equivalent per barrel, Chevron’s Permian Basin carbon intensity is some two-thirds lower than the global industry average. U.S. Gulf of Mexico production has carbon intensity just a fraction of the global industry average.
Increasing American production will offset barrels produced in other parts of the world that may not support America’s energy security, economic competitiveness, or environmental goals.
I want to be clear that Chevron shares your concerns over the higher prices that Americans are experiencing. And I assure you that Chevron is doing its part to help address these challenges by increasing capital expenditures to $18 billion in 2022, more than 50% higher than last year.
Chevron and its 37,000 employees work every day to help provide the world with the energy it demands and to lift up the lives of billions of people who rely on these supplies.
Notwithstanding these efforts, your Administration has largely sought to criticize, and at times vilify, our industry. These actions are not beneficial to meeting the challenges we face and are not what the American people deserve.”
It’s an old story about political demagoguery from Washington.
The latest show trial where Big Oil is shamed is today (June 23) when oil executives meet in DC with Energy Secretary Jennifer Granholm, who has shown herself to be especially clueless about the industry she’s supposed to oversee.
Let’s hope Big Oil humiliates Granholm and shows how harmful the Biden regime’s anti-fossil fuel policies have been.
In 2008, when gas prices were crossing the $4 a gallon barrier ($5.40 a gallon in today’s money) and a barrel of oil was going for $130 ($175 in today’s money), I wrote this column urging Big Oil to fight back against the politicians who were attacking them.
The names have changed, but what I wrote is true today.
Message to Big Oil: Fight back
June 11, 2008
It's about time Big Oil started defending itself.
As any recent television viewer can attest, the American Petroleum Institute — the main lobbying group for the oil industry -- has launched a huge ad campaign designed to tell Big Oil's side of the $4-a-gallon gasoline story.
Aimed at one audience -- voters -- the multimedia, multimillion-dollar propaganda blitz is a necessary antidote to the misinformation and false charges we constantly hear about Big Oil from Big Media and our duly elected demagogues.
We've all heard about the alleged sins of Big Oil, the handy media-made pejorative for the world's largest oil and gasoline manufacturers:
It controls/manipulates the world energy market. Its six "supermajors " -- multinationals like ExxonMobil, Royal Dutch Shell, BP, Chevron -- are exceptionally evil and rapacious corporations that are responsible for skyrocketing oil and gasoline prices.
They are uniquely and grossly profitable. They deserve to have their "excess" profits taxed and their robber-baron bosses scolded -- if not publicly waterboarded -- by Congress.
A few weeks ago, when the Senate Judiciary Committee grilled five U.S. oil executives, some senators treated them like captured war criminals.
Demagogues like Dick Durbin scolded them for their high salaries, threatened them with windfall profit taxes and suggested brainless, environmentally correct ways for them to reinvest their companies' oil revenues.
The Big Oilmen defended themselves ably, mainly because they actually knew what they were talking about.
The oil execs warned, correctly, that government intervention will only make things worse — not that Sen. Durbin and his fellow grandstanders gave a care.
And they called on Congress, futilely, to allow more drilling and exploration for domestic oil on the vast swaths of federal land in Alaska and off America's shores that by law are off-limits to oil and gas development.
Many Americans have heard by now the truth that oil companies pay far more dollars in taxes each year than they earn in profits.
And that the oil industry's average net profit margin -- 8.3 percent last year -- is lower than Big Tobacco and Big Beverage (19.1 percent), Big Pharma (18.4 percent) and Big Banking, Big Insurance and Big Media.
But during their show trial, the execs delivered some other pertinent facts in their defense:
— U.S. companies, while huge, are actually relatively small players in a gigantic global oil market. They can compete directly for only 7 percent of available reserves while large government-owned companies like Petroleos de Venezuela own and control 75 percent of world supply.
As Stephen Simon of ExxonMobil humbly pointed out, his hated behemoth -- America's largest oil and gas corporation -- accounts for only 3 percent of global oil production and 6 percent of global refining capacity. It has only 1 percent of global petroleum reserves — 14th in the world.
Big Oil can take care of itself in Washington — and it always has. It has bought and paid for all the lobbyists and political patrons it needs. Big Oil is not perfect. And it doesn't deserve a dime in government subsidies or special tax breaks.
But with worldwide oil demand up, oil harder to get at and oil prices at $130-plus a barrel and maybe climbing, America needs Big Oil now more than ever -- no matter what environmentalists and liberal senators feel or think.
So instead of pandering to voters' ignorance, maybe Washington politicians should try to do something useful for once -- like helping Big Oil discover, extract and deliver the energy all earthlings still need to make their lives better.
***
In 2007 column I wrote in defense of Big Oil — ExxonMobil, specifically, and its ballsy CEO and future Trump Secretary of State Rex Tillerson.
My arguments then are the same as they’d be today — that we are lucky as hell to have well-run, profitable and environmentally conscientious companies like Exxon and Chevron powering our lives.
Standing up for Big Oil
Pittsburgh Trib
June 1, 2007
Fellow gas-guzzlers, rejoice.
ExxonMobil -- the world's best-run, most underappreciated and most foolishly hated energy company -- did exactly the right thing last week at its annual shareholders meeting in Dallas.
When climate cranks came to whine about ExxonMobil’s alleged corporate irresponsibility and try to get the company to accept the Gospel of Global Climate Change according to Al Gore, the oil behemoth's bosses told them to go fly a kite in a wind farm.
The hero was CEO Rex W. Tillerson, a business exec with old-fashioned testosterone who deserves every dime of the $8.4 million pay package he took home in 2006.
He stood up to dissident shareholders (climate cranks) who wanted his company to invest more heavily in alternative energy and to stop giving money to think tanks that question the shaky scientific and political tenets of catastrophic global warming.
ExxonMobil, Tillerson reminded everyone, was in the business of finding, drilling, refining and selling oil and natural gas -- not in the business of risking money to save the planet from bogeymen. Anyway, he said wisely, what's wrong with a little debate on climate change?
So say "Hallelujah!," lovers of Big Oil.
For another year, at least, ExxonMobil will remain Great Satan Oil Co. -- a mischaracterization that environmentalists and their equally irrational co-religionists in the media have worked overtime to promote.
The company has flaws, not the least of which is its annual acceptance of a couple billion in unnecessary government subsidies. But any schoolboy can see it is an amazingly efficient, productive business in a highly competitive and technologically trying industry.
Despite booming demand and ever-elusive oil supplies, ExxonMobil (and its smaller Big Oil siblings) keeps us supplied with the energy our advanced economies and lofty standards of living are built on -- and which our children and the Third World will need for decades.
But the prowess of ExxonMobil, which employs 82,000 worldwide, benefits not just consumers. More than 2 million individuals own at least one share of its stock, which has climbed from $56 to $84 since last June.
About 52 percent of the company’s 5.6 billion shares are held by 1,528 mutual fund companies and institutions like CalPERS, the California Public Employees Retirement System, which owns 30 million shares of ExxonMobil for its 1.43 million active and retired members.
The value of CalPERS’ stock has climbed about $900 million in the last year to $2.4 billion. Yet its idiotic officials still went to Dallas last week to complain about ExxonMobil’s failure “to address the business risks from climate change.”
Everyone over age 3 has heard that ExxonMobil made world-record net profits last year of $39.5 billion.
That’s incredible -- and red meat to U.S. senators and socialists of other stripes. But on gross revenues of $377 billion, it was a modest return: 10.5 percent.
For the perspective that too few mainstream media stories provided:
The average S&P 500 company netted 13.4 percent of revenues last year; PNC Financial Services netted 32 percent. Meanwhile, ExxonMobil invests $20 billion a year in capital spending for things like deep-sea oil platforms.
ExxonMobil won’t change much. My hero Tillerson will see to that. And no matter how hard climate cranks cry, that’s good news for those who live in the real world.