The Case for Big Oil

    The new favorite American past-time is to praise the government for their so-called protective measures and condemn oil companies for their greed. But how greedy is it to want to make a small profit, or to barely break even?

    Middle eastern conflicts damage pipelines and methods of transit, making it more expensive to transport the oil from the sources America relies on. The oil companies certainly did not have any say in the Iraq war, though they have been demonized by the results of the fiasco. Add that to the fact that oil simply does not magically appear in the pumps while the Monopoly mascot sits in a high rise counting his money. Oil companies have to pay employees, pay for extremely high priced refineries, and drill. Those are but a few costs involved in producing oil for the American consumer.

    On May 15th, there was an internet wide call to stay away from the pump to take 220 billion dollars way from the oil companies’ pockets. But that figure relied on the fact that every vehicle owner in America buys gas at the pump every single day, which is an absurd assumption.

    Among the companies that make more profits than “big oil” are Google and Coca Cola, but there are no calls to boycott using search engines or getting caffeinated at the movies.

    Because the government taxes gasolines on average between fifty and sixty cents a gallon, which already means you’re paying at least that much above market value. Earlier this week, and on several occasions prior, the government has fined small station owners and grocery stores for offering free or lower priced gasoline to citizens. In a competitive market, with no federal intervention, oil companies would be allowed to undercut each other and set lower prices. In those cases, the consumers always wins.

John C. Keyser

May 17, 2007