Nov 082007

Yesterday Z’s science teacher pointed out to the class that gas prices would likely soon hit $4.00 per gallon. The class quickly erupted with kids complaining about the evil gas station owners and how they’re just out to rip everyone off. Z did me proud by refraining from blaming the station owners. She’s well aware that they’re lucky to make a penny or two on the gallon. It is, in fact, the oil companies and refinery companies that are making all the profits. of course, as someone who believes in a free market I know that even this pure search for profit isn’t evil, it’s just business. It’s the government regulation that prevents newcomers from drilling for oil, much less refining it into gasoline that is the truly evil part.

But those who still believe the myth that corporations are evil have some explaining to do thanks to British Petroleum, or rather, BP, as they’re now known. Last month they sponsored the BP Solar Decathlon (their third time doing so since 2002). For those unfamiliar with this annual competition, the idea is to design, build and operate a livable, energy-efficient, and completely solar-powered house. Seems like an odd type of corporate sponsorship for a company dedicated completely to squeezing every last penny out of the dead dinosaurs we call oil, doesn’t it?
Of course, if you call the EON Energy contact number and have a chat with a representitive, you can then add in the $500 million they invested in the Energy Biosciences Institute which is dedicated to finding bioscience solutions to reduce the impact of energy consumption on the environment; and that they are co-owners of the Nerefco wind farm that generates power for 13,000 homes; and that they generated more than 200MW of solar energy last year. How evil do they look to you now?

  8 Responses to “Those (Not So) Evil Oil Companies Are At It Again”

  1. Another sponsored post, eh?

    In this case, you could have written a better article without betraying your advertiser or the theme of your blog.

    The rising gasoline prices are entirely due to a decline in the value of the dollar. If you look at an objective measure of inflation, such as “price of oil” divided by “price of gold” or “price of oil” divided by “M2 money supply”, then you would see that the price of oil is *NOT* at record high levels.

    Don’t “adjust for inflation” using the CPI, which is a forged bogus statistic.

    I don’t see how you can claim to be an anarchist and say “corporations are not evil”. Most large corporations and the state are controlled by the same handful of people. They’re the same. Large corporations receive massive state subsidies. On the other hand, most corporate management is doing the best they can, given the constraint of a corrupt economic system.

  2. I’d love to see your numbers on the whole “gas prices haven’t increased dramatically argument”, because the ones I found don’t match your statements. And please stop putting words in my mouth – I never claimed anything about “record highs”.

    Gold prices from, Oil Prices from Forbes (using “Nominal” not “Real”).

    1975 – Gold: 161.04/oz, Oil: 11.58/barrel – One ounce of gold bought 13.9 barrels of oil
    2005 – Gold: 444.74/oz, Oil: 54.81/barrel – One ounce of gold bought 8.11 barrels of oil

    It’s certainly possible my math is wrong, but when accusing someone of having their facts wrong you’d be better served to actually offer some of your own, rather than unsubstantiated statements. Propaganda is propaganda regardless of who’s dishing it out.

    You’re beginning to sound like a communist/socialist, FSK. And a self-loathing one at that. You claim that corporations are evil because they accept subsidies from the state. That would mean you must consider yourself evil as well, since you receive subsidies from the corporations (not to mention the subsidies you’ve likely received from the state as well).

    Government is wrong because it uses force to steal the fruits of my labor without my consent. Corporations do no such thing. It’s not the people in charge that make government wrong, it’s that it feels it has the right to control my life.

    Government interaction is forced upon me every day. Corporate interaction is always a choice that I make, each and every day. Anarchy is about freedom and natural law. Under natural law I have the freedom to choose where the fruits of my labor go. Corporations allow me this freedom as well. Government does not.

  3. FSK: Another sponsored post, eh?
    In this case, you could have written a better article without betraying your advertiser or the theme of your blog.

    Yep, as I said, they pay the bills and without having to live a lie. Once again I served my employer well. The goal is not to “hide” the posts or “trick” you into reading them, it’s just to get them to read them.

    Could the post have been better written? Probably. I admit I was rushed and tired when I wrote it. But I was still able to speak my honest opinion, share something with my readers, and further educate “the masses” all while earning grocery money.

  4. There was a spike in the price of gold in 1975. If you do a comparison of 2007-2002 or 2007-1997, you’ll find that the price of oil is pretty stable.

  5. Same places for the number, but here’s a better link to Kitco

    Gold 1997 – 331.02
    Oil 1997 – 19.30
    17.15 barrels/ounce

    Gold 2002 – 309.37
    Oil 2002 – 28.74
    10.76 barrels/ounce

    Gold 2007 – 811.02
    Oil 2007 – 96.03 (AP (one hour ago)
    8.44 barrels/ounce

    Looks like the price of oil is still going up. Based on both charts prices remained pretty stable on both gold & oil until the early 1970’s. Since then they’ve both increased dramatically.

    Please share where you’re getting numbers that disagree.

  6. Whoops, I checked and the price of “oil/gold” really is at a high. I was looking at “price of oil”/”M2 money supply”, which peaked in 1981. I assumed that quoting in gold was analogous.

    On the other hand, there has been massive central bank downward manipulation of the gold price.

    Still, the price of “oil/gold” has gone up only 10%-20% in the past few years, which is a lot less the the official story in CPI-adjusted or unadjusted dollars.

  7. See, that’s where you lose me (and, I imagine most fellow Americans). I have no idea what the “M2 Money Supply” is. And phrases like “central bank downward manipulation of the gold price” just sounds like conspiracy theory gobbledy-gook. I’m not saying that it’s NOT happening, but that’s what the phrase sounds like. Here at Philaahzophy I try to describe things in simple terms and a conversational tone that the average reader can understand.
    What I understand is that I now have to work more hours in a day to pay for the same amount of gas as last year.

    The basic point of the post remains the same: gas price increases have nothing to do with station owners and everything to do with the government restricting the flow of oil.

  8. Even if the government loosened regulations on oil drilling in certain respects, it doesn’t mean that there would be more drilling. First, that makes the assumption that there are a whole lot of start ups in some of the markets. Only recently has shale become profitable, and many new companies have entered the market. For more developed markets, it takes a lot of capital to begin. Drilling in the Gulf of Mexico, costs billions per rig. Second, even if there were more entrants to that market, would you still want that lack of regulation after seeing the BP spill?

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