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By Robert Rapier on Aug 1, 2011 with 114 responses

‘Tis the Season for Oil Company Misinformation

In my travels around the globe, I have never been to another country that regards their oil companies as we do here in the U.S. I have actually been in countries where people view their domestic oil companies as a source of national pride. Here in the U.S., the average person on the street views our oil companies as vile, greedy parasites on taxpayers that should be tarred, feathered, and run right out of the country. While this belief is commonly held among Democrats, even staunch Conservatives like Bill O’Reilly have gone on anti-oil company rants, while offering suggestions like “American oil companies must supply the federal government with a written explanation every time they raise the price of gas and oil.”

Why It Matters to Me

But why should I care? Well, I care because ignorance is the basis of bad energy policy decisions. Bad energy policy decisions are likely to lead to higher levels of oil imports, which will hasten the demise of the U.S. as a superpower. (Lots of bad decisions are contributing to our slide toward mediocrity, but record trade deficits brought on by record flows of money to oil exporting nations are a contributor).

But I also care because I used to work for an oil company, and therefore I take misinformation directed at the oil industry somewhat personally. As I learned how oil companies really worked, I felt compelled to explain to people why their perceptions were wrong. It pained me to see so many hard-working people — people who provide the energy that most people use every day to move around the world — treated with such revulsion. As someone once said to me “It isn’t the oil company employees that we are angry with. It is the oil companies themselves.” The problem with that explanation is that the oil companies are the employees that work there and the shareholders that own stock (which is probably you if you have an interest in a pension fund – see Who Owns Big Oil).

Don’t Marginalize if You Have No Replacement

Let me be clear that I want to see the world reduce dependency on oil. In fact developing replacements for oil is the basis of my job. But my fear is that before that day comes, we will simply marginalize our domestic oil companies, and while we are still heavily dependent on oil, that dependence is shifted to an even greater degree to foreign oil companies like Saudi Aramco. So I think it is a bad idea to put policies in place that will give foreign oil companies an advantage over domestic oil companies — and many of the proposals that are frequently floated would do just that.

HuffPo: A Fountain of Misinformation

Last week earnings were announced for several major oil companies. Any time oil prices are high, earnings for integrated oil companies are likely to be high. And that is going to lead to consumer anger, which is often fueled by a steady dose of misinformation. Huffington Post just published a story on ExxonMobil’s earnings, and the comments following the story demonstrate a stunning level of ignorance about oil companies. And it wasn’t just a few people; the article had 3,500 comments in just a couple of days and the majority were happily spreading the sort of misinformation I highlight below:

Big Oil Companies Post Huge Profits On High Gas Prices

Even the title is somewhat misleading. High oil prices are driving the bulk of the profits; pure refiners like Valero also saw earnings increase, but not like those of oil producers. Some of the article is correct, some of it is most certainly incorrect, and much of it is misleading. It is definitely intended to be inflammatory. Taken as a whole, the article and the comments following the article provide ample evidence for my recent claim that Democrats are really misinformed about energy (the readers and writers of Huffington Post are overwhelmingly Democrats).

What is correct is that oil companies are making big profits, and those profits are coming out of consumers’ pockets. But numerous issues that the article raised around those points are wrong, and it is that sort of misinformation that helps keep the public so angry over this issue. So what I would like to do here is take 10 points from the article itself or the comments following the article and either provide accurate information, or at least context for the claims.

1. Taxes

The article implies that oil companies don’t pay a fair share in taxes, quoting Congressman Ed Markey as saying “it’s time for the oil companies to do their part and contribute to solving our debt crisis.” But this issue really took on a life of its own in the comments, where numerous people claimed that oil companies don’t pay any taxes to the U.S. government. For example They pay taxes to foreign nations and they pay state and local taxes…to the Federal coffers…­not a dime and Exon Mobil did not pay any nit-wit.”

I suppose I would be pretty angry too if I thought that not only are we subsidizing oil companies with tax dollars, and not only are they reaping profits at our expense — but they don’t pay any federal income taxes while the country struggles with a budget crisis. Yes, that would be shocking and cause for anger if it was true. But it isn’t.

This claim seems to have originated with a 2010 article in Forbes called Big Oil’s Tax Bill. In that article, the writer stated that in 2009, ExxonMobil (XOM) paid no U.S. income taxes. In a follow-up article, the writer had to back-peddle as the context became clear:

“My mistake was in thinking that these figures somehow reflected actual tax benefits and liabilities. So what we should have written was that ExxonMobil “recorded” no U.S. income taxes for 2009 instead of “paid.” All you re-bloggers out there, please note the clarification. Mea culpa.”

For the “re-bloggers”, this didn’t matter much, as the original claim had a life of its own and soon became conventional wisdom: ExxonMobil doesn’t pay federal income taxes. Senator Bernie Sanders repeated this claim on the Senate floor: “Last year, ExxonMobil made $19 billion in profit. Guess what. They paid zero in taxes. They got a $156 million refund from the IRS.” (Politifacts investigated and said Senator Sanders was misleading “at best” and rated the claim false).

It is simple enough to address this claim. I merely linked to ExxonMobil’s SEC filings that show the breakdown of the taxes they paid in 2008, 2009, and 2010. Those SEC filings give an interesting picture of ExxonMobil’s operations. First, they show that ExxonMobil’s global income tax bill is very high: $36.5 billion in 2008, $25.9 billion in 2009, and $28.5 billion in 2010. Their foreign tax bill is much higher than their U.S. tax bill, but they do the majority of their operations outside the U.S. and are taxed on their earnings wherever they earned the money.

But then it does show their 2009 U.S. federal tax obligation to be negative $156 million. Their 2008 federal obligation was $3.4 billion and their 2010 federal obligation was $1.3 billion. ExxonMobil has stated that the reason for the 2009 obligation is that they make estimated payments on taxes due, and they had overpaid for the previous year (or years). Therefore, it wasn’t that they didn’t have a tax obligation, it was that it had already been (over)paid. It is similar to why people get tax refunds. The government isn’t giving you money, you overpaid your tax bill during the year. And if you made a lot of money in 2008 and then a lot less in 2009 (XOM’s 2009 profit was less than half their 2008 profit), you could find that the refund from your 2008 taxes was greater than your 2009 obligation. That doesn’t mean you didn’t pay taxes. It is just a reflection of when you paid them.

A related claim is that ExxonMobil only pays a few percent of their income in taxes. Some who make this claim take their worldwide earnings and only apply their U.S. tax obligation to those earnings. That is disingenuous because it doesn’t capture the fact that the U.S. is a minor part of their global operations (XOM recently put U.S. earnings at under 6% of their total earnings), and that they earn most of their money and pay most of their taxes in foreign countries. Thus presenting U.S. taxes against overall earnings paints a false picture.

One article floating around from the Center for American Progress quotes a Center for Tax Justice report that claims XOM only paid 0.4% in federal income taxes and their U.S. tax bill the past two years was only $39 million. A look at their SEC filings shows that this is blatantly false. With fictional reporting like this, it is no wonder people feel the way they do about oil companies. But people with an agenda aren’t interested in the truth if it conflicts with their agenda.

2. Subsidies

The article claims that oil companies receive “$4 billion to $8 billion a year in deficit-increasing tax subsidies.” People got really carried away with this in the comments. Not only are the oil companies not paying any taxes, but they are being supported entirely by the subsidies taxpayers are providing them. A typical comment following the essay: “Folks, listen up! This is our tax money that we pay that is subsidizin­g these greedy no good SOB’s! They have the gall to be charging close to $4 a gallon!”

Several problems with this one. First, people’s responses indicated that they seem to believe these “subsidies” are cash payments to oil companies. In fact, as I documented previously, the subsidies are tax deductions that in most cases are identical to the tax deductions that other companies — including companies with far higher profit margins — receive. In the case of oil companies, they would amount to about 1.8 cents a gallon — a drop in the bucket relative to both oil company profits and the taxes they paid.

The question nobody seemed to be interested in was “What are these subsidies, and what is their intended purpose?” If you learn that the subsidies are mostly standard tax deductions or that their purpose is to keep manufacturing in the U.S. (and thus increase tax revenues), the narrative is much less interesting.

3. Oil companies control oil prices

For example: “There is no way that anyone can deny that the BIG 5 oil companies collude to drive gas prices and profits higher.”

It seems to be hard for people to understand that the profits of oil companies in the U.S. are not a result of them raising oil and gas prices. Their profits went up because oil and gas prices went up. They have cause and effect mixed up. It’s the same reason corn farmers make more money when corn prices go up. The truth is that ExxonMobil — with 3% of the world’s oil production capacity — can do very little to impact global oil and gas prices.

But aren’t the oil companies profitable enough that they could give everyone a break on their gasoline prices? There are two flaws in that line of thinking. First is that even though there is speculation in the market, oil prices are a reflection of supply and demand. The growth in the economies of India and China ensure that high oil prices are here to stay, even if there are some short-term corrections. So high prices are a signal to consumers to use less and a signal to producers to produce more. Low prices and high demand are a recipe for shortages caused by over-consumption.

But to illustrate the other problem with that line of thinking, consider this analogy. You buy a $100,000 home in a neighborhood and then the price of the average home quadruples over the next 10 years. You decide that you aren’t greedy, and you are satisfied with selling your home for $200,000, even though comparable homes are selling for $400,000. This would be like ExxonMobil deciding to sell gasoline for $1 a gallon below their competitors. What happens in this case? In cases like this, some other person is going to snap that home up for $200,000 and resell it for $400,000, capturing the profit that would have been yours. Prices aren’t set in a vacuum. Most people don’t just decide to sell a $100,000 home for $400,000 or $50,000, they sell it based on what the market is paying.

The same is true for oil prices. Even though they benefit from high prices, there isn’t too much an ExxonMobil can do to influence the global price of oil, and that has the biggest influence on the price you pay at the pump. OPEC on the other hand is a different story; they could drive oil to $200 overnight by withholding enough from the market. But no U.S. oil company controls enough oil to have much influence.

4. Apple versus the oil companies

There were a number of comments comparing Apple to the various oil companies. Apple indisputably has much higher profit margins than the oil companies, but people admire them because as one person said “they produce something useful.” Of course Apple’s products are largely made from oil, but that’s another story (a 3G phone requires 1.7 gallons of oil to produce and distribute). Here are some of the comments on Apple: One person claimed that Apple has a higher effective tax rate than do oil companies: “The oil companies are given tax breaks at virtually every stage of production­, paying an affective tax rate of 9%. Apple effective tax rate 24.4%.”

This person’s mistake was in comparing one type of tax — the tax on capital equipment — to an overall tax rate. Looking back to ExxonMobil’s SEC filings, their effective tax rates in 2008, 2009, and 2010 were 46%, 45%, and 47% — almost double that of Apple. The reason for this is that they simply have to pay taxes that Apple does not have to pay, and in some cases they don’t receive the same tax deductions that Apple does receive (see Point 6 below).

5. Apple employs more people

Another person claimed that Apple employs more people than the oil companies: “Apple employs a lot more people than any oil company. The insane thing about oil companies is how much money they make relative to the comparativ­ely miniscule amount of labor force required to operate.”

It is amazing how often people just make things up. Apple employs “46,600 full time employees and 2,800 temporary full time employees worldwide.” Exxonmobil employs “over 82,000 people worldwide.” In 2010 Apple earned $14 billion on sales of $65 billion (21.5% profit margin by that metric, and profits of $300,000 per full time employee). In 2010 ExxonMobil earned $30.5 billion on sales of $370 billion (8.2% profit margin, and profits of $372,000 per full time employee).

6. Apple doesn’t receive subsidies

Several people claimed that the difference between Apple or Google and XOM is that the former don’t receive subsidies: “Apple isn’t subsidized with tax money, that is the difference­.”

In fact, Apple receives a 9% tax deduction from Section 199 of the tax code. Oil companies are limited to a 6% deduction from Section 199, which has been called the single biggest oil company subsidy. So Apple not only receives some of the exact same “subsidies” (although I don’t really consider a tax deduction a subsidy), they get a bigger deduction despite having much higher profit margins (which again is reflected in the relative effective tax rates).

7. Oil companies aren’t investing in their business

The article claimed: “Rather than invest their profits in such things as product development, new facilities, hot talent or research — things that could create jobs, improve consumer offerings and accelerate alternative energy production — three of the five big oil companies are spending large amounts of that money buying back shares of their own stock.”

ExxonMobil invests $25-$30 billion a year back into their business. This from a company that earned $30 billion in 2010. Other oil companies have similar investment profiles. The oil business is very expensive, and those big profits are made possible by big investments in capital, R&D, and even into renewable energy. You may have read of ExxonMobil’s $600 million algae bet. (That’s really not quite accurate to call it $600 million, but it is one example of many in which oil companies are investing in renewables). So Dan Froomkin — the author of the article — is either grossly misinformed or simply spreading half-truths. (It is true that they are buying back stock, which is why it is a half truth instead of a full lie).

8. Oil companies spent over $1 billion in lobbying

The article claims that “the oil and gas industry is enormously powerful on Capitol Hill, spending over $1 billion in lobbying since 1998.”

Per the linked source in the article, the oil industry did spend $1.15 billion in lobbying over the span of 14 years. So a trillion dollar plus industry spent an average of $82 million a year on lobbying. A couple of things. First, all you have to do is read the article and the comments to see that oil companies will have to do at least some lobbying to combat the sort of misinformation people like Froomkin spread. But of course they lobby for things in their own self-interest, just like other companies. At the same linked source, you find that the pharmaceutical industry spent twice as much money as the oil industry on lobbying, and the insurance industry, electric utilities, business associations, and computer and Internet industry all spent more money on lobbying than did the oil industry.

During various ethanol debates, I always maintained that the agriculture lobby is bigger than the oil lobby. But for some reason, the link does not list the ag lobby in their Top Industries list for lobbying. But if you look at their detailed statistics, agriculture spent more money over the past 14 years than did the oil industry: $1.4 billion for agriculture versus $1.15 billion for oil companies. That would rank agriculture #4 on the list over the past 14 years. In 2010, the agriculture industry spent $121 million, had 473 clients, and employed 1,151 lobbyists. By contrast, the oil industry spent $145 million (their spending was higher than agriculture’s in 2010, but was lower in most years), had 200 clients, and employed 798 lobbyists. So, by most measures (historical spending, number of lobbyists, number of clients) the ag lobby is bigger than the oil lobby.

So the claim is true, but misleading: Oil companies did spend over $1 billion in lobbying over that 14-year time frame. But without context the claim is grossly misleading by not showing that oil companies were pretty average relative to other industries with respect to their lobbying efforts. This, despite being larger than many of these other industries, but more importantly despite facing much more open hostility from one of the political parties that would seemingly be happy to legislate them out of existence.

9. Oil companies should be nationalized

This one was pretty popular in the comments following the article. But as Ed Markey was quoted in the article “America is swimming in debt while oil companies are swimming in profits.” Now that’s a strong endorsement for the government to run the oil companies, isn’t it? Our government has shown themselves to be such good stewards of managing our tax dollars. Perhaps after a few years of government administration, the oil companies will also be swimming in debt and teetering on default and everyone will be happy.

10. Renewable energy creates more jobs

Actually, this one is true, but most people likely never stop to consider why that is. With fossil fuels, nature already grew the biomass, harvested it, and used the temperature and pressure of the earth to chemically convert it into an energy dense form of energy like oil. Humans are left to collect that energy dense material and convert it into usable energy.

With renewable energy, humans must do the planting, growing, harvesting, and then ultimately process it into usable energy. Because humans are engaged in more steps of the process than in fossil fuels, it necessarily takes more people to produce one energy unit of renewable energy against an equivalent unit of fossil fuels. This is a big reason why renewable energy has long been more expensive than fossil energy. It probably won’t be that way forever, and it isn’t true in every single case. As fossil fuels become ever harder to reach, I believe that more renewables will compete on a level playing field. And maybe some day when oil is much more difficult to extract it will take just as many people to produce a barrel of oil as it does to produce a barrel of renewable fuel.

Conclusions

The biggest takeaway from all of this is that people are grossly, horribly misinformed about oil companies. But another big lesson here is that they don’t seem to care. Often, when I would engage someone to correct them on one point or another, they would simply ignore the correction and toss out another bit of misinformation. People just weren’t really interested in getting to the truth of the matter. They “know” oil companies are bad, and they won’t hear anything to the contrary.

Most of these people likely can’t imagine what their life would be like without the oil that is produced, refined, and turned into fuel, plastics, and medicines. In the U.S, the idea that oil companies are parasites with few redeeming qualities is so embedded in many people that it would likely take a serious oil shortage — and a realization of just what life will be like without ample supplies of oil — before attitudes change. This is doubly-true since one of our major political parties has long considered the demonization of the oil companies to be a great way to win votes. But they should be careful what they wish for, because life won’t be as pleasant as they think if they drive our domestic oil companies out of business or out of the country.

Related Articles

Getting Even With ExxonMobil

Getting to the Bottom of ExxonMobil’s Taxes

Debunking Five Myths about Gas Prices

Democrats and Energy Policy

Breaking Down Gas Prices for Whoopi Goldberg

  1. By armchair261 on August 1, 2011 at 3:39 pm

    Bill O’Reilly said:

    American oil companies must supply the federal government with a written explanation every time they raise the price of gas and oil.

    An astonishing statement by a public figure. Which just goes to show that intelligence isn’t a requirement for celebrity status.
    I’m wondering what time frame O’Reilly has in mind. I am, for example, looking at today’s WTI ticker. Does he think there should be a collective memo every 30 seconds? Every minute? Every hour, day, or week? A memo from every service station in the country every time they put up a new number on their boards? Wow. Great stuff.

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  2. By Douglas Hvistendahl on August 1, 2011 at 7:41 am

    Misinformation is part of the problem. My wife & I prefer to work on solutions: a backyard garden cuts oil use and repays the time used; fans blow summer air through the basement cutting our cooling bill (use a dehumidifier!!!) and after several years makes a noticeable dent in late fall heating bill; we are installing an attic to soil pumped water loop to harvest summer heat; checking on MPG before buying a vehicle pays; bicycles for local transportation in good weather (with large baskets). And there are other ways – my sister’s family has to do some rebuilding after that last wind storm dropped a tree on part of their house and are planning to install a heat pump system as part of the rebuild.

    “We have met the enemy, and they is us” – Pogo. But we can be the solutions also, if we are willing to think based on facts!

    PS Did you know they now have an absorption type heat pump that is so efficient that when you figure in conversion and line losses for electricity, it is more efficient than an electrical heat pump? Search on (“triple effect” AND absorption). Natural gas, propane, or solar can run it. In India, they have designed and built one of these planned to use solar energy.

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  3. By ty on August 1, 2011 at 7:42 am

    1. You are biased.
    OR
    2. You are a liar.
    OR
    3. BOTH

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  4. By armchair261 on August 1, 2011 at 12:06 pm

    We need more articles like these, but I don’t think we’re going to get them. Popular media like the NY Times wouldn’t consider touching a serious analysis of the energy industry.

    I’ve had many such discussions with people like ty here, and I’d say that at best 5% of this crowd is even willing to engage in an rational and thoughtful discussion of issues. At the end of the day, the “conversation” always degrades into ignoring facts and charges of consorting with the enemy. It’s instructive that ty couldn’t come up with a fourth scenario, i.e. that the author could be correct. When prodded, the result is always the same: the ty’s of the world have no expertise, and never have evidence to support their charges.

    I’ve often thought that the industry should take a more aggressive approach to some of the more blatant cases of misinformation… lawsuits against the likes of OilWatchdog, for example. However, it would probably backfire as a hostile press spins the story for the benefit of equally hostile readers. The national attitude towards the industry reminds me of McCarthyism or Salem witchcraft trials: bordering on the bizarre.

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  5. By rrapier on August 1, 2011 at 1:16 pm

    ty said:

    1. You are biased.

    OR

    2. You are a liar.

    OR

    3. BOTH


     

    Of course I am biased. I am biased toward accurate information. Other than that, your response is pretty much what I expect: Hot air with no substance. If you think I am a liar, start listing your arguments.

    RR

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  6. By paul-n on August 1, 2011 at 1:17 pm

    Really, if (American) people hate Big Oil so much then they should just stop using their product – it’s that simple.

    And if they can’t stop using their product, because they “have to drive”, then maybe they might think about it for a second and be grateful that the product is always available where and when they need it.  

     

    It is amazing that Bill O’reilly would say something like;

    American oil companies must supply the federal government with a written explanation every time they raise the price of gas and oil.

    Did he really believe what he was saying?  If, after setting up the ridiculous bureaucracy to do this, the government then rejects the move, what happens of the oil companies then decide to simply stop selling?  

    O’reilly heats his own house with heating oil – truly the most wasteful use of oil possible.  I wonder what he would think if the oil co’s simply decided they were exiting the heating oil market because at the “government approved price” they are unprofitable?

    There’s two sides to a market – buyers and sellers, the buyers can always decide not to buy, but if the government starts to control prices, then they must be prepared for sellers to decide not to sell.  The last time that happened in a big way in 1973, it wasn’t too popular.

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  7. By rrapier on August 1, 2011 at 1:19 pm

    Brob0405 said:

    One thing this author did not mention in this article is the fact that oil companies do receive a huge subsidy that no other industry enjoys.  They have the US military to handle their business in foreign countries. 


     

    That isn’t an oil industry subsidy so much as it is an overall consumer subsidy. Or was intended to be; it iddn’t really work out all that well. We were pretty much squeezed out of doing any business in Iraq after all. Other countries outbid our oil companies on doing business there.

    RR

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  8. By Earl Richards on August 1, 2011 at 1:27 pm

    Ian Random said:

    Excellent article. Also one of the problems I seem to hear is that oil companies can depreciate their wells and that is considered a subsidy.

    Brob0405,
    Remember we were buying oil from them both before and after the regime change in Iraq. If anything, now the money will go to the people and not be spent on lavish mansions.

    “…Saddam Hussein raked in $1.7 billion in kickbacks from participating companies and $11 billion in oil-smuggling profits.”

    http://www.washingtonpost.com/…..01646.html

    Earl Richards,

    If the ICE is so powerful, why does the price of oil drop? Why isn’t it always $10/gallon?


     

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  9. By Steve Funk on August 3, 2011 at 1:27 am

    http://thinkprogress.org/romm/…..nvestment/
    Robert, have you seen Joe Romm’s claims that the debt deal will undercut important government energy research? I am curious about just what is likely to be cut, and how significant the government contributions really are.

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  10. By Earl Richards on August 1, 2011 at 1:29 pm

    The energy traders and speculators in the Intercontinental Exchange reduce the number of “round-trip” trades.

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  11. By armchair261 on August 2, 2011 at 8:14 pm

    Earl,

    As RR said, oil prices continued to fall after the election. They hit bottom during the week of December 26, almost 2 months after the election.

    Additionally, oil fell by about 70% all over the world, not just in the US, and the fall did not just affect American companies. At prevailing rates of production and price, comparing the July peak to the December low, you’re saying the world’s oil industry all agreed (every single CEO!) to forego 85 million barrels per day * $110, or $9.4 billion per day, to re-elect a Republican president. Keep in mind that the rest of the world produces about 94% of the global oil supply. So you’re saying that Chavez, Putin, and Ahmadinejad would have kicked in, respectively, about $275 million, $1.1 billion, and $500 million per day (and a few extra months for good measure as a cover up), because they wanted a Republican president. I kind of doubt it. :-) A pretty foolish bet, especially considering the polls at the time. If I ran an oil company, I sure wouldn’t have joined the scam. Would you have?

    I am arguing that price changes should be approved by the government and regulatory commissions

    How often? Go check the oil price ticker. Prices are changing constantly all day. What do you think would happen to US supply when congress put a $90 ceiling on oil prices, if oil was selling for $120 in other countries?

    A small number of bad people control the oil market, more so, then, the other commodity markets, because there is more money to be made in oil.

    I see. Nobody wants to make money on other commodities. OK. :-) I always wondered why that was, thanks for the lucid explanation!

    And what about natural gas? That’s a $100 billion annual business. Why are prices down by 50%? Same companies, same exchanges.

    You need to think a little more critically. You’re just uncritically accepting simplistic ideological slogans as explanations.

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  12. By EarlRichards on August 2, 2011 at 8:31 pm

    Robert Rapier said:

    EarlRichards said:

    The oil prices dropped in the fall of 2008,  because of the election. ICE lowered the price so it could not used as a campaign issue against the Republicans and Big Oil.


     
    Earl, you should check historically. You will find that oil prices drop in the fall almost every year. The reason is that demand drops after summer and winter gasoline specs kick in which increases the overall supply pool. Not an election year thing, a fall thing. See my essay Refining 101: Winter Gasoline.

    RR


     

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  13. By Dave W on August 2, 2011 at 8:52 pm

    Here is a personal story relating to Exxon profits: My grandfather worked for Humble Oil and Refining for many years and participated in an employee stock purchase plan in a modest way. The company at some point became part of Exxon. My mother who is now 91 years old was one of three siblings who inherited the stock which had grown over the years through splits. She now gets about $5000 per year in dividends which helps to supplement her Social Security. So when people talk about Exxon making too much money, do they want to take money away from my mother? She is certainly not rich.

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  14. By rrapier on August 1, 2011 at 1:33 pm

    armchair261 said:

    I’ve often thought that the industry should take a more aggressive approach to some of the more blatant cases of misinformation… lawsuits against the likes of OilWatchdog, for example.


     

    I saw an article earlier in the year — and linked to it in fact in this story — that claimed XOM was paying federal taxes at the rate of 2.3%. It has since been removed, and no mention of XOM can be found on that site. I suspect an aggressive approach was taken in that situation of blatant misinformation. I am like you; I would go after these guys for spreading false information, which stokes anger.

    RR

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  15. By armchair261 on August 1, 2011 at 1:53 pm

    Earl says:

    The energy traders and speculators in the Intercontinental Exchange reduce the number of “round-trip” trades.

    I would like to hear your comments on the following in the context of your reduced round trip trades” model.

    1) Oil prices often fall. You evaded Ian’s question. Oil dropped by about 70% in fall 2008 through early 2009. It fell by about 10% last April. Why? How?

    2) Other commodities rise and fall, often correlating with oil prices, but often not. In the past 12 months, for example, oil is up by about 50%, while some commodities like wool, corn, and wheat are up by 100% or more, and (to defeat the simple argument that oil drives all commodities prices), others like poultry, soft wood, bananas, and rebar are flat or even negative over the same period. Do your imagined bad people only want to make money on some commodities and not others? Is it acceptable and explainable that some commodities rise more than oil? Are you arguing that price changes should be simply linear with demand or supply changes?

    3) Natural gas is, like oil, traded on futures exchanges, including ICE. It’s produced by largely the same companies that produce oil. And yet natural gas is down 6% over the past 12 months, and has been selling for about 50% less than its mid-2000′s average for the past several years. You’re suggesting that a small number of bad people can control the world’s oil markets, but that they can’t control the much smaller US natural gas market (or don’t want to). Please explain.

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  16. By Dave Runyon on August 1, 2011 at 2:18 pm

    Great article RR! Really a treat to read logical arguments with links for background reading if desired.

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  17. By addoeh on August 1, 2011 at 2:20 pm

    1. Taxes.

     

    It’s strange.  Despite all the talk and rhetoric about corporate taxes, one group has been silent about it.  That group is the IRS.  I can only guess their silence on the subject means they are satisfied with the taxes big companies pay.  So it seems if you are upset with the amount of income tax corporations pay, your anger should be with the laws and lawmakers that allow them to do it.  

     

    3. Oil companies control oil prices

     

    If, as some suggest, the large oil companies simply lower the cost of gas by a dollar, wouldn’t that be considered price fixing?  Isn’t that illegal?  If it happened, it would only hurt the smaller gas companies that don’t produce any oil, but instead either refine it or sell it to the end consumer.  They would either have to match the price that the big oil companies charge or go out of business.  Since there is no way they could survive with that, they’d simply be driven out of the market.  Creating even more jobs losses and closed businesses.

     

    9. Oil companies should be nationalized

     

    There are many problems with this theory.  One, the government already collects $.50 to $.60 a gallon of tax, while the oil companies make about $.07 to $.10 profit per gallon.  So if all oil companies were nationalized, we’d be saving $.07 to $.10 a gallon, and that is if the government could run the company as efficently as the oil companies have (which, I have my doubts about). 

    The second problem is that US imports far more oil than it produces.  Most national oil companies produce far more than than their country uses.  So it can sell gas in the country for practically nothing as a sort of gift from the “benevolent rulers”.  The nationalized US company would still have to pay market price for all the oil that comes from outside the US.  So all the costs with producing gas are still there.

    The third issue is that while the oil companies do make a lot of profit, most of that profit (around 75%) comes from outside the US.  Not only that, but a lot of the oil companies also have other business, such as Exxon Chemical.  Exxon Chemical is responsible for about 10-15% of XOM’s profit.  Obviously, the government wouldn’t be taking over this part.  

    The fourth issue is how would the government compensate the companies for taking this over?  Since the companies are all publicly traded, that means most people that own stocks or mutual funds have a vested interest in this.  They don’t want to see their money vanish on the whims of the government, so you would have to buy the US operations from the oil companies for a fair value.  Does the US government have this money available?

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  18. By Benny BND Cole on August 1, 2011 at 4:49 pm

    Excellent article. As I always say, “People who are productive are never “the problem,” whether they be management or workers, or in oil, or computers.”

    It is parasites who are the problem, whether welfare cheats or the military.

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  19. By Ralph on August 2, 2011 at 3:44 am

    Good article. Has there been a survey showing how many oil companies are beginning to invest in and sell solar. Good move!! Solar on American rooftops should be a priority. If it takes oil money to get it there than so be it. The electric car market is coming at us in high gear. Lets get those solar rooftop and canopy battery rechargers humming. Nowadays we are seeing some of the smarter forward thinking auto producers using a swappable battery, This is great. They not only extend the range, but anytime the sun is shining they area charging up a spare battery or 2 (or a thousand). Free energy from the sun, and our beloved oil companies are bringing it to us. Thank goodness. Our low income, senior and disabled population have been looking for a break in this economy and our good ol’ oil friends have delivered.
    Can we get those troops home yet? No sense in leaving them there if we are using the sun’s free energy instead of Hassams. Oh yeah, I almost forgot, the mideast oil producers are using their billions to invest in solar too. Smart move. They will still need seed money for their terrorist base funding.

    Oh well seems like the solar assisted robot factory movement is well under way. Multiple factories that mass produce cheap electric cars (that dont use oil or gas) that are 10 times more efficient are going strong. Good. Less pollution, Less wasted energy, less cost, less parts, less financing cost, less solar charging (some needs to go to the house), less pollution, less global warming, less feeding of millionaires and corporate monopolies.

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  20. By rrapier on August 2, 2011 at 4:11 am

    Ralph said:

    Free energy from the sun, and our beloved oil companies are bringing it to us. Thank goodness. Our low income, senior and disabled population have been looking for a break in this economy and our good ol’ oil friends have delivered.


     

    You may not know that BP Solar is one of the world’s largest solar energy companies in the world. Shell was in the business for several years, but sold their solar division to Solar World in 2006. Total plunked down over a billion dollar investment in solar crystalline producer SunPower earlier in the year. And of course if you move beyond solar and into liquid renewable fuels, you will find that pretty much every major oil company has some activities in that area.

    Many people don’t hear these things, as they don’t support the narrative that has been created.

    RR

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  21. By EarlRichards on August 2, 2011 at 6:40 am

    The oil prices dropped in the fall of 2008,  because of the election. ICE lowered the price so it could not used as a campaign issue against the Republicans and Big Oil. In April 2011, the oil price dropped because the CFTC increased the margin limit requirements. After the election and after the margin limit increase, ICE went ahead and ratcheted-up the price of oil. I am arguing that price changes should be approved by the government and regulatory commissions and not excessive demand speculators and not the market manipulation of oil traders. A small number of bad people control the oil market, more so, then, the other commodity markets, because there is more money to be made in oil. The oil price in the US is controlled  by excessive demand speculators and market manipulators, within the crude oil futures market. OPEC have no influence within the oil futures crude market within the NYMEX and within ICE, to control the oil price within the US.

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  22. By Dan O'Connell on August 2, 2011 at 9:49 am

    Great article! The U.S. is so fortunate to have companies like Exxon Mobile. Unfortunately so many of the people that disagree with your explanation have their own agenda or are not intelligent enough to understand. I think that the oil companies do a very bad job of informing the public and handling their public relations. As in most cases the people that spread misinformation hurt those that do not understand the most.

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  23. By John Hill on August 2, 2011 at 2:50 pm

    I may have missed it, but I’ve never seen you write about oil companies financing the global warming denial industry. The parallels to the tobacco industry 30 years ago are obvious.

    By way of disclosure, I should admit that I’m something of a leftist — sort of a social democrat — but a skeptical one with a B.Sc. I agree with your analysis of the follies of both the Republican and Democratic views of the oil companies, but I’d like to know what you think of “Drill, Baby, Drill” and of oil companies’ complicity in promoting such silliness.

    No matter what you reply, you will remain my go-to guy for rational analysis of energy issues.

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  24. By russ on August 2, 2011 at 3:16 pm

    Ralph said:

    Solar on American rooftops should be a priority. 

    The electric car market is coming at us in high gear.

    Lets get those solar rooftop and canopy battery rechargers humming.

    Nowadays we are seeing some of the smarter forward thinking auto producers using a swappable battery,


     

    1) Solar on roof tops is only practical when your neighbors help pay for it as it stands today and for the next 10 or 20 years. Without the subsidies that get people so wound up solar PV would be dead today – wind also.

    2) Electric cars coming in high gear? Don’t think so and neither do the auto company execs around the world – they are moving into that market slowly

    3) To get enough solar panels on a roof top to operate a standard sedan you will have to tow a trailer behind you – of course the extra load will require more panels and a bigger trailer. Solar on car roofs is only to sucker the public into thinking like you posted.

    4) Swappable batteries? Not today on a serious basis and probably never. You read some crazy stories about it but think of 1) the weight and 2) connections that have to be made perfec every time – not just most of the time

    Despite all the hype solar PV isn’t yet to a practical and economic stage.

    Solar water heaters and air heaters are actually much more practical with today’s technology.

    Without improved storage systems (batteries) solar PV and wind will remain cute niche items touted by the Volvo/Audi driving country club bunch.

     

     

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  25. By rrapier on August 2, 2011 at 3:48 pm

    EarlRichards said:

    The oil prices dropped in the fall of 2008,  because of the election. ICE lowered the price so it could not used as a campaign issue against the Republicans and Big Oil.


     

    Earl, you should check historically. You will find that oil prices drop in the fall almost every year. The reason is that demand drops after summer and winter gasoline specs kick in which increases the overall supply pool. Not an election year thing, a fall thing. See my essay Refining 101: Winter Gasoline.

    RR

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  26. By art on August 2, 2011 at 7:07 pm

    Hi RR,

    Thanks for the details about oil prices and how the publc and politicians (mis) interpret them, I like the point you make: oil companies are making profits due to demand, not due to sheer greediness…But ratio is often leaving the room in politics and then distorted views start to skew perspectives… no difference in Europe,,, not completely on topic but just to illustrate the point:

    http://www.europeanenergyrevie…..k=franche0

    though shalegas is not oil, it is (again) a symptomatic political discussion about emotional arguments not a technical or economical discussion…
    typical for politicians at work….. I ‘d prefer a technocratic better educated goverment… not a lot of scientists end up in goverment…

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  27. By EarlRichards on August 2, 2011 at 3:54 pm

    The oil price drop in the fall of 2008 was too astronomical for the price drop to be tied to the change of seasons.

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  28. By rrapier on August 2, 2011 at 3:57 pm

    John Hill said:

    I may have missed it, but I’ve never seen you write about oil companies financing the global warming denial industry. The parallels to the tobacco industry 30 years ago are obvious.


     

    John, I am aware of the claims of ExxonMobil funding global warming denial. I don’t recall if I have ever mentioned that particular issue — I think I have in passing — but there is a reason I don’t write about it (and I have never investigated it in depth for the same reasons). It’s the same reason I don’t write much on global warming at all. I simply don’t think that it is a problem that the world is going to solve (for reasons I have written about previously).

    So for me personally, whether an oil company is funding denialist research is irrelevant if I don’t believe the problem is solvable in any case. I can tell you that different oil companies feel differently about the issue. ConocoPhillips’ CEO Jim Mulva told me personally that he believes humans are contributing to global warming and that it is a very serious threat.

    By way of disclosure, I should admit that I’m something of a leftist – sort of a social democrat — but a skeptical one with a B.Sc. I agree with your analysis of the follies of both the Republican and Democratic views of the oil companies, but I’d like to know what you think of “Drill, Baby, Drill” and of oil companies’ complicity in promoting such silliness.

    I have been critical of the “Drill, Baby, Drill” meme. When John McCain jumped on that bandwagon I criticized him for promoting nonsense. It isn’t that we shouldn’t develop our resources, it is that people have totally unrealistic expectations about what drilling can actually deliver.

    RR

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  29. By rrapier on August 2, 2011 at 3:59 pm

    EarlRichards said:

    The oil price drop in the fall of 2008 was too astronomical for the price drop to be tied to the change of seasons.


     

    It was preceded by an astronomical, unsustainable run-up. We see this in bubbles all the time. No conspiracy is needed in that case. I said at the time that the price was not sustainable; the falling of demand in the fall — combined with the falling of demand due to the high prices — was plenty of reason for the astronomical drop.

    Further, the price kept falling after the election. I guess they couldn’t turn it around too quickly, eh? Might arouse suspicion.

    RR

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  30. By Earl Richards on August 1, 2011 at 8:37 am

    OPEC, Libya and the laws of supply and demand are not responsible for high gasoline and oil prices. The oil price is dictated by the fraudulent “round-trip” trades of the “dark pool” trading in the Intercontinental Exchange (ICE) in Atlanta. The international Big Oil/big banking cabal owns ICE. ICE operates outside of U.S. law. The Commodity FuturesTrading Commission has no juriduction over ICE, bribed by Big Oil. ICE’s energy traders and speculators can ratchet-up the oil price anytime they feel like it, for their own profits and on the behalf of Big Oil, through the use of “round-trip” trades. Google the “Global Oil Scam.” ICE is a super Enron. Oil is too critical a resource to be controlled and manipulated by greedy corporations, greedy traders, greedy refiners and greedy speculators.

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  31. By Brob0405 on August 1, 2011 at 9:20 am

    One thing this author did not mention in this article is the fact that oil companies do receive a huge subsidy that no other industry enjoys.  They have the US military to handle their business in foreign countries.  War is about resources not humanitarianism.  Check into how much money was spent in the last 5 years building fences around oil fields in Iraq; the number is much higher than building schools.  Who pays our military?

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  32. By Ian Random on August 1, 2011 at 10:19 am

    Excellent article. Also one of the problems I seem to hear is that oil companies can depreciate their wells and that is considered a subsidy.

    Brob0405,
    Remember we were buying oil from them both before and after the regime change in Iraq. If anything, now the money will go to the people and not be spent on lavish mansions.

    “…Saddam Hussein raked in $1.7 billion in kickbacks from participating companies and $11 billion in oil-smuggling profits.”

    http://www.washingtonpost.com/…..01646.html

    Earl Richards,

    If the ICE is so powerful, why does the price of oil drop? Why isn’t it always $10/gallon?

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  33. By moiety on August 1, 2011 at 10:26 am

    Brob0405 said:

    One thing this author did not mention in this article is the fact that oil companies do receive a huge subsidy that no other industry enjoys.  They have the US military to handle their business in foreign countries.  War is about resources not humanitarianism.  Check into how much money was spent in the last 5 years building fences around oil fields in Iraq; the number is much higher than building schools.  Who pays our military?


     

    Did the oil companies have a say in why the US went ot war with those countries? How much of said US oil company profits are coming from these countries? Answer those questions and back up your point.

     

    A common mis-information point I see on subsidies is that renewables recieve less than say fossil fuel companies. That is a half truth at best; Fossil fuels do recieve a total net subsidy larger than renewables but per power produced, the renewable companies recieve a much higher subsidy. The reason for the higher net value is the fossil fuel companies produce far more power. That means if a renewable produced the same amount of power, it would be recieving greater net subsidies. http://www.eia.gov/oiaf/servic…..xecsum.pdf

     

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  34. By armchair261 on August 3, 2011 at 1:45 am

    John Hill,

    You said

    but I’d like to know what you think of “Drill, Baby, Drill” and of oil companies’ complicity in promoting such silliness.

    I wanted to make a comment on this. I suppose the question is, what does “Drill, Baby, Drill” actually mean in specific policy terms? I don’t really know.

    If it means “we can eliminate oil imports through the drill bit” I’d agree that this is very unrealistic and bordering on silly.

    If we say it means “we can to a large extent become energy independent through drilling” then I’d still say this is pretty unlikely. But, given the results to date from both oil and gas unconventional resource plays, and considering we’re only about 5 years into exploiting this class of resource, I wouldn’t say it’s an absolutely silly proposition.

    If we say it means “we should increase domestic exploration and development because it could have a significant impact on US oil production, jobs, and trade balance” then I’d say it’s not silly at all. Oil production in North Dakota has, for example, increased from about 100,000 bopd in 2005 to almost 400,000 bopd today. Some observers are predicting the million barrel mark before too long. This is almost entirely the result of aggressive development of the new Bakken Shale/Three Forks play system. Other plays on the horizon, such as the Niobrara, Mississippi Lime, Tuscaloosa Marine Shale, Monterey, and others could also deliver strong results. So I think it’s true that increased domestic drilling could (and might) produce results that are very significant on the national scale. Most of these new plays will require hydraulic fracturing, which seems to be another source of gross misinformation in itself, but that’s perhaps the topic of another post someday.

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  35. By garret seinen on August 3, 2011 at 1:48 am

    Thanks for the well reasoned article. I like your, “But why should I care? Well, I care because ignorance is the basis of bad energy policy decisions.” will be using it myself. The world is awash in bad energy policies due to the misinformation a zealous lot has no desire to correct. I find it baffling that so very many people willingly pay $4 for a coffee and complain when a gallon of gasoline costs as much. I wish they would all try to refine a single cupful of fuel before demonizing vitamin ‘O’, the life blood of our society.

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  36. By rrapier on August 3, 2011 at 3:29 am

    Steve Funk said:

    http://thinkprogress.org/romm/…..nvestment/

    Robert, have you seen Joe Romm’s claims that the debt deal will undercut important government energy research? I am curious about just what is likely to be cut, and how significant the government contributions really are.


     

    I have actually been thinking about this. I think ultimately just about everyone will get hit, and some of the alternative energy subsidies will be targeted. The ethanol lobby has seen the handwriting on the wall and are resigned to giving theirs up. But some of the next generation subsidies might be cut as well, and that has some pretty big ramifications. I know of one specific recent biofuel IPO that now has a market cap of over $1 billion that I don’t think has much worth at all if they can’t tap into subsidies. There are a lot of cases like that.

    RR

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  37. By EarlRichards on August 3, 2011 at 4:47 am

    Dave W said:

    Here is a personal story relating to Exxon profits: My grandfather worked for Humble Oil and Refining for many years and participated in an employee stock purchase plan in a modest way. The company at some point became part of Exxon. My mother who is now 91 years old was one of three siblings who inherited the stock which had grown over the years through splits. She now gets about $5000 per year in dividends which helps to supplement her Social Security. So when people talk about Exxon making too much money, do they want to take money away from my mother? She is certainly not rich.


     

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  38. By EarlRichards on August 3, 2011 at 4:48 am

    Dave W said:

    Here is a personal story relating to Exxon profits: My grandfather worked for Humble Oil and Refining for many years and participated in an employee stock purchase plan in a modest way. The company at some point became part of Exxon. My mother who is now 91 years old was one of three siblings who inherited the stock which had grown over the years through splits. She now gets about $5000 per year in dividends which helps to supplement her Social Security. So when people talk about Exxon making too much money, do they want to take money away from my mother? She is certainly not rich.


     

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  39. By EarlRichards on August 3, 2011 at 4:54 am

    The former Chief Executive Officer of ExxonMobil, Lee Raymond, received a retirement package of $400 millions, $5000 per year is peanuts compared to $400 millions. This capital could be put to better use in reinvestment and exploring for new oil wells.

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  40. By EarlRichards on August 3, 2011 at 5:23 am

    Hello Armchair:

     

    You make three points. The first point, I do not understand, what you are saying. On your second point, e.g., if the government put a ceiling of $90 per barrell for U.S. oil, produced from U.S. territory, then, if the international producers wanted to sell to the U.S., than they would have to lower their price to $90 per barrell. This way, the American government would be protecting the public interest, protecting the consumer interest and assist in pulling the economy out of the recession. With respect to your third point, the number of excessive demand speculators in the oil market is much greater than in the natural gas market, because again, there is more money to be made in oil. You do not seem to understand the mechanics and sheer volume of excessive demand speculation.

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  41. By Wendell Mercantile on August 3, 2011 at 9:49 am

    She now gets about $5000 per year in dividends which helps to supplement her Social Security. So when people talk about Exxon making too much money, do they want to take money away from my mother?

    It’s also worth noting that virtually everyone in the U.S. who is vested in a retirement plan collectively owns stock in many oil (energy) companies. The major oil (energy) companies are blue chips and a favorite stock of those who manage pension funds.

    Everyone should also get over calling them oil companies. They are “energy” companies. The stockholders of those companies don’t care whether they make their money from oil, ethanol, methanol, solar, wind, geothermal, or the tides. Wise CEOs and boards of directors will also diversify their companies into all modes of energy.

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  42. By savro on August 3, 2011 at 11:12 am

    EarlRichards said:

    On your second point, e.g., if the government put a ceiling of $90 per
    barrell for U.S. oil, produced from U.S. territory, then, if the
    international producers wanted to sell to the U.S., than they would have
    to lower their price to $90 per barrell. This way, the American
    government would be protecting the public interest, protecting the
    consumer interest and assist in pulling the economy out of the
    recession.


     

    If your goal is to completely shut down domestic oil production in the U.S. then this would be a great idea. If, however, your intention was to ensure an adequate supply of oil for the country then this makes no sense. Why would someone holding a barrel of oil sell it to the U.S. for below market value if they could sell it internationally for a higher price (when oil is trading above your $90 ceiling)?

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  43. By paul-n on August 3, 2011 at 12:18 pm

    if the government put a ceiling of $90 per barrell for U.S. oil, produced from U.S. territory, then, if the international producers wanted to sell to the U.S., than they would have to lower their price to $90 per barrell.

    Earl, take two reality pills and then read this again…

    Your statement is correct, in that they would have to lower their price to sell into the US market, but, given that Brent oil (the international benchmark) has been trading at about $115 for the last year, how many companies do you think will want to sell at a $25discount?

    In fact, in Canada, if a company chose to sell to the US at a discount, its shareholders could sue!

    The main result of your price ceiling is that exporting countries/companies would export to anywhere but the US, leaving only the domestic production which is 1/3 of US oil consumption.

    With 2/3 of the oil gone, how is remainder distributed?  Either by rationing, or there will be massive retail price spikes as people bid each other out of the market.

    This way, the American government would be protecting the public interest, protecting the consumer interest and assist in pulling the economy out of the recession.

    I suspect it would shove the economy back into recession the next day.

    But hey, I don;t live there, so I’d be a very interested sideline spectator.  For the people that do live there, I doubt they would stay on the sidelines for very long.

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  44. By EarlRichards on August 3, 2011 at 1:06 pm

    The international oil producers would sell oil to the US at $90 per barrell, because there is fantastic profits to be made and to get rid of their oversupply, especially,  if they cannot find a buyer, despite the fact that the oil price is $120 per barrell elsewhere. In Saudi Arabia, a gallon of gasoline costs $.50. When the over supply is stored in storage facilities and offshore tankers, the oil is not making any money. Oil at $90 per barrell is over priced.

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  45. By Addoeh on August 3, 2011 at 1:26 pm

    The international oil producers would sell oil to the US at $90 per barrell, because there is fantastic profits to be made and to get rid of their oversupply, especially, if they cannot find a buyer, despite the fact that the oil price is $120 per barrell elsewhere. In Saudi Arabia, a gallon of gasoline costs $.50. When the over supply is stored in storage facilities and offshore tankers, the oil is not making any money. Oil at $90 per barrell is over priced.

    No, OPEC would just stop producing the oil that would have gone to the US on the open market. We need oil more than they need our money since they can just cut the amount the US would use from their production. Several countries in OPEC, (Iran, Venezuela especially) are openly hostile and opposed to the US. They will do whatever they can to prevent the US from getting the oil. They aren’t going to agree to the US arbitrarily setting a price ceiling. They know we can’t go anywhere else for oil. And they know the US would eventually would get rid of the ceiling after a few weeks. All we would have is SPR (which would last a few weeks) and domestic production. Since domestic production can’t be quickly increased, we’d have serious issues after a month (and probably less than that). OPEC could easily just wait us out. We can’t go weeks without oil. OPEC can go weeks without the US money.

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  46. By rrapier on August 3, 2011 at 1:34 pm

    EarlRichards said:

    The former Chief Executive Officer of ExxonMobil, Lee Raymond, received a retirement package of $400 millions, $5000 per year is peanuts compared to $400 millions. This capital could be put to better use in reinvestment and exploring for new oil wells.


     

    But let’s compare apples to apples. That $400 million is over the course of the rest of his life. Sure, that is a whole lot of money to folks like you and me, but it is peanuts compared to what ExxonMobil does spend reinvesting and exploring for new wells. They spend $25 or $30 billion a year; average his pay package up over the time he receives it and it will amount to a small fraction of a cent per gallon of fuel they sell. Further, Michael Eisner from Disney got even more than Raymond got — $550 million.

    I am not defending the decision to give him that much money. We can discuss all day how much money he should have gotten. Who knows? But I want to put some perspective on the package versus the size of ExxonMobil’s operations. I know a lot of these renewable startups are paying their executives ridiculous sums of money and yet will never produce anything.

    RR

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  47. By rrapier on August 3, 2011 at 1:37 pm

    EarlRichards said:

    On your second point, e.g., if the government put a ceiling of $90 per barrell for U.S. oil, produced from U.S. territory, then, if the international producers wanted to sell to the U.S., than they would have to lower their price to $90 per barrell. 


     

    Donald Trump, is that you? He of course had the same bright idea:

    I Can’t Take Donald Trump Seriously

    Won’t work that way. Turn it around. What if Saudi Arabia demanded that we sell them corn at a 30% discount relative to market prices? We would laugh at them and take our business elsewhere.

    RR

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  48. By Kit P on August 3, 2011 at 2:00 pm

    “Everyone should also get over calling them oil companies. They are “energy” companies.”

    Not in the United States. No ‘oil’ company has penetrated the energy sector associated with making and distributing electricity except for maybe CHP at refineries.

    I an not sure why this is and would be interested in an example of such as an ‘oil’ company that also has 10,000 MWe of capacity (or customers base). Some have tried to penetrate the market but they always fail.

    Making electricity is a public service and you can just forget getting super rich doing it. If you want to get rich speculate on oil or become a professional football player. Furthermore, if you do not take your public service seriously, you will need a good lawyer to keep you out of jail. Thanks to people like Rate Crimes, CEOs of utilities still need a good lawyer just to do business.

    It would be fun to see actors and professional athletes justify salaries to the PUC. If somebody paid me $10k per movie or game, I would think that is fair.

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  49. By EarlRichards on August 3, 2011 at 2:28 pm

    The American military has occupied Iraq. The American government can “tighten the screws ” on the Iraqi government to obtain oil for the U.S. at $90per barrell and all the oil that is necessary for the U.S., and to outflank the other OPEC members. Iraq being member of OPEC, is not a consideration. Iraq is controlled by the U.S., not OPEC.  If the other OPEC members wanted to export oil to the U.S., they would have to sell at $90 per barrell, or lose U.S. money. In the interim, the U.S. would have rearrange their domestic energy policy, for examply, use more natural gas at the retail level (cars). There is, at least, 25 billions of oil in Prudhoe Bay, Alaska, that can be distributed to the rest of the country, the U.S. does not have to be dependant on oil imports, Big Oil is making to much money. Presently, most of the world’s oil is controlled by Big Oil, oil-bought governments and OPEC.

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  50. By armchair261 on August 3, 2011 at 4:19 pm

    Earl.

    You make three points. The first point, I do not understand, what you are saying.

    Let me clarify. It’s really quite simple.

    First, you claimed that the price of oil dropped in 2008 due to an attempt by producers to influence US voters. But oil and gas prices kept dropping almost 2 months after the election. In fact, oil fell by about 50% between the election and late 2009. So it tells you that other forces are at work. What don’t you understand?

    Second, oil prices fell everywhere, not just in the US. So if you’re claiming that the price was manipulate to elect American politicians, then you’re claiming that countries that produce 94% of the world’s oil, including such strong Republican allies as Iran, Venezuela, and Russia, all agreed to spend billions per day in a bid to elect McCain. You probably didn’t understand this because your ideology filter kicked in. Turn it off please. :-)

    On your other claim, concerning the size of the oil market, it’s utterly ridiculous to say that those who can manipulate one commodity they sell to make a fortune would neglect another commodity they also sell. Why wouldn’t they assign a small group of wicked people to fix US natural gas prices if they can do so for oil? For salary expenses in the seven figures, these gas manipulators could reap billions per year. Your response: they don’t want to. Do you ever think any of this through?

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  51. By armchair261 on August 3, 2011 at 4:20 pm

    In fact, oil fell by about 50% between the election and late 2009.

     

    Correction: In fact, oil fell by about 50% between the election and late 2008.

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  52. By armchair261 on August 3, 2011 at 4:25 pm

    Kit P said

    If you want to get rich speculate on oil

    Also a good way to get poor. :-)

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  53. By armchair261 on August 3, 2011 at 5:15 pm

    Earl says:

    The American government can “tighten the screws ” on the Iraqi government to obtain oil for the U.S. at $90per barrell and all the oil that is necessary for the U.S.

    Would you say that this would be fair to the Iraqi people? You are advocating here that the US should overthrow foreign countries and force lower oil prices on them so that relatively rich Americans can have cheaper fuel at the expense of the relatively poorer citizens of large oil producing countries.

    You haven’t raised any concerns with other countries selling at higher market prices.

    We’ll disregard for now the problem that Iraq produces only about 20% to 25% of US import requirements.

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  54. By addoeh on August 3, 2011 at 5:30 pm

    The American military has occupied Iraq. The American government can “tighten the screws ” on the Iraqi government to obtain oil for the U.S. at $90per barrell and all the oil that is necessary for the U.S., and to outflank the other OPEC members.

    And if Iraq says no, what do we do? We’re already leaving the country. Are we going to stay to protect “our” assets? Are we just going to send more troops in case the country descends into chaos? Where is this money going to come from? What if other countries, including ones that are currently are allies, start putting tariffs on US imports? You say you would do this protect us. But from what I’ve seen and what others have commented on, this would only do us more harm.

    If the other OPEC members wanted to export oil to the U.S., they would have to sell at $90 per barrell, or lose U.S. money.

    When it comes to oil, we don’t hold the cards. We’re betting a two/seven off suit against aces. We can’t bluff them. They’ll just wait us out. We don’t have enough oil to fulfill our needs for more than a month without serious changes that won’t happen quickly or without backlash. Until something else comes into play, we’re at their mercy. That “something else” won’t happen in short term and probably won’t happen in the medium term. Individually, we can look at alternatives or to change our lifestyle. But most people will be either unwilling or unable to make them.

    In the interim, the U.S. would have rearrange their domestic energy policy, for examply, use more natural gas at the retail level (cars). There is, at least, 25 billions of oil in Prudhoe Bay, Alaska, that can be distributed to the rest of the country, the U.S. does not have to be dependant on oil imports,

    And all of these things can happen overnight? And if we did go to natural gas, what would happen to the price of it? What companies also happen to have a lot of natural gas holdings? Plus, Prudhoe Bay originally had 25 billion barrels. That amount has decreased since production started in 1977.

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  55. By rrapier on August 3, 2011 at 5:58 pm

    EarlRichards said:

    The American military has occupied Iraq. The American government can “tighten the screws ” on the Iraqi government to obtain oil for the U.S. at $90per barrell and all the oil that is necessary for the U.S., and to outflank the other OPEC members. Iraq being member of OPEC, is not a consideration. Iraq is controlled by the U.S., not OPEC.


     

    If the U.S. controls Iraq, perhaps you can explain why U.S. companies were completely shut out of the bidding to develop Iraq’s oil:

    Those who claim that the U.S. invaded Iraq in 2003 to get control of the country’s giant oil reserves will be left scratching their heads by the results of last weekend’s auction of Iraqi oil contracts: Not a single U.S. company secured a deal in the auction of contracts that will shape the Iraqi oil industry for the next couple of decades. Two of the most lucrative of the multi-billion-dollar oil contracts went to two countries which bitterly opposed the U.S. invasion — Russia and China — while even Total Oil of France, which led the charge to deny international approval for the war at the U.N. Security Council in 2003, won a bigger stake than the Americans in the most recent auction. “[The distribution of oil contracts] certainly answers the theory that the war was for the benefit of big U.S. oil interests,” says Alex Munton, Middle East oil analyst for the energy consultancy Wood Mackenzie, whose clients include major U.S. companies. “That has not been demonstrated by what has happened this week.”

    Sorry Earl, you just aren’t making sense.
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  56. By armchair261 on August 3, 2011 at 8:32 pm

    Earl says:

    There is, at least, 25 billions of oil in Prudhoe Bay, Alaska, that can be distributed to the rest of the country, the U.S. does not have to be dependant on oil imports,

    Stats
    Statistics for the Greater Prudhoe Bay Field:
    Discovery well: Prudhoe Bay State #1
    Discovery date: March 12, 1968
    Production start: June 20, 1977
    Total field area: 213,543 acres (864.18 km2)
    Oil production wells: 1114
    Total capacity: 25 billion barrels (4.0×109 m3) [in-place: not all recoverable]
    Produced: 11 billion barrels (1.7×109 m3)
    Total recoverable: 13 billion barrels (2.1×109 m3) [52% of in-place total]
    Remaining recoverable: 2 billion barrels (320,000,000 m3)

    Well, Earl, that will get us through about 110 days at current consumption rates. What next?

    Presently, most of the world’s oil is controlled by Big Oil, oil-bought governments and OPEC.

    Big Oil controls about 15% of global production, and perhaps 3% of global reserves.

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  57. By Eliza on August 4, 2011 at 11:10 am

    Do you hear yourselves. Has anyone asked you lately to work harder, learn more, improve greatly and by the way take less pay and you are an “SOB?”
    All oil companies are the same only some extract the oil and others don’t. However we are all trying to accomplish the same goal. Provide energy! Whether it is fuel, cars, planes, tractors, etc or BOTB by products for the milk jugs and computers and the little plastic things at the end of our shoe strings. Everything comes from oil, EVERYTHING!!! Wake up people we are not the big guns in this. OPEC is not controlled just by Iraq, this is not a domestic group. If your going to play with the big boys, play big or go home.
    You pay big bucks to watch big players play games of all sort and don’t complain about their pay grade. Why are energy companies, which has been established is the empolyees of the industry, being dogged for making money? You sound like 2 year olds, “He’s getting more money than me” Do you have the degrees that he has? Have you put in the years of hard work, fighting for the safety of your employees, and doing what is best for them? Not everyone is a crook and there are crooks in every industry all the way down to the garbage collector’s. If you don’t like the retirement he’s getting, get up and better yourself, put in the time and hard work he has and then you can be the one everyone is bitching about! This is not 1984! It costs to live. While at the grocery store did you complain about the cost of bread? When you bought your beer or wine last did you verbally complain so that everyone in the store could hear you? Believe me we hear you! Enough already. We, the energy people, live in this country too!! We buy cars (and pay the same price at the pump as you), homes, we have children that need food and clothing, bikes and toys. We send our kids to public school with your kids. We are America too. We deserve as much oppurtunity as all of you!
    By the way, you are riding that bicycle to and from work everyday so you don’t have to pay at the pump right?!!!
    ENOUGH!!
    Thank you Mr. Rapier, for stating facts. Could you please sky write this article for America. The ignorance is choking our country. I’m the wife of an energy employee and we work hard, very hard for our money. As do all of our team members.

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  58. By Earl Richards on August 4, 2011 at 5:53 pm

    My answers to everyone’s comments are already stated in my comments. To get into an arguement, I would be repeating myself.

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  59. By armchair261 on August 4, 2011 at 9:12 pm

    Earl,

    Why do you suppose your small number of bad guys got together this morning and decided to drop oil prices by 6% today? What election were they trying to throw?

    You have no answers, and you have no arguments. You have only uninformed and simplistic slogans. You ignore facts that contradict your comments, and pretend that you are engaging in a debate. You aren’t.

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  60. By savro on August 4, 2011 at 11:05 pm

    armchair261 said:

    Earl,

    Why do you suppose your small number of bad guys got together this morning and decided to drop oil prices by 6% today? What election were they trying to throw?


     

    LOL. Waiting with bated breath to see what Earl’s imagination will cook up now… Confused

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  61. By EarlRichards on August 5, 2011 at 2:20 am

    armchair261 said:

    Earl,

    Why do you suppose your small number of bad guys got together this morning and decided to drop oil prices by 6% today? What election were they trying to throw?

    You have no answers, and you have no arguments. You have only uninformed and simplistic slogans. You ignore facts that contradict your comments, and pretend that you are engaging in a debate. You aren’t.


     

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  62. By EarlRichards on August 5, 2011 at 2:25 am

    Big Oil controls the oil price in North America and western Europe, from in behind the scenes. Big Oil is lowering the oil price to stop the recession from becoming a depression. The various indices on the New York Stock Exchange are falling rapidly. Big Oil caused the recession in the first place by ratcheting-up the oil price.

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  63. By armchair261 on August 5, 2011 at 3:04 am

    Big Oil controls the oil price in North America and western Europe, from in behind the scenes.

    Oh! But not Asia, Africa, Australia, or Latin America? I didn’t know that! LOL

    Big Oil is lowering the oil price to stop the recession from becoming a depression.

    Oil has dropped by about $13 per barrel in the last week or two. Today by about $5 …. and this was apparently, you believe, decided at a meeting this morning attended by the US’s 14,000 oil company CEO’s. I wonder how they all agreed so quickly, before the morning break even! Must have been pretty good coffee. I might have held off for another week. Surely a depression wouldn’t have happened by next week if oil had not lost $5 today? Ya think?

    So… oil down by about $13 per barrel recently. Not just in the US but all over the world.

    Russia, at 10,000,000 barrels per day, has agreed to drop $130,000,000 per day to help us Americans out. Our thanks to Putin!

    Iran, at 4,000,000 barrels per day, has agreed to drop $52,000,000 per day to help us Americans out. What a pal that Ahmadinejad is!

    Venezuela, at 2,400,000 barrels per day, has agreed to drop $31,000,000 per day to help us Americans out. That Chavez, what a guy!

    Amazing how they all agreed so quickly, and even to the exact amount that Big Oil agreed to! Who would ever have guessed?

    Also in the news today…
    Silver down 5.6%
    Wheat down 3.3%
    Sugar down 2.5%
    So Big Silver, Big Wheat, and Big Sugar are also chipping in to avoid a depression.

    But!…
    Lean Hogs were up 0.5%. Big Hogs decided, who cares about a depression?

    I’m curious though… why would an industry that routinely causes recessions as something of a hobby care about causing a depression? Everyone has to drive. What does Big Oil care? Why not jack up the price by enough to offset declining demand? I wonder where this sudden streak of decency and compassion came from.

    What really has me puzzled though, Earl, and maybe you can help me out, is why oil fell from about $40 in 1981 to $10 in 1986, and didn’t get to $40 again for good until 2004? What in the heck were those CEO’s thinking for 23 years?

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  64. By EarlRichards on August 5, 2011 at 3:33 am

    armchair261 said:

    Big Oil controls the oil price in North America and western Europe, from in behind the scenes.

    Oh! But not Asia, Africa, Australia, or Latin America? I didn’t know that! LOL

    Big Oil is lowering the oil price to stop the recession from becoming a depression.

    Oil has dropped by about $13 per barrel in the last week or two. Today by about $5 …. and this was apparently, you believe, decided at a meeting this morning attended by the US’s 14,000 oil company CEO’s. I wonder how they all agreed so quickly, before the morning break even! Must have been pretty good coffee. I might have held off for another week. Surely a depression wouldn’t have happened by next week if oil had not lost $5 today? Ya think?

    So… oil down by about $13 per barrel recently. Not just in the US but all over the world.

    Russia, at 10,000,000 barrels per day, has agreed to drop $130,000,000 per day to help us Americans out. Our thanks to Putin!

    Iran, at 4,000,000 barrels per day, has agreed to drop $52,000,000 per day to help us Americans out. What a pal that Ahmadinejad is!

    Venezuela, at 2,400,000 barrels per day, has agreed to drop $31,000,000 per day to help us Americans out. That Chavez, what a guy!

    Amazing how they all agreed so quickly, and even to the exact amount that Big Oil agreed to! Who would ever have guessed?

    Also in the news today…
    Silver down 5.6%
    Wheat down 3.3%
    Sugar down 2.5%
    So Big Silver, Big Wheat, and Big Sugar are also chipping in to avoid a depression.

    But!…
    Lean Hogs were up 0.5%. Big Hogs decided, who cares about a depression?

    I’m curious though… why would an industry that routinely causes recessions as something of a hobby care about causing a depression? Everyone has to drive. What does Big Oil care? Why not jack up the price by enough to offset declining demand? I wonder where this sudden streak of decency and compassion came from.

    What really has me puzzled though, Earl, and maybe you can help me out, is why oil fell from about $40 in 1981 to $10 in 1986, and didn’t get to $40 again for good until 2004? What in the heck were those CEO’s thinking for 23 years?


     

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  65. By EarlRichards on August 5, 2011 at 3:46 am

    What is LOL? Most of your reply is not revelant to the oil price in the US. The international Big Oil/big banking cabal owns ICE, they would contact the traders and speculators in the ICE to decrease the number of trades, and this would send a signal to the oil market of decreasing demand, and the decreasing demand would lower the oil price. The lowering of the oil price would give more money to the consumer, to “pump into the economy” to spend on lower-priced products and this would pull the economy out of the recession. The lower-priced products would be caused by lower-priced oil. Google the “Global Oil Scam” and the “London Loophole.”

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  66. By rrapier on August 5, 2011 at 3:59 am

    EarlRichards said:

    Big Oil controls the oil price in North America and western Europe, from in behind the scenes. Big Oil is lowering the oil price to stop the recession from becoming a depression. The various indices on the New York Stock Exchange are falling rapidly. Big Oil caused the recession in the first place by ratcheting-up the oil price.


     

    Earl, I am not kidding when I say those comments aren’t mildly grounded in reality. Sadly, this is the sort of thing that people believe, but it is quite far from the truth.

    I can tell you that when I worked for an oil company, we tried to project where oil prices were going just like everyone else did.

    RR

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  67. By paul-n on August 5, 2011 at 4:40 am

    They would contact the traders and speculators in the ICE to decrease the number of trades, and this would send a signal to the oil market of decreasing demand, and the decreasing demand would lower the oil price.

    And just what is to stop other traders, that they did not contact, from stepping in and buying?  Anyone can buy or sell oil on the exchange, not just those “controlled” by Big Oil – whoever that is.

    Was it these same Big Oil people that drove oil to $147 in 2008 and then suddenly decided it should be below $40 six months later?  That sounds like a really good decsion for Big Oil’s shareholders.

    There are Big Oil Buyers out there too – I can’t see China and India’s national oil companies just going along with what American companies do o the ICE – if there’s a buying opportunity, they’ll buy!

     

     

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  68. By EarlRichards on August 5, 2011 at 4:57 am

    Paul N said:

    They would contact the traders and speculators in the ICE to decrease the number of trades, and this would send a signal to the oil market of decreasing demand, and the decreasing demand would lower the oil price.

    And just what is to stop other traders, that they did not contact, from stepping in and buying?  Anyone can buy or sell oil on the exchange, not just those “controlled” by Big Oil – whoever that is.

    Was it these same Big Oil people that drove oil to $147 in 2008 and then suddenly decided it should be below $40 six months later?  That sounds like a really good decsion for Big Oil’s shareholders.

    There are Big Oil Buyers out there too – I can’t see China and India’s national oil companies just going along with what American companies do o the ICE – if there’s a buying opportunity, they’ll buy!

     

     


     

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  69. By EarlRichards on August 5, 2011 at 5:18 am

    Big Oil is ExxonMobil, BP, Royal Dutch Shell and Chevron. Royal Dutch Shell and BP are founding members of ICE. What is good for BP and Shell, just happens to coincide with what is good for ExxonMobil and Chevron. You could say that ExxonMobil and Chevron are silent partners in ICE. The management of Big Oil, drove the price of oil to $147 in 2008, and let the price fall to $40 and then, started ratcheting-up the oil price after the price dropped to $40, mainly through ICE. China, India and OPEC are relevant to the oil price in the US.  The oil price in the US is controlled by those who control the crude oil futures market. Over 80% of crude oil futures are traded in the unregulated ICE, so the other traders are insignificant players.

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  70. By armchair261 on August 5, 2011 at 12:56 pm

    Well Earl, you have it all figured out. When oil prices go up, it’s because “they” got greedy and wanted higher prices. When oil prices fall, it’s because “they” suddenly feel like it’s time for lower prices. Whether prices go up or down, you have an explanation. It’s a win-win for you! The fact that all other commodities also rise and fall can perhaps be explained by market forces, but oil… it’s different!

    Yesterday, “they” decided to send Brent down $5. So far today though, “they” are having second thoughts and sending it back up a dollar. Oh wait… now it’s up 90 cents today. Oops, as I write, it’s now up 96 cents. “They” must have no time for anything else but sending signals.

    RR is right. Unfortunately nonsense such as Earl’s is widespread. It adds a sort of national overhead on US energy policy.

    This just in, Brent up 93 cents today. “They” must be having trouble reaching a consensus today!? Hold it! Up $1.35 now! Changing every few seconds. Must be too much caffeine in “their” coffee today.

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  71. By armchair261 on August 5, 2011 at 12:58 pm

    Brent up $1.25. WTI down 37 cents. “They” are really confused today. Do “they” want to stop the recession or not?

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  72. By savro on August 5, 2011 at 1:27 pm

    armchair261 said:

    Brent up $1.25. WTI down 37 cents. “They” are really confused today. Do “they” want to stop the recession or not?


     

    Talk about confused. The oil execs seem like they’re suffering from a nasty hangover today after last night’s “How Do We Screw Around With Oil Prices” nightly session. They must’ve been serving some hard liquor at the meeting.

    P.S. Earl, in your future replies, can you please place your comments in the same post after quoting from a previous comment? It’s annoying to see a full comment that contains nothing more than a quote and then reading your reply to that quote in a later comment. Thanks.

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  73. By rrapier on August 5, 2011 at 1:43 pm

    EarlRichards said:

    Big Oil is ExxonMobil, BP, Royal Dutch Shell and Chevron. Royal Dutch Shell and BP are founding members of ICE. What is good for BP and Shell, just happens to coincide with what is good for ExxonMobil and Chevron. You could say that ExxonMobil and Chevron are silent partners in ICE. The management of Big Oil, drove the price of oil to $147 in 2008, and let the price fall to $40 and then, started ratcheting-up the oil price after the price dropped to $40, mainly through ICE.


     

    Earl, do you have some contact info for the ICE? I need to know what oil prices are going to be in December. I am sure they will talk to me.

    RR

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  74. By EarlRichards on August 5, 2011 at 2:18 pm

    Robert Rapier said:

    EarlRichards said:

    Big Oil is ExxonMobil, BP, Royal Dutch Shell and Chevron. Royal Dutch Shell and BP are founding members of ICE. What is good for BP and Shell, just happens to coincide with what is good for ExxonMobil and Chevron. You could say that ExxonMobil and Chevron are silent partners in ICE. The management of Big Oil, drove the price of oil to $147 in 2008, and let the price fall to $40 and then, started ratcheting-up the oil price after the price dropped to $40, mainly through ICE.


     
    Earl, do you have some contact info for the ICE? I need to know what oil prices are going to be in December. I am sure they will talk to me.

    RR


     

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  75. By EarlRichards on August 5, 2011 at 2:19 pm

    EarlRichards said:

    Robert Rapier said:

    EarlRichards said:

    Big Oil is ExxonMobil, BP, Royal Dutch Shell and Chevron. Royal Dutch Shell and BP are founding members of ICE. What is good for BP and Shell, just happens to coincide with what is good for ExxonMobil and Chevron. You could say that ExxonMobil and Chevron are silent partners in ICE. The management of Big Oil, drove the price of oil to $147 in 2008, and let the price fall to $40 and then, started ratcheting-up the oil price after the price dropped to $40, mainly through ICE.


     
    Earl, do you have some contact info for the ICE? I need to know what oil prices are going to be in December. I am sure they will talk to me.
    RR


     


     

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  76. By EarlRichards on August 5, 2011 at 2:23 pm

    The Intercontinental Exchange is listed on the New York Stock Exchange and the symbol is ICE. ICE’s website is http://www.theice.com. The telephone is 770-857-4700.

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  77. By EarlRichards on August 5, 2011 at 2:24 pm

    Samuel R. Avro said:

    armchair261 said:

    Brent up $1.25. WTI down 37 cents. “They” are really confused today. Do “they” want to stop the recession or not?


     
    Talk about confused. The oil execs seem like they’re suffering from a nasty hangover today after last night’s “How Do We Screw Around With Oil Prices” nightly session. They must’ve been serving some hard liquor at the meeting.

    P.S. Earl, in your future replies, can you please place your comments in the same post after quoting from a previous comment? It’s annoying to see a full comment that contains nothing more than a quote and then reading your reply to that quote in a later comment. Thanks.


     

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  78. By EarlRichards on August 5, 2011 at 2:29 pm

    Hello Armchair:

     

    Bear with me, I learning. Consumer Energy Reports is new to me. I have learned to click “Quote and Reply” at the top of the comment box and not at the bottom. I wiil try with this reply to see if I got it right.

     

    Earl Richards

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  79. By rrapier on August 5, 2011 at 2:36 pm

    EarlRichards said:

    Hello Armchair:

     

    Bear with me, I learning. Consumer Energy Reports is new to me. I have learned to click “Quote and Reply” at the top of the comment box and not at the bottom. I wiil try with this reply to see if I got it right.

     

    Earl Richards


     

    Earl, when you click quote and reply, you will get the quote you are replying to and a line below it. Go down below the line, fill in your reply, and then click “Post New Reply.” You can also pick pieces out of the quote part, paste them into the reply you are making, and then use the quote symbol after highlighting to indent that specific piece.

    RR

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  80. By armchair261 on August 5, 2011 at 2:38 pm

    I wiil try with this reply to see if I got it right.

    Good deal. After you master that challenge, I suggest you go here and learn a little bit about global oil price history. You might, for example, want to try downloading weekly oil prices for the past few years for, oh, say the US and Iran, and run a linear regression on prices (you do know what that means, don’t you?).

    When you’re done, you can come back to us and explain why US oil prices correlate to Iranian prices with a correlation coefficient of greater than 0.99. That’s kind of unexpected, isn’t it, if Big Oil only controls western European and North American prices. Why do you think Iranian leaders agree to drop prices to ease an American recession, or to help elect Republicans? Why wouldn’t they tell Big Oil and ICE to take a hike? Iran, after all, is really in bad straits economically speaking. They need the cash badly. Your thoughts?

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  81. By rrapier on August 5, 2011 at 2:41 pm

    EarlRichards said:

    The Intercontinental Exchange is listed on the New York Stock Exchange and the symbol is ICE. ICE’s website is http://www.theice.com. The telephone is 770-857-4700.


     

    So the total annual income of an organization that controls oil prices is only a few hundred million dollars a year? Instead of letting oil companies have all of that profit, I would think they would try to squeeze a bit more out for their own organization.

    RR

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  82. By EarlRichards on August 5, 2011 at 3:27 pm

    armchair261 said:

    I wiil try with this reply to see if I got it right.

    Good deal. After you master that challenge, I suggest you go here and learn a little bit about global oil price history. You might, for example, want to try downloading weekly oil prices for the past few years for, oh, say the US and Iran, and run a linear regression on prices (you do know what that means, don’t you?).

    When you’re done, you can come back to us and explain why US oil prices correlate to Iranian prices with a correlation coefficient of greater than 0.99. That’s kind of unexpected, isn’t it, if Big Oil only controls western European and North American prices. Why do you think Iranian leaders agree to drop prices to ease an American recession, or to help elect Republicans? Why wouldn’t they tell Big Oil and ICE to take a hike? Iran, after all, is really in bad straits economically speaking. They need the cash badly. Your thoughts?


     

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  83. By EarlRichards on August 5, 2011 at 3:36 pm

    There is no connection, whatsoever, between Iranian oil markets and American oil markets. Both countries do not recognize each other diplomatically, which means they do not exchange ambassadors. After the Shah was overthrown in 1979, the Iranian government kicked “Big Oil” out of the country. If there is any correlation betwen US oil prices and Iranian oil prices , it is a coincidence.

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  84. By armchair261 on August 5, 2011 at 3:44 pm

    A coincidence? LOL a 0.99 correlation coefficient over umpteen years is a coincidence?

     

    Click here for a plot of historical US oil prices.

     

    Now click here to see Iranian oil prices.

     

    Do you see any similarities?

     

    How about this one for Russia?

    Or this one for Venezuela?

    Or this one for Indonesia?

    Or this for Mexico?

    Or China here. Surely Big Oil doesn’t own China?

     

    If you bothered to check price data links, did you find that any of these plots look similar?

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  85. By dissent555 on August 5, 2011 at 4:16 pm

    Robert,

     

    Thanks, as usual, for your informative article. Your blog is really one of the essential reads on energy and energy policy.

     

    Now I’m going to run off and buy some popcorn futures, then come back and watch as Earl tries to spread more FUD about things that hve been debunked here and at TOD time and time again.

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  86. By armchair261 on August 5, 2011 at 7:28 pm

    Hoo boy, this is great stuff! The old “I don’t believe it” strategy. Well, post your own numbers. But you have no sources, so you have no credibility. You realize don’t you, that if you had enough time and resources, you would be able to verify these numbers. You could locate buyers and confirm the numbers. 

    Iranian oil is not exported to the US. A drop in the Iranian oil price would not affect the US price,

    But Iran sells to other countries and the US buys from other countries. If Iranian oil is significantly higher than Brent or WTI, then buyers will stop buying Iranian, and start buying Brent and WTI. Demand for Brent and WTI will increase, and so will their prices. If Iranian oil is for example 20% lower than Brent or WTI, then buyers will stop buying Brent and WTI (i.e. demand for those crudes would drop), and start buying Iranian (demand and prices for it would rise).

    You seem to believe it’s possible for gold to be selling in New York for $2000 and ounce, and in Amsterdam for $1800. That’s not possible for gold, because arbitragers will eliminate the difference until there is equilibrium (might take a fraction of a second). Same is true for oil. A barrel of Iranian oil is the same stuff, essentially, as a barrel of Brent. So why would anyone pay a large premium for one over the other? You fail to realize that oil, like gold, is a global market. You may have heard that the US buys 2/3 of its oil from overseas, including Canada, Mexico, OPEC, and Russia. It’s a global market. 

    because as mentioned in one of my previous comments, the US oil price is determined by those who control the crude oil futures markets, not OPEC, not Iran, not Libya, not China, not India and not the laws of supply and demand.

    Just because you mentioned it does not mean it’s correct (in fact we’d be safe to assume the opposite). OPEC has no influence on US oil prices. Smile An interesting theory. I suppose you’re too young to remember the Arab oil embargo. Or the Saudis flooding the market to increase market share in the mid 1980′s.

    US prices are determined by the crude oil futures markets within the US, so the US oil price does not correlate to the Iranian price.

    Provide some evidence for this please.

    The Iranian oil price must be copycating the US price.

    You just said there was no correlation. They are somehow managing to copy US prices without being correlated. Cool! 

    And tell me, why would Iran copy US prices when US prices are falling? 

    [link]      
  87. By EarlRichards on August 5, 2011 at 5:51 pm

    EarlRichards said:

    Robert Rapier said:

    EarlRichards said:

    The Intercontinental Exchange is listed on the New York Stock Exchange and the symbol is ICE. ICE’s website is http://www.theice.com. The telephone is 770-857-4700.


     
    So the total annual income of an organization that controls oil prices is only a few hundred million dollars a year? Instead of letting oil companies have all of that profit, I would think they would try to squeeze a bit more out for their own organization.
    RR


     


     

    ICE makes a profit itself, plus the the oil companies, because as mentioned in one of my previous comments, Royal Dutch Shell and BP are owners of and shareholders in ICE.

    [link]      
  88. By armchair261 on August 5, 2011 at 6:08 pm

    Should we trust a guy who can’t even figure out how to post a comment with the fine details of oil markets and US energy policy? Laugh

    [link]      
  89. By EarlRichards on August 5, 2011 at 7:05 pm

    armchair261 said:

    A coincidence? LOL a 0.99 correlation coefficient over umpteen years is a coincidence?

     

    Click here for a plot of historical US oil prices.

     

    Now click here to see Iranian oil prices.

     

    Do you see any similarities?

     

    How about this one for Russia?

    Or this one for Venezuela?

    Or this one for Indonesia?

    Or this for Mexico?

    Or China here. Surely Big Oil doesn’t own China?

     

    If you bothered to check price data links, did you find that any of these plots look similar?


     

    These statistics are not believable, because they come from the same source, the Energy Information Administration. Where are the statistics for the Sisi Kerir Iran Spot Price from Iranian sources? Are they the same? I doubt it. I believe the EIA’s info on the NYMEX is correct, but not on the Sidi Kerir.

     

    As mentioned in my previous comments, the US and Iran do not exchange ambassadors, so I doubt very much if the Iranian leaders would drop their oil prices help the US with its recession. The US and Iran do not formally recognize each other. Iranian oil is not exported to the US. A drop in the Iranian oil price would not affect the US price, because as mentioned in one of my previous comments, the US oil price is determined by those who control the crude oil futures markets, not OPEC, not Iran, not Libya, not China, not India and not the laws of supply and demand. US prices are determined by the crude oil futures markets within the US, so the US oil price does not correlate to the Iranian price. The Iranian oil price must be copycating the US price.

    [link]      
  90. By armchair261 on August 5, 2011 at 7:34 pm

    I believe the EIA’s info on the NYMEX is correct, but not on the Sidi Kerir.

    What about the EIA’s info on Mexican, Venezuelan, Saudi Arabian, and Russian oil? The US buys oil from those countries and the EIA has this information. So you’re saying here that all crudes have very similar price histories. Except Iran’s. If we had the real Iranian data, you believe, it would be the only country that has a different price history. Is that correct?

    [link]      
  91. By moiety on August 5, 2011 at 8:54 pm

    EarlRichards said:

     

    As mentioned in my previous comments, the US and Iran do not exchange ambassadors,


     

    Ah yes but they work together in making the price of gas go up and down on their whim. That is what you said isn’t it. I may be somewhat dyslexic and Irish but you do talk but alot of gibberish.

    [link]      
  92. By EarlRichards on August 5, 2011 at 9:03 pm

    armchair261 said:

    Hoo boy, this is great stuff! The old “I don’t believe it” strategy. Well, post your own numbers. But you have no sources, so you have no credibility. You realize don’t you, that if you had enough time and resources, you would be able to verify these numbers. You could locate buyers and confirm the numbers. 

    Iranian oil is not exported to the US. A drop in the Iranian oil price would not affect the US price,

    But Iran sells to other countries and the US buys from other countries. If Iranian oil is significantly higher than Brent or WTI, then buyers will stop buying Iranian, and start buying Brent and WTI. Demand for Brent and WTI will increase, and so will their prices. If Iranian oil is for example 20% lower than Brent or WTI, then buyers will stop buying Brent and WTI (i.e. demand for those crudes would drop), and start buying Iranian (demand and prices for it would rise).

    You seem to believe it’s possible for gold to be selling in New York for $2000 and ounce, and in Amsterdam for $1800. That’s not possible for gold, because arbitragers will eliminate the difference until there is equilibrium (might take a fraction of a second). Same is true for oil. A barrel of Iranian oil is the same stuff, essentially, as a barrel of Brent. So why would anyone pay a large premium for one over the other? You fail to realize that oil, like gold, is a global market. You may have heard that the US buys 2/3 of its oil from overseas, including Canada, Mexico, OPEC, and Russia. It’s a global market. 

    because as mentioned in one of my previous comments, the US oil price is determined by those who control the crude oil futures markets, not OPEC, not Iran, not Libya, not China, not India and not the laws of supply and demand.

    Just because you mentioned it does not mean it’s correct (in fact we’d be safe to assume the opposite). OPEC has no influence on US oil prices. Smile An interesting theory. I suppose you’re too young to remember the Arab oil embargo. Or the Saudis flooding the market to increase market share in the mid 1980′s.

    US prices are determined by the crude oil futures markets within the US, so the US oil price does not correlate to the Iranian price.

    Provide some evidence for this please.

    The Iranian oil price must be copycating the US price.

    You just said there was no correlation. They are somehow managing to copy US prices without being correlated. Cool! 

    And tell me, why would Iran copy US prices when US prices are falling? 


     

    EarlRichards said:

    armchair261 said:

    A coincidence? LOL a 0.99 correlation coefficient over umpteen years is a coincidence?

     

    Click here for a plot of historical US oil prices.

     

    Now click here to see Iranian oil prices.

     

    Do you see any similarities?

     

    How about this one for Russia?

    Or this one for Venezuela?

    Or this one for Indonesia?

    Or this for Mexico?

    Or China here. Surely Big Oil doesn’t own China?

     

    If you bothered to check price data links, did you find that any of these plots look similar?


     
    These statistics are not believable, because they come from the same source, the Energy Information Administration. Where are the statistics for the Sisi Kerir Iran Spot Price from Iranian sources? Are they the same? I doubt it. I believe the EIA’s info on the NYMEX is correct, but not on the Sidi Kerir.

     

    As mentioned in my previous comments, the US and Iran do not exchange ambassadors, so I doubt very much if the Iranian leaders would drop their oil prices help the US with its recession. The US and Iran do not formally recognize each other. Iranian oil is not exported to the US. A drop in the Iranian oil price would not affect the US price, because as mentioned in one of my previous comments, the US oil price is determined by those who control the crude oil futures markets, not OPEC, not Iran, not Libya, not China, not India and not the laws of supply and demand. US prices are determined by the crude oil futures markets within the US, so the US oil price does not correlate to the Iranian price. The Iranian oil price must be copycating the US price.


     

    If the US buys from other countries, it won’t affect the US price, because as mentioned before, the US price determined by the market manipulations of the traders and the excessive demand speculators in the NYMEX and the “round-trip” trades in the ICE. It is hard to find the evidence because ICE operates outside of US law and does not have open their books to anyone. For an overview on ICE, google the “Global Oil Scam” and the “London Loophole.” You do not seem to understand the dynamics and the large size of excessive demand speculation. Big Oil and the big banks own ICE and large shareholdings in ICE, so that could be the evidence that they control the crude oil futures market through ICE. OPEC and the others do not have influence over ICE, and as mentioned in a previous comment, over 80% of crude oil futures trading, is traded through the unregulated ICE. Read “The Tryanny of Oil” by Antonia Juhasz  and “Oil Power” by Tom Bower. These two authors explain how Big Oil controls the oil price in the US, and not OPEC and others. You can be rest assured that American Big Oil controls the price of oil in the US and not outsiders.

     

    In a previous comment, you stated the US oil price is coorelated to the Iranian price, not me, and provided the statistics to prove it. So if the US price falls, then, why does not the Iranian price fall, probably, because they were never collated in the first place. In my opinion, the EIA’s info for the other countries is the same as Iran. I would like to see info on those countries that originate from those and not the EIA.

     

    The crude oil futures markets never became deregulated until the year 2000, so this markets would have influence over events that occurred in the mid 1980′s.

    [link]      
  93. By armchair261 on August 5, 2011 at 9:36 pm

    If the US buys from other countries, it won’t affect the US price,

    So let’s say you run a large refinery in Louisiana. If Venezuelan Tia Juana is selling for $90 per barrel, and WTI is selling for $100, which would you buy? In 1986, the Saudis opened the taps and flooded the world with oil. Oil prices in the US collapsed. 

    because as mentioned before, the US price determined by the market manipulations of the traders and the excessive demand speculators in the NYMEX and the “round-trip” trades in the ICE.

    Earl, this is not a fact. This is your belief. Do you know the difference?

    It is hard to find the evidence because ICE operates outside of US law and does not have open their books to anyone.

    Then how do you know what goes on inside ICE? You have a buddy working there or something?

    You do not seem to understand the dynamics and the large size of excessive demand speculation.

    No I guess I don’t. :-) Please explain, with evidence. Pretend I’m a judge. Your words alone aren’t enough. Anecdotal quotes from like minded and equally ignorant authors would be dismissed by any judge.

    Big Oil and the big banks own ICE and large shareholdings in ICE, so that could be the evidence that they control the crude oil futures market through ICE.

    Could be! That’s good enough for me! All you have to do to establish guilt is privide a motive. Is that how you think justice should work?

    OPEC and the others do not have influence over ICE, and as mentioned in a previous comment, over 80% of crude oil futures trading, is traded through the unregulated ICE. Read “The Tryanny of Oil” by Antonia Juhasz  and “Oil Power” by Tom Bower.

    Bower and Juhasz have no technical training and no oil industry experience. I wonder why you believe them so uncritically. Could it be ideology?

    These two authors explain how Big Oil controls the oil price in the US, and not OPEC and others. You can be rest assured that American Big Oil controls the price of oil in the US and not outsiders.

     So why do oil prices all over the world match US prices so closely? This is easy to confirm, and there are mountains of evidence to back it up. You don’t explain why oil falls in other countries when it falls in the US.

    In a previous comment, you stated the US oil price is coorelated to the Iranian price, not me, and provided the statistics to prove it.

    Ah so the prices ARE correlated? LOL I thought you didn’t believe them? Now you do?

    So if the US price falls, then, why does not the Iranian price fall, probably, because they were never collated in the first place.

    Prices in Iran will fall when US prices fall, and they have done so in the past. You could ask any Iranian seller and he would confirm that for you. But that’s too much effort for you to find out, and besides, ignorance is bliss.

    In my opinion, the EIA’s info for the other countries is the same as Iran. I would like to see info on those countries that originate from those and not the EIA.

     Sure, if data contradicts you, just say “I don’t believe it.” But you never seem to have any alternative data to support your case. We can conclude from this that your case is based on ideology alone, You can find no data to back you up.

    The crude oil futures markets never became deregulated until the year 2000, so this markets would have influence over events that occurred in the mid 1980′s.

    The same arguments about CEO’s controlling oil prices were prevalent in the early 1980′s. They were just as insistent as you are. And then low prices for 20 years proved them wrong.

    Average annual WTO spot oil prices:

    2000: $30.38

    2001: $25.98

    2002: $26.18

    What’s going on here, Earl? Did the bandits need a few years practice before the party started? 

    [link]      
  94. By armchair261 on August 5, 2011 at 9:51 pm

    In my opinion, the EIA’s info for the other countries is the same as Iran. I would like to see info on those countries that originate from those and not the EIA.

    If you were really interested in finding out, you could consult multiple sources, and/or speak with sellers. But I don’t think you really want to know, do you.

     

    The International Energy Agency, an arm of the UN based in Paris, also publishes price data.

    You can see it here 

    http://omrpublic.iea.org/price…..search.asp

    Select “Physical Crude Prices by Region” and compare prices from all over the world. You will see that foreign prices closely track US prices, even when US prices drop. You will see prices that are in agreement with EIA prices.

    Or you could subscribe to a service ike this one

    http://www.businessmonitor.com…..bAod13Qz4w

    and get another source of prices.

     

    So let’s imagine you consulted these sources. You talked to Iranian sellers. You would find out that you were wrong. What would be next? Would you admit it? Or find some other nonsense to cling to? Of course, we know the answer to that one!

    [link]      
  95. By russ-finley on August 6, 2011 at 12:29 am

    Another nice one Robert, but you are trying to reason with a public where 80% don’t buy the theory of evolution. Reality is whatever they want it to be. The human capacity for self-deception is vast.

    [link]      
  96. By EarlRichards on August 6, 2011 at 5:47 am

        armchair261 said:

    If the US buys from other countries, it won’t affect the US price,

    So let’s say you run a large refinery in Louisiana. If Venezuelan Tia Juana is selling for $90 per barrel, and WTI is selling for $100, which would you buy? In 1986, the Saudis opened the taps and flooded the world with oil. Oil prices in the US collapsed. 

    because as mentioned before, the US price determined by the market manipulations of the traders and the excessive demand speculators in the NYMEX and the “round-trip” trades in the ICE.

    Earl, this is not a fact. This is your belief. Do you know the difference?

    It is hard to find the evidence because ICE operates outside of US law and does not have open their books to anyone.

    Then how do you know what goes on inside ICE? You have a buddy working there or something?

    You do not seem to understand the dynamics and the large size of excessive demand speculation.

    No I guess I don’t. :-) Please explain, with evidence. Pretend I’m a judge. Your words alone aren’t enough. Anecdotal quotes from like minded and equally ignorant authors would be dismissed by any judge.

    Big Oil and the big banks own ICE and large shareholdings in ICE, so that could be the evidence that they control the crude oil futures market through ICE.

    Could be! That’s good enough for me! All you have to do to establish guilt is privide a motive. Is that how you think justice should work?

    OPEC and the others do not have influence over ICE, and as mentioned in a previous comment, over 80% of crude oil futures trading, is traded through the unregulated ICE. Read “The Tryanny of Oil” by Antonia Juhasz  and “Oil Power” by Tom Bower.

    Bower and Juhasz have no technical training and no oil industry experience. I wonder why you believe them so uncritically. Could it be ideology?

    These two authors explain how Big Oil controls the oil price in the US, and not OPEC and others. You can be rest assured that American Big Oil controls the price of oil in the US and not outsiders.

     So why do oil prices all over the world match US prices so closely? This is easy to confirm, and there are mountains of evidence to back it up. You don’t explain why oil falls in other countries when it falls in the US.

    In a previous comment, you stated the US oil price is coorelated to the Iranian price, not me, and provided the statistics to prove it.

    Ah so the prices ARE correlated? LOL I thought you didn’t believe them? Now you do?

    So if the US price falls, then, why does not the Iranian price fall, probably, because they were never collated in the first place.

    Prices in Iran will fall when US prices fall, and they have done so in the past. You could ask any Iranian seller and he would confirm that for you. But that’s too much effort for you to find out, and besides, ignorance is bliss.

    In my opinion, the EIA’s info for the other countries is the same as Iran. I would like to see info on those countries that originate from those and not the EIA.

     Sure, if data contradicts you, just say “I don’t believe it.” But you never seem to have any alternative data to support your case. We can conclude from this that your case is based on ideology alone, You can find no data to back you up.

    The crude oil futures markets never became deregulated until the year 2000, so this markets would have influence over events that occurred in the mid 1980′s.

    The same arguments about CEO’s controlling oil prices were prevalent in the early 1980′s. They were just as insistent as you are. And then low prices for 20 years proved them wrong.

    Average annual WTO spot oil prices:

    2000: $30.38

    2001: $25.98

    2002: $26.18

    What’s going on here, Earl? Did the bandits need a few years practice before the party started? 

           

     

    Would Saudi Arabia sell oil to the US government at $90 per barrel or for $120 on the international market? Venezuelan Tia Juana would not sell its oil to a refinery at $90 per barrel, when it could get $100 on the international market.

     

    Market manipulation and excessive demand speculation determine as much as 60% of the US oil price. This is not my belief, it is a historical fact, so no evidence is required. Google “NYMEX – excessive demand speculation” and the “Enron Loophole.” These articles explain excessive demand speculation. It is a US regulatory problem of malign neglect.

     

    What is LOL?

     

    Both Juhasz and Bower do not have technical knowledge on how to maintain a refinery, but do have extensive knowlege of and experience in the oil industry. Sometimes, I wonder if your sources of info come from the local radio disc jockey.

    [link]      
  97. By russ-finley on August 7, 2011 at 11:26 am

    I started to watch a documentary called Gashole last night but I couldn’t get through it. It’s a complete fabrication and is yet another example of why the  American public remains so ignorant about energy issues. There is no such thing as a 100 mpg carburatror. Kinda funny … cars don’t even use naturally aspirated carbs anymore. It’s good to continue to try to educate the public RR, but you are competing with films like this.

     

    [link]      
  98. By rrapier on August 7, 2011 at 4:55 pm

    Russ Finley said:

    It’s good to continue to try to educate the public RR, but you are competing with films like this.


     

    Then I must start lobbying for a mandate: Everyone must read my book when it comes out. :)

    Speaking of which, the nuclear chapter will be finished today.

    RR

    [link]      
  99. By addoeh on August 6, 2011 at 7:53 am

    Market manipulation and excessive demand speculation determine as much as 60% of the US oil price. This is not my belief, it is a historical fact, so no evidence is required.

    This could filed under the “Over 90% of all statistics are made up on the spot” category.

    Google “NYMEX – excessive demand speculation” and the “Enron Loophole.” These articles explain excessive demand speculation. It is a US regulatory problem of malign neglect.

    Ironically enough, I Googled both those phrases. And for both, I used the I’m Feeling Lucky feature. This feature takes me to the first search result for what I search for, so it should be the most popular and the most likely match. For “NYMEX – excessive demand speculation”, the I’m Feeling Lucky button takes me to this very article! For “Enron Loophole”, it takes me to the Wikipedia article on the subject. Looks like the Enron Loophole was closed in 2008!

    [link]      
  100. By dissent555 on August 6, 2011 at 10:19 am

    EarlRichards said:

     

     

    Both Juhasz and Bower do not have technical knowledge on how to maintain a refinery, but do have extensive knowlege of and experience in the oil industry. Sometimes, I wonder if your sources of info come from the local radio disc jockey.


     

    Earl,

     

    a) y’know, you can edit the quoted parts of your posts for the sake of clarity. You don’t have to include the entire quote. You can also click on the Preview icon on the top of your Reply to Topic window to have a look at your post before you click on Post New Reply.

     

    b) ok, there is a bio for Juhasz at –   http://www.tyrannyofoil.org/ 

    (click on About Antonia, and then on Biographical Information  

    I see some writing and speaking about oil, the BP spill, Bush and the Iraq War. I see her educational credentials as being

     

     

    “a Masters Degree in Public Policy from Georgetown University and a Bachelors Degree in Public Policy from Brown University.”

    What I don’t see is any of the “expereince in the oil industry” that you claim. Care to clarify, with sources?

     

     

     

     

    [link]      
  101. By rrapier on August 6, 2011 at 1:33 pm

    dissent555 said:

     

    Earl,

     

    a) y’know, you can edit the quoted parts of your posts for the sake of clarity. You don’t have to include the entire quote. You can also click on the Preview icon on the top of your Reply to Topic window to have a look at your post before you click on Post New Reply.


     

    True, Earl, you should probably use the preview function to test your posts to see if the formatting is correct. The other is that if you sign up for a user name and password, I think you can edit your posts if you need to change something. I have an edit function as an admin, but I believe signed in members can as well.

    RR

    [link]      
  102. By EarlRichards on August 6, 2011 at 2:30 pm

    Robert Rapier said:

    dissent555 said:

     

    Earl,

     

    a) y’know, you can edit the quoted parts of your posts for the sake of clarity. You don’t have to include the entire quote. You can also click on the Preview icon on the top of your Reply to Topic window to have a look at your post before you click on Post New Reply.


     
    True, Earl, you should probably use the preview function to test your posts to see if the formatting is correct. The other is that if you sign up for a user name and password, I think you can edit your posts if you need to change something. I have an edit function as an admin, but I believe signed in members can as well.

    RR


     

    Thanks for the tips, my computer skills are not the greatest. ER

    [link]      
  103. By EarlRichards on August 6, 2011 at 2:33 pm

    Addoeh said:

    Market manipulation and excessive demand speculation determine as much as 60% of the US oil price. This is not my belief, it is a historical fact, so no evidence is required.

    This could filed under the “Over 90% of all statistics are made up on the spot” category.

    Google “NYMEX – excessive demand speculation” and the “Enron Loophole.” These articles explain excessive demand speculation. It is a US regulatory problem of malign neglect.

    Ironically enough, I Googled both those phrases. And for both, I used the I’m Feeling Lucky feature. This feature takes me to the first search result for what I search for, so it should be the most popular and the most likely match. For “NYMEX – excessive demand speculation”, the I’m Feeling Lucky button takes me to this very article! For “Enron Loophole”, it takes me to the Wikipedia article on the subject. Looks like the Enron Loophole was closed in 2008!


     

    The Enron Loophole is not closed and it is still missing-up the economy and prologing the recession.

    [link]      
  104. By EarlRichards on August 6, 2011 at 2:41 pm

    dissent555 said:

    EarlRichards said:

     

     

    Both Juhasz and Bower do not have technical knowledge on how to maintain a refinery, but do have extensive knowlege of and experience in the oil industry. Sometimes, I wonder if your sources of info come from the local radio disc jockey.


     
    Earl,

     

    a) y’know, you can edit the quoted parts of your posts for the sake of clarity. You don’t have to include the entire quote. You can also click on the Preview icon on the top of your Reply to Topic window to have a look at your post before you click on Post New Reply.

     

    b) ok, there is a bio for Juhasz at –   http://www.tyrannyofoil.org/ 

    (click on About Antonia, and then on Biographical Information  

    I see some writing and speaking about oil, the BP spill, Bush and the Iraq War. I see her educational credentials as being

     

     

    “a Masters Degree in Public Policy from Georgetown University and a Bachelors Degree in Public Policy from Brown University.”

    What I don’t see is any of the “experience in the oil industry” that you claim. Care to clarify, with sources?

     

     

     

     


     

    Juhasz would have knowledge of the oil industry. I have read her book, “The Tyranny of Oil” thoroughly a few times.  You find a copy of this book, with the latest foreword, in http://www.tyrannyofoil.com. Chapter 4 describes the roots of the corruption of ICE.

    [link]      
  105. By EarlRichards on August 6, 2011 at 2:42 pm

    EarlRichards said:

    Addoeh said:

    Market manipulation and excessive demand speculation determine as much as 60% of the US oil price. This is not my belief, it is a historical fact, so no evidence is required.

    This could filed under the “Over 90% of all statistics are made up on the spot” category.

    Google “NYMEX – excessive demand speculation” and the “Enron Loophole.” These articles explain excessive demand speculation. It is a US regulatory problem of malign neglect.

    Ironically enough, I Googled both those phrases. And for both, I used the I’m Feeling Lucky feature. This feature takes me to the first search result for what I search for, so it should be the most popular and the most likely match. For “NYMEX – excessive demand speculation”, the I’m Feeling Lucky button takes me to this very article! For “Enron Loophole”, it takes me to the Wikipedia article on the subject. Looks like the Enron Loophole was closed in 2008!


     
    The Enron Loophole is not closed and it is still missing-up the economy and prologing the recession.


     

    EarlRichards said:

    Addoeh said:

    Market manipulation and excessive demand speculation determine as much as 60% of the US oil price. This is not my belief, it is a historical fact, so no evidence is required.

    This could filed under the “Over 90% of all statistics are made up on the spot” category.

    Google “NYMEX – excessive demand speculation” and the “Enron Loophole.” These articles explain excessive demand speculation. It is a US regulatory problem of malign neglect.

    Ironically enough, I Googled both those phrases. And for both, I used the I’m Feeling Lucky feature. This feature takes me to the first search result for what I search for, so it should be the most popular and the most likely match. For “NYMEX – excessive demand speculation”, the I’m Feeling Lucky button takes me to this very article! For “Enron Loophole”, it takes me to the Wikipedia article on the subject. Looks like the Enron Loophole was closed in 2008!


     
    The Enron Loophole is not closed and it is still missing-up the economy and prolonging the recession.


     

    [link]      
  106. By rrapier on August 6, 2011 at 2:59 pm

    EarlRichards said:

     

    Thanks for the tips, my computer skills are not the greatest. ER


     

    I just had another idea. There are two way to comment, and the comments show up in both places. You can click on a story and leave a comment at the end of the story, but then I think the editing tools are more limited. You can also click on the forum activity over in a colum to the right of the home page, and comment from there. There is a bigger set of editing tools there that are probably easier if that’s not what you have been doing. Either way, try both ways and see which one works best for you.

    RR

    [link]      
  107. By armchair261 on August 6, 2011 at 3:59 pm

    Earl.

    Juhasz would have knowledge of the oil industry.

    Maybe. But she has no known technical training in related disciplines, and no known experience in it. You are unable to provide any evidence of this. Therefore all her writing is from the outside, speculating about how the industry works. Additionally, she has a clear political bias and is therefore not objective. To put in another way, she has about as much knowledge of the oil industry as she has in heart surgery. Would you let her operate on your son if she wrote a book on heart surgery?

    The Enron Loophole is not closed and it is still missing-up the economy and prologing the recession.

    And yet oil prices fell by 70% a few years ago and 10% last week. Natural gas is 50% cheaper than it was a few years ago.

    Sometimes, I wonder if your sources of info come from the local radio disc jockey.

    My sources of information come mainly from 35 years of experience in the industry. I know how it works from first hand knowledge. I don’t have to read books by inexperienced dilettantes to feed my ideological requirements.

    Would Saudi Arabia sell oil to the US government at $90 per barrel or for $120 on the international market?

    Exactly. And what do you think the Saudis would do with their $120 barrels destined for the US if Obama suddenly said “You only get $90 from now on.”
    You naively believe they’d meekly comply. They would not. They would sell those barrels elsewhere. As US producers would try to do. You imagine that there would be no unintended consequences, as if any nation can simply dictate a price for any commodity, and that suppliers of that commodity would not react. They would, and in ways that history teaches would invariably be more harmful than helpful.

    Market manipulation and excessive demand speculation determine as much as 60% of the US oil price. This is not my belief, it is a historical fact, so no evidence is required.

    This is a belief, not a fact. What you show here is that you don’t know what the difference is. A lot of people and institutions dispute this, so it’s not a fact.

    A fact is something like, oh, the average weekly price Iranian Sirri sold for over the last 20 years. What that price actually has been can’t effectively be denied.

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  108. By paul-n on August 9, 2011 at 2:43 am

    Then I must start lobbying for a mandate: Everyone must read my book when it comes out. :)

    RR – haven;t you learned anything from watching how the ethanol industry does it?

    Requiring all people to buy 100% RR books is just too much of a change – it is not compatible with current programming of their brains

    You need to lobby for a mandate that 10% of all book pages printed must be your book.  Then, you can ask for “binders credit” of 0.45c per page.  Some people would call this credit redundant, like paying drivers to obey the speed limit, but the correct spin is that it is a “belt and suspenders” approach, making “doubly sure” of success.

    Then, the book binders can then sell those pages either as 100% RR (unlikely), or “denature” it with RR85% and 15% regular book pages, or more likely, bind RR10% of your book pages into all the others, in the hope that no one really notices.  

     

    Of course, this would totally defeat the purpose of educating the public and/or saving energy, but it would sell a lot of your product while collecting lots of government subsidy for what you are already doing.  It seems to work for you-know-who.

     

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  109. By paul-n on August 9, 2011 at 2:51 am

    @ Earl Richards,

     

    Earl, if you are going to continue posting here, I do recommend, at the very least, to stop using “quote and reply” , but better still, as RR suggests, singing up as a member on Consumer Energy Report, and view all the blog posts in the Forums.  The viewing format is much better, easier to search, see the latest updated blogs, there are very simple to use HTML tools for doing formatting and inserting links/pictures etc.  And you can edit your posts after you have posted them, even after someone else has commented on them.

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  110. By earlrichards on August 11, 2011 at 1:47 pm

    EarlRichards said:

    Addoeh said:

    Market manipulation and excessive demand speculation determine as much as 60% of the US oil price. This is not my belief, it is a historical fact, so no evidence is required.

    This could filed under the “Over 90% of all statistics are made up on the spot” category.

    Google “NYMEX – excessive demand speculation” and the “Enron Loophole.” These articles explain excessive demand speculation. It is a US regulatory problem of malign neglect.

    Ironically enough, I Googled both those phrases. And for both, I used the I’m Feeling Lucky feature. This feature takes me to the first search result for what I search for, so it should be the most popular and the most likely match. For “NYMEX – excessive demand speculation”, the I’m Feeling Lucky button takes me to this very article! For “Enron Loophole”, it takes me to the Wikipedia article on the subject. Looks like the Enron Loophole was closed in 2008!


     
    The Enron Loophole is not closed and it is still messing-up the economy and prolonging the recession.


     

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  111. By earlrichards on August 11, 2011 at 1:49 pm

    EarlRichards said:

    Addoeh said:

    Market manipulation and excessive demand speculation determine as much as 60% of the US oil price. This is not my belief, it is a historical fact, so no evidence is required.

    This could filed under the “Over 90% of all statistics are made up on the spot” category.

    Google “NYMEX – excessive demand speculation” and the “Enron Loophole.” These articles explain excessive demand speculation. It is a US regulatory problem of malign neglect.

    Ironically enough, I Googled both those phrases. And for both, I used the I’m Feeling Lucky feature. This feature takes me to the first search result for what I search for, so it should be the most popular and the most likely match. For “NYMEX – excessive demand speculation”, the I’m Feeling Lucky button takes me to this very article! For “Enron Loophole”, it takes me to the Wikipedia article on the subject. Looks like the Enron Loophole was closed in 2008!


     
    The Enron Loophole is not closed and it is still messing-up the economy and prolonging the recession.


     

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  112. By Optimist on August 31, 2011 at 8:46 pm

    The EarlRichards Loophole is not closed and it is still messing-up this discussion.

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  113. By David on April 10, 2012 at 2:01 pm

    The house market/oil market analogy doesn’t really hold water.  The average person isn’t going around filling up on dozens of houses every week. 

    Further as per your analogy if an oil company sells gas at a lower price, the gas station across the street is going to come over with buckets and take the gas back to their station where they’ll resell it at a higher price… because apparently this is something they’ll manage to do before they lose any business to the station selling cheaper gas.

    It’s a little bit silly. 

    If your end product is cheaper than your competitor’s you will generally score more business.  When Commodore priced their computers below the competition, Apple didn’t go around buying up Commodore 64s at $300 a pop so they could resell them at Apple prices of $1400. 

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  114. By Robert Rapier on April 10, 2012 at 2:41 pm

    The house market/oil market analogy doesn’t really hold water.  The average person isn’t going around filling up on dozens of houses every week. 

    That doesn’t matter. They are priced the same way — by whatever the market is paying. 

    Further as per your analogy if an oil company sells gas at a lower price, the gas station across the street is going to come over with buckets and take the gas back to their station where they’ll resell it at a higher price

    Gasoline prices aren’t high as a result of mark-up at the gas station. They are high because the underlying price of oil is high. If someone was selling oil for under market price, I can assure you that someone else will buy it and resell it at market price — just like with the house.

    If your end product is cheaper than your competitor’s you will generally score more business.

    People often get confused in thinking that oil is priced like Nikes or computers: Add up your costs and then figure out an acceptable profit margin. But that is not how oil is price. If Nikes were priced like that, we would auction them off and the profit margins would be based on what bidders were willing to pay. That’s how oil is priced.

    RR

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