You’re getting hosed at the gas pump and in Washington

Posted on May 12, 2011

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Attention all fans of “Trickle-Down Economics” and rampant deregulation of the oil and gas industry: You got what you asked for. Republican deregulation and blind Congressional fealty to corporate executives has given us a federal government that is wholly owned and driven by corporate America.

And what’s the most visible and obvious result, other than the daily exposure of corruption in Washington? Despite widespread stability in every oil-producing nation in the world, and despite the bedding down of every president since Johnson by Saudi/Arab oil sheiks, the prices of gasoline and oil are skyrocketing — and so are oil company profits.

Exxon Mobil Corp. earned nearly $11 billion in the first three months of this year, a ludicrous 69% increase over its performance for the same period last year. That’s on sales of $114 billion. Royal Dutch Shell is singing the same praises as they turned a profit of $6.3 billion in the first quarter, and BP — despite lingering costs from the Gulf Coast oil spill — made $7.1 billion in net profit.

What they aren’t making is fuel, at least not in normal quantities. And that’s a key factor in their reinvigorated financial performance. Despite increasing demand, refiners are producing less gasoline and diesel in the U.S. than usual for this time of year. They’re also exporting more to foreign countries.

Add rising oil prices, and you get the kind of sticker shock at the gas pump that some analysts say could challenge 2008’s all-time high of $4.66 per gallon — with regular gas already averaging about $3.88 a gallon in the U.S. and $4.22 in California, more than a month before the summer driving/vacation season kicks in.

And we – you and I – are giving them more than $4 Billion in federal subsidies to do it; not to mention grossly padded and fraud-ridden federal fuel contracts.   If oil companies across the board are raking in ENORMOUS record-breaking profits quarter after quarter, why do they need repeated billions in taxpayer subsidies? When you have a job, you can’t collect unemployment. But, as always, the rules and laws don’t apply to the corporate elite and the politicians they bought to create the loopholes.

The five companies booked profits totaling $36 billion the first quarter of this year. With profits that high, what is the argument that the oil companies need tax breaks that average $2 billion a year, or subsidies that total $4 billion a year. $36 Billion times four fiscal quarters equals $144 Billion. Subtract the $6 Billion in federal giveaways, and that leaves $138 Billion in clear net profit, and somehow that’s STILL NOT ENOUGH?

But the corpocracy doesn’t live in an oil industry vacuum. Just yesterday, FCC Commissioner Meredith Attwell Baker – who four months ago approved the Comcast/NBC/Universal Studios merger – announced she is leaving her federal post next month to take a job as a Senior Vice President … at Comcast.

We’re supposed to believe that this “job offer” wasn’t presented to Baker BEFORE she approved the Comcast deal? Cue the anal-extracted airborne porcine.

The chief executives of all the major domestic oil companies are, once again, sitting before Congress and lying their collective asses off about why gas prices are so high.

Jack Gerard, president and CEO of the American Petroleum Institute, called the tax proposal a “vindictive money grab” that could “put more people out of work in New Jersey and across America, damage our nation’s energy security, raise energy costs and, ultimately, drive up deficits.”

This is fact-barren fear-mongering of the worst kind.

The nonpartisan Congressional Research Service concluded that eliminating the tax breaks would be unlikely to result in higher gasoline prices, which are influenced by a host of factors. The report, released Wednesday, said eliminating the tax breaks would raise about $1.2 billion in 2012 and “should have no defensible bearing or impact on gasoline prices whatsoever.”

The federal oil industry subsidies were created almost four decades ago, when the price of oil was $17 a barrel. At the time, it was felt that the oil industry as a whole needed some incentive for exploration. With the price of oil now at $113 a barrel, that need for incentive simply does not exist anymore. The only thing that keeps the subsidies in place is pure politics and pure unadulterated greed.

The latest Congressional dog and pony show would repeal the tax breaks for the five largest oil companies – Shell Oil Co., Exxon Mobil, ConocoPhillips, BP America and Chevron Corp. On Wednesday, ConocoPhillips chairman and CEO Jim Mulva issued a statement saying a tax increase would cost jobs, discourage investment and lead to even higher gas prices.

“Our industry and company are already taxed heavily compared to other industries in the United States,” Mulva said.

After it’s share of tax breaks, subsidies, deferments, shelters, exemptions, loopholes and “creative accounting,” ConocoPhillips had a final tax rate of 2.45 percent in 2010.  After my allowed deductions and one single exemption, my tax rate was 13.03 percent.  What was yours?

The cycle continues. The corruption continues. The free exchange between lobbyist, the government and its corporate whoremasters continue to play musical chairs, always leaving the taxpayer standing at the end of every round.

Yet more inarguable proof that America has the best government the billionaires can buy.

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