Wednesday, May 21, 2008

Saudis & Big Oil Not Responsible for High Oil & Gasoline Prices?

Last week, the Saudi Monarchy noted oil supply to be in line with demand. It defended then $120 a barrel oil saying, "none of our customers are asking for more oil". So what if U.S. President George W. Bush asked for lower prices. Does America getting 14% of our daily addiction from the Saudis mean we're not a customer?

OK, so a major oil producer begs off on its role in ever skyrocketing oil prices, now over $130 a barrel. That means the oil and gas companies play a role, right? Not according to oil execs testifying before Congress. Their ever rising annual profits have no impact. So what if Exxon Mobil's rose 17% from last year. BP is up 60 percent; Shell, 25 percent; ConocoPhillips, 17 percent; and Chevron profits rose 10 percent. Those are just the fruits of capitalism.

Does anyone remember the 2005 Energy Bill, signed to great acclaim? President Bush said the following:

The Energy Policy Act of 2005 is going to help every American who drives to work, every family that pays a power bill, and every small business owner hoping to expand.

The aforementioned oil executives first appeared as a group before Congress on Nov. 9, 2005 -- when oil had risen to $58.93 a barrel. Just four months later, they were back testifying before another committee. By then, oil had climbed to $63.10.

Since George W. signed the Energy bill to help every American, oil more than doubled. Why isn't the program working? Does that portend gloom and doom for the President's economic stimulus, the $600 per person tax rebate? If his comprehensive energy policy did little to impact oil prices over a multi-year period, what chance does his tax refund have? It looks like American families will spend it on gas, the power bill, and on the checked bag fee when they fly.

It looks like the Saudis and Big Oil are doing just fine, making hay in the sunshine. They'd best beware, I feel an ill wind blowing that could turn their fertile fields into a dust bowl.

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