Friday, May 11, 2007

Oil: a story in numbers and pictures

Price I paid at the pump for Regular Unleaded: $ 3.62 / gallon.

Oil company profits (sources: Reuters and firm financial reports):


$, billion
Company 2006 2005 2004 2003 2002
Exxon 39.5 36.13 25.33 20.96 11.01
Chevron 17.138 14.099 13.328 7.23 1.132
Conoco Phillips 15.55 13.529 8.129 4.735 0.698
BP 22.29 22.63 17.26 12.62 6.87
Royal Dutch Shell 26.31 26.26 18.18 12.31 9.66
Region/Country 2004 Consumption
(million barrels per day)
United States 20.7
Europe 16.2
China 6.4
Middle East 5.6
Central & South America 5.3
Japan 5.3
Eurasia 4.0
Africa 2.8
Russia 2.8
Germany 2.7
India 2.4
Canada 2.3
Korea, South 2.2
Brazil 2.1
France 2.0
Mexico 2.0

Military bases of the largest consumer, in the region which has most of the stuff:

4 Comments:

Blogger Manoj said...

Pods - I understood the part where the US is trying to protect its interests with a number of bases in and around the Middle East. But I do not grudge the oil companies their profits. I do not believe that, over the long term, companies or countries can control world oil prices. Their profits are simply rising in concert with the price of the commodity.
Also, at current prices, the dark sands of our northern neighbor are economically viable. So the chart showing 5bln for Canada is off by a bit :-)

5/17/2007 11:30 AM  
Blogger VP said...

Manoj,

First, the US is protecting the interests of the oil companies. If the US government was genuinely serious about protecting the interests of US taxpayers/citizens, it would have devoted far more resources to alternative energy sources and to reorienting the economy away from fossil fuels years ago. None of the possible solutions will yield immediate or painless results, but weaning the economy away from oil is the only way to solve the problem permanently.

Secondly, the US government has an inordinate fondness for a Tony Soprano approach to international affairs. So I am generally uncomfortable giving it a pass by saying that it is only trying to protect is interests.

The sharp increase in crude prices does not coincide with any corresponding demand or supply shock of similar magnitude, though it does occur soon after the Iraq invasion. Most likely, OPEC members engineered the price rises and the oil companies are merely raking in the resulting loot. Nevertheless, I can't seem to feel warm and fuzzy about the oil companies.

I took out Canada's non-conventional reserves from the table deliberately since they are, technically speaking, not crude oil reserves. But your point is taken - if prices persist at current and higher levels, the tar sands do become available for exploitation.

5/17/2007 8:34 PM  
Blogger Manoj said...

VP - I agree that the US government should have done a lot more. Alternatively energy sources, higher mileage limits, a gasoline tax, public transportation... you name it. But there are too many issues, threads in this discussion. Are you saying that the oil lobby alongwith Big Pharma, the NRA and other powerful lobbies have essentially perverted lawmakers and destroyed the "world's greatest democracy"? Maybe so. It is also true that the US has a record of using a "Tony Soprano" approach outside its borders. But can you pick a country with a better (long term) record towards its citizens? Also, the American people voted this government into office. Twice!! On a different note, four of the top five oil majors by market cap are not US based. (Total, Shell, Petrochina and BP)

5/18/2007 10:29 AM  
Blogger VP said...

Manoj,
The most remarkable thing about the US has been that its international face is so radically different from its domestic one. Even Tony Soprano is relatively nice to his own family.

I do think that US citizens live well and in considerable freedom, both from tyranny and want, to a large extent. Nevertheless, I could probably pick out a few Scandinavian and Western European countries who have done quite well by their citizens for a fairly long time. Also, don't forget that it helps to have the right skin color in the US. If you thought this was a thing of the past, think of Katrina.

I don't like to think in terms of conspiracy theories, so let's just say there is a strong confluence of interests between the US government and oil companies. Read this article for some details. The Bush administration's energy policies are developed in close consultation with oil executives. Remember the legal battle Cheney fought to conceal the details of those meetings he had when formulating the policy ? As for the legislative branch, they jump over each other to give the companies tax breaks whenever they can.

Finally, regarding some of the large cap oil companies, here's a short quiz:

1. Which "special relationship" US ally was the second largest member of the "coalition of the willing" ?

2. What does the B in BP stand for ? What does the Royal in Royal Dutch Shell refer to ?

5/18/2007 2:24 PM  

Post a Comment

<< Home