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This Is What Democracy Looks Like
www.NationalView.org's Note From a Madman
August 5, 2008
Fuel is Funny
Fuel is funny. And now allow me to explain:
Most companies figure out what they're going to charge for their product by
calculating the cost of the item and multiplying by a satisfactory number - a
percentage they wish to make in relation to their cost.
My best friend Scott (not his real name), an accountant, used to be the CFO
(controller, head finance guy, whatever) of a big 99 cent store in New York
City. Let's call it Harry's 99 cent store. Harry's would charge a maximum of 99
cents for each and every item in his store regardless of cost. If an item cost
him 50 cents, he would almost double his markup and charge 99 cents; if an item
cost 75 cents - the most he would pay for anything - Harry would charge that
same 99 cents. Whatever Harry lost in profits (as a percentage), Harry made up
for in quantity.
When I owned and ran my own business in New York City's garment district, my
markup over the raw cost of an item was what we called "Keystone" - the term
referred to as doubling one's cost. In that raw profit, I paid rent, salaries,
health care and other assorted do-dads to whomever was helping keep me in
business, including Big Oil at the pump, Big Insurance and various government
agencies.
Big Oil is so much more fortunate.
Figured in their profits are actually profits on their profits. Here's where
that explanation comes in I promised you:
Let's assume that Big Oil Company "A", who owns the method of extracting the oil
from the ground all the way up to putting it in your SUV's gas tank at the
corner of "Too Much" and "Going Broke", was paying $50 a barrel for their liquid
gold not too long ago. After drilling, shipping, refining and converting the
crude into gasoline, let's say that their final cost per gallon was one dollar.
So if they wanted to keystone that price, they would charge two dollars per
gallon.
Of course, in my company's keystone was included all of the resources necessary
to make the item and keep the company in business. We'll give Big Oil the
benefit of the doubt here and say that the $1.00 per gallon cost already
includes that stuff.
So at $2.00 per gallon, a few years ago, Big Oil was "earning" (we'll call it
"earning" for this piece) $1.00 per gallon.
So what happens when crude oil jumps up to $150 per gallon? Well, Big Oil gets
to charge $4.00 or more at the pump pumping their profits to $2.00 per gallon.
Even though their profit margin remains the same (at least on paper), their
actual dollar profit doubles.
Nice job if you can get it.
But if that weren't enough for Big Oil to make Big Profits, they have this new
way of "earning" money. By purchasing their own stock back, Big Oil artificially
raises the price of their stock making their own worth on stocks they already
own that much more valuable. And they are doing this neat little trick with -
get this - the extra money they are "earning" from the rise in gas prices.
And even better job, huh?
Big Oil has many other tricks to get your hard-earned middle-class tax dollars
as well. how many of you hold in your wallet a gas company credit card? If you
do, you might know the penalties involved if you're late with, or miss a payment
or simply don't have enough money to pay your whole bill. Penalties can be
upwards of thirty dollars per month for late payments and interest charges can
be in the as high as forty percent.
So the next time one of you Right-Wing buddies comes to you and tells you that
Big Oil is just doing Big Business and that their profits are small as compared
to other companies, tell the truth.
And then get new friends.
-Noah Greenberg
Drilling for Petrol Lobbies
Or how fear and perceived shortages produce the right
environment for unnecessary drilling, the old bait and switch utilized for the
petrol lobbies.
We all realize the price of gas is hovering around four dollars a gallon on
national average, and has doubled in the last eight years. Here in Eureka
{Northern California} it is $4.65 for regular and at one point reached $4.87 a
gallon, a squeeze of the American pocket book is on.
I hear the cries of the public trying to budget their lives with twice the level
of energy cost falling hard on their collective pocketbooks. It puts a strain on
our entire lives including food prices, from the cost of fuel for hauling and
the use of corn for ethanol have worked together to push our food prices
skyward.
Then of course there is the weak American dollar which is intrinsically tied to
the OPEC price per barrel. With the flimsy dollar created by debt and
misadventures by our current leaders, the price reflects the weaker dollars and
is adjusted upward by those that trade petroleum to make up for that weak
currency comparison.
Further there is the burgeoning third world countries China, India and others
stretching their industrial consumer base and needing more energy to do it. And
as we all know prices are based on supply and demand, the demand is up, the
supply remains the same; so we pay. Oil speculators hedge the market and spur
prices to spike upwards, rumors of shortages that are not there float to keep
the market at ill ease.
Petro dependence is a worldwide addiction and the factors are varied as the
countries for the rise in price per barrel of crude which eventually affects our
gas pump price.
This energy crunch leads to other problems like higher unemployment, inflation
and slower moving economic strategies.
Increasing fuel cost for airlines are driving the price of a ticket up and
forcing airlines to stretch the fuel and that makes for a dangerous safety
factor. Pilots complain they are given the minimum of fuel required for a
flight, leaving no room for error or the possibility of circling an airport to
receive clearance.
Is this an accident waiting to happen?
This is a growing problem and seems to reach every facet of our lives, what are
the short term solutions and long term plans? There are short range solutions,
yet the oil men in the oval office refuse to take these simple moves, such as
opening the US reserves forcing the price down, as Clinton did when gas went to
$2.00 a gallon in the nineties. Or dropping taxes from the price, another
overlooked relief pro gram.
We gaze towards DC for some kind of answer, or positive plans for the future yet
our qualms and collective trepidation are played upon instead of positive
solutions.
What do some members of Republican Congress and John McCain propose?
They put out policies that will assist their oil lobbies friends or donors and
do nothing to lower gas prices for the next decade.
These lobby biased power drivers want to drill in places set aside for its
natural appeal and wildlife, while millions of acres of designated oil sites are
already waiting to be explored and they ignore them.
Millions of gallons of crude await, in leased and approved spots that are not
being explored and yet they want more areas and use the gas crunch to justify
drilling in heaven while there is no shortage of approved sights yet tapped.
This off shore drilling is not a solution this is a pork belly loving lobbyE2s
answer to the crisis that will not help the American people, but will expand the
petro business in to the realms of kingdoms.
Exxon Mobil announced recently that the petro giant recorded a record
profit--$11.7 billion in just three months. If Exxon Mobil were a state or
nation, it would control the 18th prevalent economy in the world, as reported by
the Washington Post.
Of course you may say but they pay taxes and that comes back to the USA.
Off shore tax shelters encouraged by the Bush bunch and tax breaks amounting to
corporate welfare leave the profits primarily in the hands of the petro giants.
In fact, according to a fresh report by "Friends of the Earth,” the petrol
industry can expect $33 billion in tax breaks and other handouts over the next
few years. The Saudis have more money than most continents and the Bush friends
in Saudi Arabia love their hero in DC. Many claim off shore drilling and petro
hauling have become far more environmentally friendly, and it has improved
greatly but not fail safe. Meanwhile a huge oil spill occurs in the Mississippi
delta recently killing wildlife and polluting the area including crawfish and
other edible foods
We are watching another oil derrick platform of fear tactics used on the
American people that are based on our ignorance and native attitude.
The Republican oil pushers are hoping we do not ask the pertinent questions like
why not drill in land already designated? Or why the research money for
alternatives has shifted to subsidizing oil companies through tax breaks?
Oil magnet T. Boone Pickens recently testified before congress that we need to
look for alternative sources of energy, wind, solar and hydro, are all
promising, but ignored by the drill for Lobbies people.
Conservation and its benefits have long been ignored to the beat of the grand
consumption game of petroleum driven greed.
The Bush administration went so far as to give tax breaks for consumers that
bought the highest level gas guzzlers and the SUV craze was underway. More low
efficiency autos were sold in recent years then anytime since the early years of
the sixties when the average gas consumption hovered around seven miles to the
gallon. SUV’s and large trucks once utilized to make a living and do hard work
were now used to take the kids to soccer practice and buy groceries.
Meanwhile the Peak Oil crisis fears loomed in the background and we were warned
but laughed at the chances. Prestige became owning a huge four wheel drive gas
hog to impress the neighbors, and every macho teenager wanted a pickup truck
with a giant V-eight.
We traded our awareness of the energy crisis for a Texas style American dream
that brought further dependence on the Texas oil men and the Saudi’s OPEC.
As an International traveler one has come to realize we pay far less per unit of
gasoline here in the USA than most industrialized nations. Our own oil supplies
and vast consumption gave us a slight advantage that is now slipping away. Third
World countries are fast becoming petrol consumers at a rate that increased
demand and fosters the up spike in prices. Further the constant tension of war
in the oil rich Mideast have increased the price at the pump as Texas oil men
and Saudis oil companies smile and back the Iraq war as a petro cash cow.
Venezuela is now one of the greatest producers of oil and we have ostracized
this source due to political differences.
One fact that stands out is the fact that most of our oil does not come from the
Mideast but from our good neighbor Canada. In fact Canada has the world's second
largest oil reserves some claim it is t he largest.
The average cost of gas June 14th 08 was $4.00 per gallon in the USA and $1.38
per liter in Canada. One gallon equals 3.7843 liters so taking the US and
Canadian dollars at par gas is $5.22 a gallon in Canada. According to the LA
Times as of June 2nd gas was “nearly $10” in France and more than $11 per gallon
in Turkey. Gasoline in Germany is at $8.33 a gallon, and a gallon of ethanol
costs $5.67 in Sao Paulo Brazil. The Vancouver Sun newspaper reported on May
31st that gasoline (per liter) in Belgium is $2.14 or $8.10 a gallon; Norway
$2.28 or $8.63 a gallon (and Norway is an oil exporter); and in Portugal $2.05
or $7.76 a gallon.
Simply stated US and Canadian gas is cheaper compared to most international
locations, when driving in the US we are buying at a discount.
Feel better yet?
Venezuela’s public pays about fifty cents a gallon, so it is relative and we
subsidize Iraqi fuel so they get it cheap. But most the world gets it in the
derrière daily like we do.
As tensions in the oil rich Middle East amplify we pay more, and as demand
increases we pay more, every storm that nears an oil derrick we pay more, fear
drives this industry.
This supposed shortage and rising prices have had another repercussion that the
Bush oil men love, it has opened up the debate for coastal drilling and off
shores oil wells. The ANWAR and Alaskan fields are being discussed but they may
not be available to impact our supply for a decade. Wind and solar power are
being bantered about and hydrogen cars seem to be on the verge of utilization.
So perhaps20this is the oil business on its last legs trying to gain as much
profit as possible before being phased out as an energy20source.
We are caught in the middle of greed and desperation, as the petroleum industry
has bought off many patents on energy saving technology but development of these
patents is going so fast on things like hydrogen and electric they work in fear
of their positions. Electric cars hybrids more fuel efficient automobiles need
to be pressed into production, instead we get more drilling in new ground.
Barrack Obama is offering rebates for fuel efficient cars which is great. Obama
is bending to the pressure for off shore drilling, but we hope he sees the truth
before it happens.
Most of all we need to drill where we already set aside millions of acres and
sea miles for just that purpose and stop trying to use fear and economic
pressure to feed the petroleum greed machine.
Inform your20fellow citizens that this is another Republican scam, and America
is falling for the same old manipulations.
-Robert W. Barker
Send your comments to: NationalView@aol.com
-Noah Greenberg