A big thank you to Protein Wisdom for linking to this post.
By Rob Janicki
I am somewhat dismayed, if not saddened, by the obvious fact that Bill O'Reilly must have recently suffered a debilitating stroke or brain seizure (I'm hoping it's only a temporary brain fart) impairing his ability to reason and recall basic facts of economics, as evidenced by his ridiculous flight of fancy assertions that some cabal or conspiracy among the major oil companies is causing the skyrocketing cost of gasoline at the pump.
For a man with an Ivy League type education, having earned a BA from Marist College, an MA from Boston University and an MPA from Harvard University, his ignorance of economics in general and the global oil market in particular, is absolutely astounding. The man simply does not have a clue about what he was talking about in his Wednesday night interview seen here.
From the American Petroleum Institute's Chief Economist, John Felmy, on Wednesday, February 22, 2012.
[...] “By far, the single biggest factor in today’s higher gasoline prices is the rising cost of crude oil. It has driven virtually all the rise in gasoline prices. Together, what refiners have to pay on the world market for crude plus gasoline taxes accounts for over $3.00 – or about 84 percent – of what people are paying at the pump today. [...]
[...] API represents more than 490 oil and natural gas companies, leaders of a technology-driven industry that supplies most of America’s energy, supports 9.2 million U.S. jobs and 7.7 percent of the U.S. economy, delivers more than $86 million a day in revenue to our government, and, since 2000, has invested more than $2 trillion in U.S. capital projects to advance all forms of energy, including alternatives. [...]
Based upon a $3.00 gallon of gasoline, the average break-down is as follows.
Gasoline Retailer $.01 cents per gallon
Oil Company $.08 cents per gallon
Refining $.29 cents per gallon
Marketing/Distribution $.32 cents per gallon
Taxes $.59 cents per gallon
Cost of crude $1.71 per gallon (delivered)
With these statistics, is it any wonder that the petroleum producers have NEVER been found in any audits to be conspiring to make windfall profits from the sale of gasoline?
O'Reilly asked why Exxon Mobil made record setting profits last year. The answer is as simple as O'Reilly's understanding of the petroleum industry. They sell products other than automotive gasoline that are far more profitable, such as lubricants, plastic polymers, jet fuel, and a host of chemicals such as agricultural fertilizers, pesticides, and herbicides that have huge market demand, thus driving up those profits. In addition, the large American oil companies make as much or more profits from their overseas operations than they do from their American operations.
Please note that O'Reilly kept saying that American oil belonged to Americans, implying that they had some rights to that oil and were being ripped off by the oil companies. Considering oil companies pay for oil leases from the federal government, state governments and private landholders, claiming that American oil belongs to all Americans is just one step away from national socialism. I didn't realize that we live a socialist state quite yet, where the government nationalizes industries for the benefit of all the citizens. Of course we know Maxine Waters would like that scenario, as we have heard say so in congressional committee hearings in the past.