Ethics and the Oil Industry
Monday, November 8, 2010
Does anybody Care?
As the US Economy continues to dive, unemployment persists at a level not seen since the Great Depression, and the US Federal Government sees fit to continually bailout big business, it escapes logic why the cost of oil once again, is on the rise.
The US oil companies would have us believe it has to do with the Middle East oil producing nations cutting back on production, therefore raising the price. The energy traders at the New York Stock Exchange shrug it off to supply and demand. Many theorize that America has billions of surplus barrels of oil. I believe it is pure greed from these entities. With so many Americans struggling to survive and just keep food on the table, would it not be ethical to enact a type of moratorium on fuel prices?
With the Freedom of Information Act working in full force, it is simple to find information on the World Wide Web that most industries would rather not have located. Take for example, the oil industry. As the price of gas at the pump changes daily, US oil companies continue to rake in huge profits. Even in the wake of the recent oil spill which has had a global affect, BP Oil, “the London-based company earned $1.79 billion from July through September, compared with $5.3 billion a year earlier. But the fact that BP returned to profits at all, coming after a loss of $17.2 billion in the second quarter, indicated the company's operations remain solid despite the spill” (Wardell, 2010).
This company set aside $40 Billion for the pending lawsuits and cleanup and helping to restore the affected economies. I do not know, how about dropping the price at the pump if the company really wants to effectively help out? It is speculated this spill will be felt for years to come. I wonder how many remember the Exxon Valdez spill caused by a drunken ship captain…
As congressional leaders begun having many meetings to discuss this issue, the oil company CEOs continue to lay claim a huge percentage of the profits (of course no dollar figure was given), is for creating new energy sources, really? Where are the charts and PowerPoint diagrams that consumers can review to ease our minds while we are again, paying between $3.00 and $4.00 for a gallon of gas? I find it interesting that when asked, not one executive was forthcoming with information related to the quarterly dividend payments to the stockholders. I am always flabbergasted by the laundry list of excuses these executives dribble out of their mouths.
Two of my personal favorites are, 1: Twice a year, each oil company shuts off part of their refinery distribution for routine maintenance. Sure enough, for two to four weeks the price of a gallon of gas will jump 10 to 20 cents. What I find interesting is when the price starts to drop again; why does the price not drop the entire amount of the increase? I have personally watched several of these inquisitions on the C-Span channel. I wonder why during the Senate/oil company meetings, this question is never asked. 2: The oil producing countries are cutting production to inflate prices. I think the United States Government believes the American public is clueless as to what is really going on. The congressional leaders raise their voice and appear to grill the oil execs with questions and when the meeting is over, it is a slap-on-the-wrist and “stop doing that!”, and life continues as it does. The Senate meeting appears to have been nothing more than a “dog and pony” show for the American public. Society needs to remember that congressional leaders do not have to pay for their own fuel. It continues to beg the question, who is watching out for the rest of us that do have to pay at the pump? It certainly will not be the futures traders at the New York Stock Exchange.
For those who do not understand futures, this is when traders...
References: Herszenhorn, R. (2008) As Gasoline Prices Soar, Politicians Fall Back on Familiar Solutions.
The New York Times. Retrieved November 6, 2010 from
Ray, W. (2008) Gas Price Investigation. Channel 7 WJHG.com. Retrieved November 8, 2010 from http://wjhg.com/news/headlines/ 18902929.html
United States Department of Labor (2010) Bureau of Labor Statistics. Employment Situation Summary. Retrieved from November 7, 2010 from: http://www.bls.gov/news.release/empsit.nr0.htm
Wardell, J. (2010) BP Oil Spill Cost Hits $40 Billion, Company Returns to Profit. Retrieved November 8, 2010 from http://www.huffingtonpost.com/2010/11/02/bp-oil-spill-costs-hit-40_n_777521.html
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