Some Perspective: Big Oil Style


I trend Right.  Actually, what I like to say is that I like being “Left” in a “Right” world.   That is, I enjoy the fact that there are armies of men and women out there who work their asses off so that our nation and world can be what it is.  Yet I also enjoy playing the role of individual freedom spoiler in my little life.

I like fighting for the little guy.  I like pullin’ for the underdog.  I want the immigrant to hit the big time.  And I want the oppressed to rise up…if only to become part of the machine.

And so it is that I enjoy getting my news from the Right.  I like hearing that the workers are working,  I like hearing what the folks who DO STUFF have to say.  Mostly I agree, often I don’t.  But every now and then I need to go the other way and get some of my “input” from the other side.  And when I get this urge, it usually takes the form of “opinion journalism”.  I.E. Talk radio or reading other blogs.

One of my favorites had an interesting post yesterday:

Wish I Could Write Like This:

But I can’t. That’ s why Bob Herbert has a column in The New York Times and neither you nor I do. This morning, he’s feeling a tad testy about his President and about those big oil companies.

Moe goes on to quote a story from the NY Times [ The SECOND most biased news outlet behind the Wall Street Journal ] as saying:

…how is it possible for anyone with any reasonable awareness of the nonstop carnage that has accompanied the entire history of giant corporations to believe that the oil companies, which are among the most rapacious players on the planet, somehow “had their act together” with regard to worst-case scenarios . . .

Indeed.  And yet it continues:

These are greedy merchant armies drilling blindly at depths a mile and more beneath the seas

Remember.  Greedy.

And finally:

they are closing in on the kinds of profits that ancient kingdoms could only envy.

My.  So much to work with.

First, let’s deal with the first.  Moe’s quoted story attempts to discuss the fact that the oil companies do, or rather–don’t, address “worst case scenarios”.  I would posit that is poppy-cock.

Consider, if you will, that this spill has yet to crack the top 10 worst of all time [ though it most assuredly will ].  The context of the spill is certainly important when discussing an industry that is composed of “giant corporations”.  And to add to that context, note that the spill would have to continue spilling as it is today for 139 more days before topping the list.

But the REAL story is how well the oil industry is doing in preventing these massive spills in the first place.  From the same story above comes this important piece of information:

Even better news is the declining frequency of major oil spills.  Some evidence of this healthy trend is the fact that the average time that elapsed between each of history’s top ten accidental oil spills prior to BP Deepwater was 26 months.

Got that?  Call each spill that breaks the top 10 an “Event”.  The average time between events has been 26 months.

The LAST time the world saw such an event?

But the amount of time between the most recent of these top-ten spills (which occurred in September 1994) and the BP Deepwater spill is 187 months.

More than 15 years ago.

The second claim that Moe’s valiant reporter makes is that of “greedy merchants” drilling “a mile and more beneath the seas”.

Greed is a funny thing.  Let’s face it, we’re all greedy.  It’s what makes this possible.  It’s what drives each of us to go in search of, ahem, the cheapest gallon of gas we can find.  Rather than condemn greed, we should at least allow that it serves a purpose.

But the whole “a mile and more” thing really fires me up.  Who, does the gentle author suppose, forced the oil companies to drill at such depths?  Why, it would be the very Leftists that he is currently sharing martinis with at this very moment.

Finally, finally, we get to profits.

Profit.  Next to greed perhaps the most ugly of words to the Leftist.  Why?  Not important.  Not now.  Let’s just look at profits:

On the margin. The oil industry urges people to look beyond its profits to its profit margin: about 7.6 percent of revenues late last year. That’s not much higher than the 5.8 percent profit margin for all U.S. manufacturing, and if you exclude the financially troubled auto industry from that analysis, the oil industry actually appears less profitable than most manufacturers, which were earning 9.2 cents on every dollar of sales.

So really, oil isn’t more profitable than many other businesses, or industries.  Rather, because of the vast amount of money required to drill a mile or more beneath the water, the numbers are just awesome.

Let’s face it.  The damage is going to be immense.  The oil spilling is vast.  The fact that BP has work to do is accepted world-wide.  But this isn’t unprecedented, unexpected or surprising.

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9 comments
  1. Moe said:

    Herbert wrote his column in a mood of anger and I am there with him – for me it’s not just anger at the oil companies, it’s anger at us, all of us, for keeping our heads in the sand. In the 70’s, after Nixon created the EPA, the country was energized about planning for a cleaner future and clean energy was an important element. Solar and battery research got under way with gov’t grants. The public support was there because in those days air and water pollution were so bad that lakes were on fire.

    But that all changed in 1980. The Reagan administration put people into the agencies who shut most of that activity down.
    .
    Hebert was not disparaging American business or the pursuit of profit; he was disparaging the mega corporations, who are no more American than the rain. They have no borders; and when corporations, whose reason for being is to create profit for shareholders, are allowed to operate with minimum regulation, it’s screw the stakeholders. And that is us, those are OUR three American states whose economies and cultures are being threatened.

    Let us stipulate that profit drives many people and that’s quite normal, acceptable, part of life.

    Greed is quite another matter. It’s not an economic activity; greed is an emotion, a negative one.

    You note the safety record has improved. And so it has and that’s great. But when we realized that Exxon Valdez wouldn’t have happened if Exxon had spent a bit more on operations – a drunk captain and a single hulled ship – we should have insisted on more regulation. But BP successfully and easily lobbied against being forced to spend an additional half million on safety measures.

    And look at their sister company, Shell Oil, whose practices in the Third World are so cavalier and destructive that life expectancy is actually being affected in some areas.

    This is, as Hebert said, carnage.

  2. pino said:

    But that all changed

    Of course it did. It’s the nature of government. “Democrat” government or “Republican” government. Doesn’t matter. It usually serves itself.

    Greed is quite another matter. It’s not an economic activity; greed is an emotion, a negative one.

    Greed can be bad, sure. And when it manifests itself, it results in fraud. Everyone is against fraud.

    But when we realized that Exxon Valdez wouldn’t have happened if Exxon had spent a bit more on operations – a drunk captain and a single hulled ship – we should have insisted on more regulation.

    You understand that nothing is fool proof. No matter how carefully we plan, a breakdown will eventually take place.

    forced to spend an additional half million on safety measures.

    We are not sure that those safety measures would work.

    whose practices in the Third World are so cavalier and destructive that life expectancy is actually being affected in some areas.

    In those cases, the company is engaging in criminal activity.

  3. Moe said:

    [We are not sure that those safety measures would work]

    Pino – that’s no excuse not to do it. I agree that nothing is fool proof (and we have a dreadful habit of closing the barn door after the horses got out) but we are obliged to give it our best effort.

    Sitting here on the West Coast of FL, by the way, I’m looking for some tar and feathers. I’m thinking that BP guy in the blue button down who’s been on every day (actually I feel sorry for him; I think the guy is close to collapse – so I think the Board of Directors make a better target.)

  4. pino said:

    Pino – that’s no excuse not to do it.

    I would like to see a more robust contract between the “clients” and the “contractor”. That is, between us citizens and the oil company.

    If we were able to be compensated for damage done to coastline or fishing industry, the oil companies would regulate themselves.

    If it makes more financial sense to install safety instruments, they’ll do it all on their own.

    • Moe said:

      That’s exactly the argument Alan Greenspan made about Wall Street. He believed self interest would lead to self regulation. And when it collapsed, he sat in front of a congressional committee and said he was wrong.

      And this self regulation thing – you acknowledged that what Shell does in the Third World is a crime – but who is punishing htem? No one. Fining them? No one. They get away with it because they can.

      They need to be regulated. And we need to engage in treaties that would give regulation some teeth around the world.

      • pino said:

        And when it collapsed, he sat in front of a congressional committee and said he was wrong.

        I disagree that he was wrong; Ii think he’s wrong sayin’ he was wrong.

        And this self regulation thing – you acknowledged that what Shell does in the Third World is a crime – but who is punishing htem? No one. Fining them? No one. They get away with it because they can.

        Yes. One of the proper roles of government is that property rights and liberty is maintained for all people. And when a business poisons land in order to sell a product to people who don’t live on that land, the concept of Liberty has been lost.

        It;s why some of us are okay with requiring companies to limit air pollution.

  5. Moe said:

    Well, don’t tell Greenspan or the SEnate or the Congress or the IMF or any of those guys that you don’t agree – it may piss them off!

    [It;s why some of us are okay with requiring companies to limit air pollution.]

    Good. What about water pollution? Toxic cleanup at supersites? The country is dotted with FORMER factory sites that are superfund sites; the owners pulled up stakes and moved out of state, out of country and left us with the bill. Is that liberty? And if it’s not okay how do we handle the payment? The other damages?

    • pino said:

      Well, don’t tell Greenspan or the SEnate or the Congress or the IMF or any of those guys that you don’t agree – it may piss them off!

      It’s okay. Just ask my wife 😉

      What about water pollution?

      Same concept.

      You can not pollute the environment around people who are not participating in the activity. That is, if I wanna dump oil in my house for whatever reason, that should be okay. As long as that oil doesn’t leak into someone else’s “life”.

      • Moe said:

        WE agree on that one. The old ‘stakeholder’ .

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