Cynthia A. Janak
The "crude" truth - - money trail
By Cynthia A. Janak
I was asked to simplify what is going on in the oil and gas industry. My dilemma is this, how do you simplify something that is so complex? This was not an easy problem to solve but I came up with a solution.
Money is something that everyone understands. We have to go to work to make money to pay our mortgages, utility bills and everyday living expenses. We have to budget, allocate and balance what we have to spend every day of our lives. That is why I am going to give you the dollars and cents of "THE CRUDE TRUTH."
In my last two articles about "THE CRUDE TRUTH" I gave you what is being said about the high cost of oil and the toxins. Putting it simply, they were all about the bottom line, PROFIT. What I am going to do here is show you where part of the PROFIT goes.
Let us start with the yearly compensation that the executives of the oil companies receive. I am going to put this information in a table format to make it simpler to understand. All information that I am going to give you in these tables is coming from Reuters.com. It is a great site to find out the latest information about what is in the news today.
Exxon/Mobil Corporation (XOM)
Chevron Corporation (CVX)
ConocoPhillips (COP)
British Petroleum (BP)
Royal Dutch Shell (RDSa)
Do you want to know what surprised me about this data? What surprised me the most was, that Exxon was 4th in total yearly income paid to their executives. (I did forget to mention that the charts do not include any stock options that the executives are given. With this considered the total compensation package per fiscal year would be greater in some instances.)
The grand total of the yearly income for these 25 executives is $124,301,401. WOW. This is more that any of us could earn in a dozen lifetimes. They earn this in one year.
What really gets me upset is that the oil companies have the gall to say, "In parts of Europe and elsewhere in the West, gasoline prices are more like $5 per gallon to $7 per gallon," said the chairman of ConocoPhillips Co., James J. Mulva. http://www.msnbc.msn.com/id/13404319/
Let us look at this statement made from a man that makes $31,101,620 a year.
Our government only makes around (April 2005) 38 cents on a gallon of gasoline. The State of Illinois, where I live, only collects 19 cents on a gallon of gasoline. When you add that up the total taxes for motor fuel is 57 cents in Illinois. http://tax.illinois.gov/Motorfuel/Mft/taxrates.htm
Now, let us look at what the average price of unleaded gasoline is today in the State of Illinois. (To look up the current prices for your state go to http://zfacts.com/p/48.html )
Today, July 10th, 2006, the average price of unleaded is $3.13 per gallon. If you subtract 57 cents from $3.13 you get $2.56. Let us say that the gasoline station gets average 5 cents on the gallon. Okay that will put us at $2.51 per gallon that will go to the oil company. The average car has a 12 gallon to 17 gallon gas tank. If you multiply $2.51 by 12 the average person is paying $30.12 to the oil company.
During my research, I have talked to a few gasoline stations in my area and they have told me that to keep competitive they only get between 2 cents to 5 cents per gallon of gasoline. They told me that they make their money from the other items that they sell.
Getting back to the ridiculous statement by Mulva, he states in Europe the prices of gasoline range from $5 to $7. Okay, let us look at what the tax rate is in the UK (United Kingdom).
In the April 2005 reporting period unleaded gasoline had a tax of $4.34 per gallon. The price of a gallon of gasoline is $5.64 in the UK that will leave $1.30. If the gasoline stations take 5 cents per gallon, the oil company gets only $1.25 per gallon of gasoline. That means the typical person in the UK will pay the oil company $15 for 12 gallons of gasoline. http://money.cnn.com/pf/features/lists/global_gasprices/price.html
Now, I see a disparity between the US and the UK of $15.12. What is wrong with this picture? Why is the American citizen paying double what the UK is paying?
For whatever reason, the American citizen is paying the oil companies more than what is our fair share. In order to make their profit margins we are taking the hit with high-energy prices. The citizens that rely on gasoline to go to and from work are paying the high dividends to the stockholders of these companies.
My opinion is that the American citizen should get a rebate from these oil companies in compensation. I would rather pay more in taxes to bring down the deficit than put it in the pockets of some multi-millionaire.
I just have to tell you Mulva's reasoning behind the high gasoline prices. This is funny in a sad way. "This is a global business, and it's not only that we need to add to supply, but we need to reduce demand." "In the United States alone, we have about 2 percent of world oil reserves, 5 percent of the population and yet we use about 25 percent of the world's consumption of oil." In other words, what this guy is telling us is that, they are going to control (gouge) the American citizen in order for us to use less gasoline. My question to them is, how the heck are we going to get around when the public transportation infrastructure is not available in most parts of this country? I am sorry, but I am not going to ride a bike from Joliet to Chicago or Naperville. That is ludicrous. (I added the word (gouge) because that is my opinion of the whole thing.)
One thing to remember here is that Mulva is speaking on behalf of ConocoPhillips Company's reasoning to raising the price of gasoline. It is my opinion, though, that all the executives pretty much sang the same tune. That is why only Mulva's excuse was quoted in this article.
EXCUSES, EXCUSES, EXCUSES.
This is price gouging in its truest form and it is happening on a national level. How can this be justified? It cannot.
I guess it is because at one time, we were the wealthiest, strongest and the best. If the corporations are going to take over, they have to bring this great nation down by raising the costs of products here, selling out to other countries, continuous layoffs and opening our boarders to low income immigration. This will topple our country. The American citizen will be standing in welfare lines and food lines like back in the "New Deal" era. We will not own property because we will not be able to afford the cost of owning a house or condominium. We will be forced to rent just like the serfs way back when.
How can our elected officials allow this to go on? I am appalled at their lack of vigilance as to protecting the public good. I am so angry with them that I am going to do everything in my power to lend my support to the opposing party. I do not care if they are independent or democrat. I want to see new faces in the seats of our government. I want to see people that have real moral and ethical values. I want to see people sitting in those chairs that believe in the greatness of the United States of America and not the Organization of American States as the present legislators do. I want honesty, integrity and accountability from our elected officials. I do not want any more lip service from these people just to get re-elected. I want results and you should too.
If they do not do their jobs in protecting the United States citizen then I will work to fire them for incompetence.
I understand that you are now wondering what you can do to rectify this horrible situation. All I can do is give you my recommendations.
What I would do first is call, write your legislators, and tell them to investigate the oil companies for gouging the American citizen.
Then I would contact an attorney who would file a lawsuit against the oil companies for price fixing.
The next thing I would do is take a critical look at my elected officials, where they stand on this issue and all the other issues. I would look at their voting records. When you vote in the next election, vote with the knowledge of who the person is that you are going to allow to speak for you.
Personally, I would get rid of the whole lot of them and bring in some new faces that are not career politicians and/or millionaires.
© Cynthia A. Janak
I was asked to simplify what is going on in the oil and gas industry. My dilemma is this, how do you simplify something that is so complex? This was not an easy problem to solve but I came up with a solution.
Money is something that everyone understands. We have to go to work to make money to pay our mortgages, utility bills and everyday living expenses. We have to budget, allocate and balance what we have to spend every day of our lives. That is why I am going to give you the dollars and cents of "THE CRUDE TRUTH."
In my last two articles about "THE CRUDE TRUTH" I gave you what is being said about the high cost of oil and the toxins. Putting it simply, they were all about the bottom line, PROFIT. What I am going to do here is show you where part of the PROFIT goes.
Let us start with the yearly compensation that the executives of the oil companies receive. I am going to put this information in a table format to make it simpler to understand. All information that I am going to give you in these tables is coming from Reuters.com. It is a great site to find out the latest information about what is in the news today.
Exxon/Mobil Corporation (XOM)
| Name | Total Annual Compensation, USD | Long-term Incentive Plans, USD | All other, USD | Fiscal Year (2004) Total, USD |
| Tillerson, Rex W. | $2,488,936 | $1,726,025 | $72,100 | $4,287,061 |
| Simon, J. Stephen S. | $1,888,327 | $1,320,023 | $124,093 | $3,332,443 |
| McGill, S. R. | $1,891,110 | $1,428,670 | $80,020 | $3,399,800 |
| Galante, Ed G. | $1,891,576 | $1,526,020 | $56,980 | $3,474,576 |
| Total yearly income for these executives | $14,493,880 | |||
Chevron Corporation (CVX)
| Name | Total Annual Compensation, USD | Long-term Incentive Plans, USD | All other, USD | Fiscal Year (2004) Total, USD |
| O’Reilly, David J. | $5,101,083 | $3,575,250 | $124,000 | $8,800,333 |
| Robertson, Peter J. | $2,379,583 | $1,532,250 | $70,367 | $3,982,200 |
| Watson, John S. | $1,635,417 | $825,713 | $50,833 | $2,511,963 |
| Kirkland, George L. | $1,618,750 | $595,875 | $49,500 | $2,264,125 |
| Total yearly income for these executives | $17,558,621 | |||
ConocoPhillips (COP)
| Name | Total Annual Compensation, USD | Long-term Incentive Plans, USD | All other, USD | Fiscal Year (2004) Total, USD |
| Mulva, James J. | $8,412,629 | $22,533,686 | $155,305 | $31,101,620 |
| Carrig, John A | $2,830,860 | $3,596,486 | $67,433 | $6,494,779 |
| Lowe, John E. | $2,464,628 | $3,079,343 | $55,799 | $5,599,737 |
| Frederickson, Philip L. | $1,412,739 | $2,926,516 | $55,633 | $4,394,888 |
| Berry, William B. | $1,853,301 | $3,952,472 | $73,483 | $5,879,256 |
| Gates, Stephen F. | $1,361,214 | $2,468,508 | $58,423 | $3,888,145 |
| Total yearly income for these executives | $57,358,425 | |||
British Petroleum (BP)
| Name | Total Annual Compensation, USD | Long-term Incentive Plans, USD | All other, USD | Fiscal Year (2004) Total, USD |
| Madingley, Browne | $3,291,000 | - | $5,160,000 | $8,451,000 |
| Grote, Byron E. | $2,023,000 | - | $3,496,000 | $5,519,000 |
| Hayward, Anthony B. | $905,000 | - | $1,301,000 | $2,206,000 |
| Manzoni, John A. | $918,000 | - | $1,327,000 | $2,245,000 |
| Allen, David C. | $923,000 | - | $1,327,000 | $2,250,000 |
| Conn, Iain C. | $914,000 | - | $745,000 | $1,659,000 |
| Total yearly income for these executives | $22,330,000 | |||
Royal Dutch Shell (RDSa)
| Name | Total Annual Compensation, USD | Long-term Incentive Plans, USD | All other, USD | Fiscal Year (2004) Total, USD |
| Van der Veer, Joroen | $3,484,246 | - | - | $3,484,246 |
| Voser, Peter | $2,005,740 | - | - | $2,005,740 |
| Brinded, Malcom | $2,397,835 | - | - | $2,397,835 |
| Cook, Linda | $2,494,417 | - | - | $2,494,417 |
| Routs, Rob | $2,178,237 | - | - | $2,178,237 |
| Total yearly income for these executives | $12,560,475 | |||
Do you want to know what surprised me about this data? What surprised me the most was, that Exxon was 4th in total yearly income paid to their executives. (I did forget to mention that the charts do not include any stock options that the executives are given. With this considered the total compensation package per fiscal year would be greater in some instances.)
The grand total of the yearly income for these 25 executives is $124,301,401. WOW. This is more that any of us could earn in a dozen lifetimes. They earn this in one year.
What really gets me upset is that the oil companies have the gall to say, "In parts of Europe and elsewhere in the West, gasoline prices are more like $5 per gallon to $7 per gallon," said the chairman of ConocoPhillips Co., James J. Mulva. http://www.msnbc.msn.com/id/13404319/
Let us look at this statement made from a man that makes $31,101,620 a year.
Our government only makes around (April 2005) 38 cents on a gallon of gasoline. The State of Illinois, where I live, only collects 19 cents on a gallon of gasoline. When you add that up the total taxes for motor fuel is 57 cents in Illinois. http://tax.illinois.gov/Motorfuel/Mft/taxrates.htm
Now, let us look at what the average price of unleaded gasoline is today in the State of Illinois. (To look up the current prices for your state go to http://zfacts.com/p/48.html )
Today, July 10th, 2006, the average price of unleaded is $3.13 per gallon. If you subtract 57 cents from $3.13 you get $2.56. Let us say that the gasoline station gets average 5 cents on the gallon. Okay that will put us at $2.51 per gallon that will go to the oil company. The average car has a 12 gallon to 17 gallon gas tank. If you multiply $2.51 by 12 the average person is paying $30.12 to the oil company.
During my research, I have talked to a few gasoline stations in my area and they have told me that to keep competitive they only get between 2 cents to 5 cents per gallon of gasoline. They told me that they make their money from the other items that they sell.
Getting back to the ridiculous statement by Mulva, he states in Europe the prices of gasoline range from $5 to $7. Okay, let us look at what the tax rate is in the UK (United Kingdom).
In the April 2005 reporting period unleaded gasoline had a tax of $4.34 per gallon. The price of a gallon of gasoline is $5.64 in the UK that will leave $1.30. If the gasoline stations take 5 cents per gallon, the oil company gets only $1.25 per gallon of gasoline. That means the typical person in the UK will pay the oil company $15 for 12 gallons of gasoline. http://money.cnn.com/pf/features/lists/global_gasprices/price.html
Now, I see a disparity between the US and the UK of $15.12. What is wrong with this picture? Why is the American citizen paying double what the UK is paying?
For whatever reason, the American citizen is paying the oil companies more than what is our fair share. In order to make their profit margins we are taking the hit with high-energy prices. The citizens that rely on gasoline to go to and from work are paying the high dividends to the stockholders of these companies.
My opinion is that the American citizen should get a rebate from these oil companies in compensation. I would rather pay more in taxes to bring down the deficit than put it in the pockets of some multi-millionaire.
I just have to tell you Mulva's reasoning behind the high gasoline prices. This is funny in a sad way. "This is a global business, and it's not only that we need to add to supply, but we need to reduce demand." "In the United States alone, we have about 2 percent of world oil reserves, 5 percent of the population and yet we use about 25 percent of the world's consumption of oil." In other words, what this guy is telling us is that, they are going to control (gouge) the American citizen in order for us to use less gasoline. My question to them is, how the heck are we going to get around when the public transportation infrastructure is not available in most parts of this country? I am sorry, but I am not going to ride a bike from Joliet to Chicago or Naperville. That is ludicrous. (I added the word (gouge) because that is my opinion of the whole thing.)
One thing to remember here is that Mulva is speaking on behalf of ConocoPhillips Company's reasoning to raising the price of gasoline. It is my opinion, though, that all the executives pretty much sang the same tune. That is why only Mulva's excuse was quoted in this article.
EXCUSES, EXCUSES, EXCUSES.
This is price gouging in its truest form and it is happening on a national level. How can this be justified? It cannot.
I guess it is because at one time, we were the wealthiest, strongest and the best. If the corporations are going to take over, they have to bring this great nation down by raising the costs of products here, selling out to other countries, continuous layoffs and opening our boarders to low income immigration. This will topple our country. The American citizen will be standing in welfare lines and food lines like back in the "New Deal" era. We will not own property because we will not be able to afford the cost of owning a house or condominium. We will be forced to rent just like the serfs way back when.
How can our elected officials allow this to go on? I am appalled at their lack of vigilance as to protecting the public good. I am so angry with them that I am going to do everything in my power to lend my support to the opposing party. I do not care if they are independent or democrat. I want to see new faces in the seats of our government. I want to see people that have real moral and ethical values. I want to see people sitting in those chairs that believe in the greatness of the United States of America and not the Organization of American States as the present legislators do. I want honesty, integrity and accountability from our elected officials. I do not want any more lip service from these people just to get re-elected. I want results and you should too.
If they do not do their jobs in protecting the United States citizen then I will work to fire them for incompetence.
I understand that you are now wondering what you can do to rectify this horrible situation. All I can do is give you my recommendations.
What I would do first is call, write your legislators, and tell them to investigate the oil companies for gouging the American citizen.
Then I would contact an attorney who would file a lawsuit against the oil companies for price fixing.
The next thing I would do is take a critical look at my elected officials, where they stand on this issue and all the other issues. I would look at their voting records. When you vote in the next election, vote with the knowledge of who the person is that you are going to allow to speak for you.
Personally, I would get rid of the whole lot of them and bring in some new faces that are not career politicians and/or millionaires.
© Cynthia A. Janak
The views expressed by RenewAmerica columnists are their own and do not necessarily reflect the position of RenewAmerica or its affiliates.
(See RenewAmerica's publishing standards.)
