Oil and politics – are you mad yet?

By Dr. James “Jim” Kadlecek

“I’m as mad as hell, and I’m not going to take this anymore!” – from the film Network, 1976

As I was filling up my Camry at the gas station the other day, and bitching and moaning about the $48 cost, I noticed the guy next to me with his big pickup, still pumping at over $100.

“Doesn’t this piss you off?” I asked.

“Just the way it is,” he shrugged, “I gotta drive. The oil companies have us by the b***s.”

Well said.

Recently, Exxon announced that it had made a $40.6-billion profit in the past year. Right, that’s $40 billion! Their gross sales were more than $400 billion! Shell Oil posted an annual $31.3-billion profit. Chevron and Conoco-Phillips also reported large profits for the year.

Exxon’s sales exceeded the gross domestic product of 120 countries, according to the New York Times. Exxon’s sales were nearly as much as the $439 billion that the United States spent in 2007 for the Defense Department. The entire general fund budget for the state of New Mexico is only $6 billion. Suffice to say, huge sales, huge profits.

But, you know what? Despite the fact that the oil industry has raped and pillaged the American driving public in recent years, I don’t hear people making much noise about the exorbitant price of gas. Why are Americans so blasé about it? Most presidential and congressional candidates are hardly mentioning it. Why aren’t we “marching in the street” mad?

Is it because we love our cars so much that we will pay anything to drive? Or is it that, as the pickup man said, we are so dependent on our vehicles that we have no choice but to pay, pay, pay whatever these oil company guys charge?

Impose an excess-profits tax

I believe in free enterprise, but I also believe in competition and fairness. We should impose an excess-profits tax on the oil companies and use the proceeds to reduce the annual federal deficit, which is projected by the Bush administration to be over $400 billion this year. Or, we could use it to pay for part of the so-called stimulus package just approved by Congress, which is costing over $150 billion. This, along with some price controls, needs to be enacted.

There is precedent for such a tax, especially during time of war. We imposed an excess-profits tax in 1917, and again in 1940, 1943 and 1950, all based on wartime circumstances. It was attempted in 1991 as part of an energy package, but opposed and defeated by industry lobbyists.

Of course, our current president, hailing from Texas oil country and having strong ties to big oil, is opposed to such a plan. But in less than a year, we will have a new president and a Congress that may be more inclined to consider an excess-profits tax, along with price controls.

My view is that whenever an industry generates excess profits in an essential product or service area, the government should step in and smooth out the “rough edges of capitalism.” Certainly, the costs of gasoline and oil products have risen to the point that they are causing economic hardship on many Americans and damage to small businesses. These costs are also a contributing cause of the recession that some economists say we are entering.

Reasonable profits are one thing; excess profits are pure greed and throw the economy out of balance.

The connection between oil and political campaigns is apparent. Estimates are that oil company lobbyists spent over $73 million lobbying Congress last year. Industry contributions to presidential candidates are substantial. Romney and Giuliani received the most, but even Clinton, McCain and Obama have received significant amounts.

Candidate’s flaw is his tie to the oil industry

This brings me to a final comment concerning the Second Congressional District race, where Mr. Harry Teague is running as a Democrat. Teague is a wealthy oilman from the eastern side of the state who owns Teaco Energy Services and Teaco Drilling. He has been a major contributor to many political campaigns, giving the maximum to candidates in both parties.

I attended a debate/discussion among the Democratic candidates for this seat. Mr. Teague is a likeable person, and his positions on most issues (Iraq, health care, etc.), are agreeable to me. However, his candidacy has a very major flaw – his strong connection with the oil industry.

For the reasons described above, this is not the time for a person with his self-interest to be seeking political office. Even though he claims to be interested in promoting alternative forms of energy, it’s hard to believe that he would not support legislation that favors the oil industry. In response to a question, he defended the oil-company profits as being reasonable – “only 10 percent,” he said about Exxon’s profits.

Mr. Teague will spend a lot of his wealth to try to buy the election, and he admitted that he has already contributed $200,000 to his own campaign.

While he may be a good man, we need someone in Congress who we can be certain will be objective about energy policy and do what is necessary to reduce the unfair burden of high gas prices on the American public. Nice-guy Harry is not that guy.

Kadlecek has lived in Doña Ana County since 1996, served in the Colorado Legislature and holds a doctorate in public administration. He’s the author of the book “Capitol Rape.” His column runs on the second and fourth Tuesdays of each month and other times that he gets fired up about something.