WHY OIL COSTS MORE: CASE STUDY – BIG OIL

Why? Because Big Oil will sell whatever oil it can get in its barrels. That’s its business. If the oil costs more, Big Oil assumes consumers will pay more. They haven’t been wrong yet.

ExxonMobil has nothing to sell but energy from somewhere else so of course their CEO contends the source of the energy is irrelevant. But a lot of Americans who know the US must depend on foreign oil and gas for at least another 2 or 3 decades think it is important nevertheless to build a domestic renewable energy infrastructure now (instead of investing in ExxonMobil) so their children don’t have to depend so heavily on imports from violent, anti-modern places.

The article concludes with a dismissal of renewables, attributed to Royal Dutch Shell CEO Jeroen van der Veer, in which the potential of all renewable energies is equated with the potential of crop-based liquid fuels. This is a common “slurring” in the oil industry: The pursuit of renewable energy is pointless because corn ethanol is a scam. WRONG! There are better kinds of biofuels and there are better ways to power vehicles. (10th in the WHY OIL COSTS MORE series: KAZAKHSTAN, SAUDI ARABIA, NIGERIA, VENEZUELA, INDIA, CHINA, JAPAN, RIGS, SUPPLY AND DEMAND)

Tillerson Says ‘Nationality of Energy’ Is Irrelevant
Joe Carroll and Sonja Franklin, September 7, 2007 (Bloomberg)

WHO
Exxon Mobil Corp. CEO Rex Tillerson, Royal Dutch Shell CEO Jeroen van der Veer, Chevron Corp.’s George Kirkland and other oil industry spokespersons

The U.S. sources of oil. (click to enlarge)

WHAT
Tillerson asserted that calls for “US energy independence” were pointless and Americans should pursue all energy supplies wherever.

WHEN
- Tillerson’s remarks were made September 7.
- Standard Oil, the company that gave birth in 1911 to the companies that became ExxonMobil, was among the first multinational entities. There is a long history of going anywhere, “buying cheap and selling dear.” But many Americans are beginning to think the price is just a little TOO dear.

WHERE
- Tillerson’s remarks were made during a panel discussion on global energy security at an oil conference in Calgary, Alberta, Canada.
- Exxon and Mobil were among the first oil companies in what was then called Mesopotamia, Persia and Arabia as well as Africa, Latin America and the South Pacific.

WHY
- Exxon and Mobil have had interests in virtually every oilfield where Americans have ventured. The product they now sell comes from anywhere and everywhere in the world and it has long since been diminishing as a domestic resource. Why should they advocate for the development of domestic resources like solar and wind and wave-tide-current and hydro?
- Tillerson talked about expansion of Saudi Arabian production, saying they are ramping up to a 12.5 million barrels/day output (from the current 8.37 bpd level) with increased drilling and increased spending. (NewEnergyNews: Many experts doubt the Saudis ability to achieve significant increases and ask why, if they have more capacity, they aren’t bringing it on to take advantage of current record high prices?)
- Tillerson talked about his company’s investments in Canadian oil sands projects, deepwater Gulf of Mexico fields and arctic exploration. (NewEnergyNews: His motivation for saying Americans shouldn’t worry where their oil comes from is pretty obvious, isn’t it?)

Will nothing quell the U.S. addiction? (click to enlarge)

QUOTES
- Exxon Mobil’s Tillerson: ``The nationality of energy is irrelevant…A diversity of sources mitigates the impact on total supply from disruptions in any region or from any one source…History shows [pursuing energy independence] is often counterproductive, leads to inefficiencies, higher prices, supply shortages and at times even trade wars…''
(NewEnergyNews: Yeah, and current policies have led to what? Inefficiencies, higher prices, supply shortages and trade wars…)
- Tillerson on Democratic proposals to cut off $15 billion in exploration and overseas oil production tax breaks for oil companies: ``This will make a company like mine and (Chevron Corp. upstream chief) George Kirkland's less competitive in the international marketplace…It's upside down.'' (NewEnergynews: Yeah, those companies are hurting so bad right now.)