Big Oil

After reading this Op-Ed in the New York Times, it amazes me just how little people know about Big Oil.

For one, it is very debatable whether the break up of Standard Oil by Teddy Roosevelt was actually good for consumers. At the time, the price of kerosene was actually dropping even though Rockefeller was consolidating the industry. His consolidation was driving efficiency and thus lowering the cost of petroleum products for everyone.

As for contributions to society, ExxonMobil alone pays more in corporate income tax than the bottom 65% of taxpayers combined. The $15B in incentives the oil companies enjoy are a pittance compared to the payments to the renewable energy crowd (i.e. ADM, Farmers, the solar and wind energy proponents). As for the 700% increase in payouts to shareholders, this is great news. These shareholders are primarily mutual funds and pension funds that hold the retirement savings of most Americans.

There will always be stories about people not being able to heat their homes. It is very unfortunate that it happens. However, price is the most efficient way to ration scare resources like heating oil and natural gas. Price is a much better mechanism than some politician telling you what you can set your thermostat to in the Winter. Oops, too late as the politicians are already trying to do this very thing in California.