A Bostonian's Perspective on Big Oil (It's not what you think!)

In the wake of last week's post about Senate showboating hearings on oil and gas industry profits, I received a note from David Gerstman who blogs via several outlets, most notably Israpundit and Soccer Dad. David passed along a link to a column by Jeff Jacoby entitled "Big Oil's Real Profiteers" that appeared in the November 13th edition of the Boston Globe.

As David pointed out in a subsequent email, Jacoby is the Globe's "token conservative," but it's nice to know that the paper has even one. Anyway, Jacoby's column describes the financial risks of being in the oil and gas business, and the rather plebian returns made by the industry, compared to other businesses, on his way to identifying the real "fat cats":

In fact, the real gas and oil profiteers weren't represented by the CEOs getting grilled on Capitol Hill last week, but by the demagogues doing the grilling. Over the past 25 years, according to the Tax Foundation, oil companies paid state and federal taxes of more than $2.2 trillion (in inflation-adjusted dollars). During the same period, the companies' profits totaled $630 billion -- less than a third of the government's take. Government revenue from gasoline taxes alone has exceeded oil industry profits in 22 of the past 25 years.

If Gregg and his colleagues want to see what America's greediest oil fatcats look like, they can find the answer in the nearest mirror. Will they do anything to rein in those money-grubbing villains? Don't hold your breath.

Read the whole thing. It's a piece that could have -- and probably should have -- come from the Houston Chronicle or the Dallas Morning News or the Midland Reporter-Telegram. Still, it's nice to know that not everyone in the northeast has an agenda that mandates ignorance of the facts.

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Comments

Eric, bear in mind, that the some parts of the northeast DO know about the workings of oil and related industries. After all, America's first oil well was not in Texas, but in my own home state of Pennsylvania.

States like New Jersey and Delaware are more than a little familiar with the refining, and petro-chemical manufacturing businesses.

And long before the west assumed the mantle of energy provider to the nation, the northeast was doing it through 'King Coal.'

It brought a lot of prosperity to our communities, but it also brought a lot of damage ... and this at a time when the energy companies were accountable to none but their top leadership.

Though I often hear Texans bristle at being painted with a broad brush of generalization, they are often quick to grab the brush, themselves, and apply it to other parts of the nation. Anyone who thinks there's little or no conservative voice in the northeast never experienced life in Chicago under the old Mayor Richard "American Caesar" Daley, or Philadelphia under Mayor Frank "Super Cop" Rizzo. Though Democrats, they practiced a brand of conservatism that would make some Midland Republicans look like parlor pinks.

That conservatism is found in all facets of society in the northeast, including the media. I don't say it's good, I don't say it's bad. But I am encouraged by the greater diversity of thoughts, experiences and attitudes one finds in our northeastern U.S. communities.

Posted by: Jeff at November 16, 2005 06:24 PM

Jeff, I think we differ in our definition of what makes up the "northeast." Actually, I would have been more accurate to have referred to New England, as that's the general area I had in mind.

Also, the distorted view of the oil industry is not [always] a "conservative-vs-liberal" issue. In fact, you introduced those terms to this post, not me. But the main thrust of both posts was the political grandstanding before constituencies without having the benefit of the mastery of basic economic and financial concepts and facts.

Posted by: Eric at November 16, 2005 08:30 PM

Eric, you're absolutely right ... New England is like 'a whole other country' (to borrow a phrase) from the rest of the northeast ... and, the first half of my post, really, does not apply to it very well.

As for the second half of my post, I was responding to your remark about, "'token conservative,' but it's nice to know that the paper has even one ..." If I took that too far, I apologize.

Science Fair was fun ... we should whistle up some of the other bloggers for next year's. I saw Wallace liked the idea ... and can you imagine Burr with the Life Science projects?

Posted by: Jeff at November 16, 2005 09:41 PM

My 2 cents....

I do think that it is America in general that has not a clue about how the oil [energy] industry works, the risks and rewards, who profits and by how much. I can't tell you the number of those stupid emails about boycotting Exxon [etc.] gas stations I've received even from good friends in Texas.

Be glad to help with Science Fairs.....have judged a fair amount of them in the past.

Posted by: Wallace-Midland, Texas at November 16, 2005 09:47 PM

Why not a windfall tax on homebuilders?

Posted by: WC Varones at November 20, 2005 09:25 AM

WC, your argument is valid in that it shows that the idea of penalizing an industry for being profitable -- especially when that industry is subject to the vagaries of commodity pricing -- is a game of politics and emotions. You could extend the same argument to pharmaceutical companies, or a whole host of other industries.

Posted by: Eric at November 20, 2005 02:21 PM
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