[antimedia] antimedia: There isn't much that's more hypocritical....

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Posted by antimedia:
There isn't much that's more hypocritical....
http://www.antimedia.us/posts/1179280587.shtml


   ....than [1]political demagoguery against oil companies. The media
   should be especially ashamed of themselves for not confronting
   politicians and not informing the American public.

     Interviewing Shell Oil's President on Monday's Today show, NBC's
     Meredith Vieira cited Democratic Senator Chuck Schumer's "Big Oil"
     conspiracy theory, worried America's "addiction to oil" was
     "dangerous," and altogether added fuel to the fire that oil company
     execs, "were a bunch of thieves." Appearing in the 7am half-hour,
     Shell Oil President John Hofmeister, for the most part, explained
     the basic economics of the oil business to viewers but that didn't
     stop Vieira from throwing out conspiratorial charges from
     left-field about supply being held back.
     [......]
     Then after Hofmeister denied the charge of collusion, Vieira
     attempted to play the populist role noting, "among certain
     consumers," there is a belief "the oil companies are a bunch of
     thieves," that, "are ripping people off." Vieira: "I'm picturing
     some people watching us right now at home and they're probably
     screaming at the television because they just went to the pump,
     they shelled out maybe $50 or more to fill up their car. They also
     know that companies like Shell are posting record profits. In the
     first quarter of this year, I think the profits for Shell were over
     $7 billion. Now it may not be fair, it may not be right but there
     is a perception out there in the country, among certain consumers,
     that the oil companies are a bunch of thieves. That you're ripping
     people off. Now I know you've been going around the country talking
     to people in 50 cities. What are they saying to you and what are
     you saying back to them?"

   If the media were responsible, they would tell you that gas supplies
   are so tight because new refineries aren't being built, so oil
   companies can't keep up with the national demand.
   Did you know that there hasn't been a new refinery built in the US in
   [2]the last 25 years. Why? Environmentalists fight them every step of
   the way, and Congress has made the application process so labyrinthine
   that no one wants to undergo the process any more.

     Why does the industry appear to have built its last refinery?
     Three reasons: Refineries are not particularly profitable,
     environmentalists fight planning and construction every step of the
     way and government red-tape makes the task all but impossible. The
     last refinery built in the US was in Garyville, Louisiana, and it
     started up in 1976.
     Energy proposed building a refinery near Portsmouth, Virginia, in
     the late 1970s, environmental groups and local residents fought the
     plan -- and it took almost nine years of battles in court and
     before federal and state regulators before the company cancelled
     the project in 1984.
     Industry officials estimate the cost of building a new refinery at
     between $ 2 bn and $ 4 bn -- at a time the industry must devote
     close to $ 20 bn over the next decade to reducing the sulphur
     content in gasoline and other fuels -- and approval could mean
     having to collect up to 800 different permits. As if those hurdles
     weren't enough, the industry's long-term rate of return on capital
     is just 5 % -- less than could be realized by simply buying US
     Treasury bonds.
     "I'm sure that at some point in the last 20 years someone has
     considered building a new refinery," says James Halloran, an energy
     analyst with National City Corp. "But they quickly came to their
     senses," he adds.

   Of course, the oil industry is more complex than just refining
   capacity. Both China and India are putting pressure on world oil
   supplies as their economies grow and their demand for oil increases.
   But US refinery capacity is certainly a large part of the problem.
   Saying that Shell made $7 billion in profits less quarter is
   meaningless. In relation to what gross income? If you can make more
   with savings bonds, who would want to roll the dice building a new
   refinery?
   [3]In 2006 Royal Dutch Shell had operating revenues of $318.845
   billion and made a net profit of $25.442 billion in net profits.
   That's just under an 8% return on investment. You can do much better
   than that buying a mutual fund that [4]invests in the S&P 500. Shell
   also paid $19.186 billion in taxes.
   To put that in perspective, how would you feel if for every dollar you
   earned from investments, you paid 6¢ in taxes and got to keep 8¢ for
   yourself? Might you look for a better investment?
   The next time you gripe about high prices at the pump, stop and think
   about this. States and the federal government make 75% as much profit
   as the oil companies just from the oil companies' efforts (and the
   government does no work and invests no money to get that return) and
   the government charges you as much as [5]an additional 50¢ per gallon
   every time you fill up. That's about [6]$73 BILLION in gas tax
   revenues annually!
   Now who's gouging whom?
   Tags: [7]oil [8]gas [9]prices [10]taxes

References

   1. http://www.mrc.org/cyberalerts/2007/cyb20070515.asp#2
   2. http://www.gasandoil.com/goc/news/ntn12966.htm
   3. http://www.marketwatch.com/tools/quotes/financials.asp?symb=RDSB
   4. http://www.marketwatch.com/tools/mutualfunds/100index.asp?tf=9&view=36
   5. http://www.gaspricewatch.com/usgastaxes.asp
   6. http://auto.howstuffworks.com/question417.htm
   7. http://technorati.com/tag/oil
   8. http://technorati.com/tag/gas
   9. http://technorati.com/tag/prices
  10. http://technorati.com/tag/taxes