You know, this whole Congress hearing business doesn’t make any sense to me at all. Here are a few things that were said:
1. Rep. Markey says: “On April Fool’s Day, the biggest joke of all is being played on American families by Big Oil”
2. Rep. Cleaver says: “The anger level [with oil company profits] is rising significantly”
3. Rep. Markey (again): “Why is Exxon resisting the renewable revolution”
There were other things said during the hearing but these really caught my attention.
First of all:
Congress holds hearings as the price of oil goes up. They did that in November 2005 when oil was at $60/barrel, then six months later when oil was around $75 and now today when oil is around $100.
The problem with all of this: oil companies, Big Oil, the largest 5 US oil companies do not control the price of oil and thus cannot lower the price. By the way, neither does Saudi Arabia nor any other oil producer for that matter. Oil, as we all know, is not priced merely on supply and demand. Geopolitics and market perceptions play a huge role and no one (big or small) can control that.
They keep repeating that for example, Exxon made over $40 billion in profit last year. Yes that’s a huge number but in fact Exxon’s profit margin is around 9% which is a lot less than other industries (Pharmaceuticals for example). Looking at numbers in absolute is plain silly in my mind
Exxon is being asked to increase their spending on renewables. I wonder whose budget is larger Exxon’s or the government? Exxon is a publicly traded oil company and thus they have to do what is in the best interest of their shareholders. Maybe in the long-term they need to increase their spending on renewables but that’s a choice they need to make. The government, rather than telling Exxon what to do with its profit maybe should spearhead the effort to find economically attractive renewable energy resources. I am sure if such alternatives exist, are scaleable and make money Exxon would be the first to jump on the bandwagon.
I don’t like the notion that oil companies need to find the alternative. Why not the local utility why not the car manufacturers? I don’t see anyone telling GM that they need to invest more in clean technology.
Yes climate change is an issue but a shame and blame game is not the way to solve it. Then again what do I know, I’m just a taxpayer…