Gas hit $2.95 per gallon over the weekend here in Madison and has risen to well over $3 per gallon elsewhere. Last Wednesday oil hit a record $74 for barrel due in large part to increasing tensions in Iran and shortages in Nigeria. Blame cannot solely be put on these global events, however. There is much that can be done here to prevent exorbitant prices.
We are paying 90 percent more for gas since President Bush took office. The war in Iraq and the events of Sept. 11, 2001 obviously have something to do with this, but so does unprecedented oil company profits. Exxon Mobil Corp., whose former CEO Lee Raymond is a UW-Madison graduate, made a $10.7 billion profit in the fourth quarter of 2005, and the next four largest companies made a combined $22 billion. With the largest oil company earning a yearly profit of $36.1 billion, up 31 percent from the previous year, should not something be done to help Americans at the pump?
After a similar earnings report in the third quarter of 2005, there were calls from both parties, including Gov. Jim Doyle, to investigate possible price gouging. The big increases in the cost of gasoline went right into the profits of the big oil companies,\ Doyle said in the Milwaukee Journal-Sentinel. Even Senate Majority Leader Bill Frist, R-Tenn., joined in the fray saying, ""If there are those who abuse the free enterprise system to advantage themselves and their businesses at the expense of all Americans, they ought to be exposed, and they ought to be ashamed.""
Shortly after the earnings report came out in late January, it was reported that the federal government was ""on the verge of one of the biggest giveaways of oil and gas in American history."" Over the next five years the government is going to allow the pumping of $65 billion of oil from federal territory without paying any royalties. This will add another $7 billion of income to oil companies, which I am sure will help fund Raymond's $400 million retirement package.
So what can we do? Nothing. Right now the power is in the hands of a Rubber Stamp Republican Congress. A congress which has allowed record prices and record profits go by without a second thought. According to House Minority Leader Nancy Pelosi, D-Calif., this is ""just the latest example of the wealthy few benefiting at the expense of hard-working Americans under the Bush administration.""
She goes on to explain how Congress has passed two energy bills which have cost taxpayers $12 billion in giveaways to big oil. If you are counting, that is now $19 billion which could help lower gas prices.
Beyond huge profits, price gouging is another concern. Last September, Democrats attempted to pass Senate Bill 1735, the ""Energy Emergency Consumer Protection Act of 2005,"" which would ""give federal and state regulators new authority to prosecute price gouging in the wake of national energy emergencies."" Last week Doyle also urged the state Legislature to pass two bills making price gouging illegal.
So far nothing has come of either of these efforts and, with a recent study from the Foundation for Taxpayer & Consumer Rights released last week saying that in California ""corporate markups and profiteering are responsible for spring price spikes, not rising crude costs or the national switchover to higher-cost ethanol, as the oil industry claims,"" something obviously must be done.
Oil companies have an addiction to obscene profits, and our government is their enabler. Investigations into oil company profits and price-gouging must be done quickly and without partisan bickering before we are forced to pay even more at the pump.
Of course, another solution would be to wage war across the entire Middle East, which contains 66 percent of the world's oil reserves, in order to control gas prices across the globe. But we would never dream of doing that, would we?
Erik Opsal is a sophomore majoring in political science. His column appears every Tuesday in The Daily Cardinal. Send responses to opinion@dailycardinal.com. Gas hit $2.95 per gallon over the weekend here in Madison and has risen to well over $3 per gallon elsewhere. Last Wednesday oil hit a record $74 for barrel due in large part to increasing tensions in Iran and shortages in Nigeria. Blame cannot solely be put on these global events, however. There is much that can be done here to prevent exorbitant prices.
We are paying 90 percent more for gas since President Bush took office. The war in Iraq and the events of Sept. 11, 2001 obviously have something to do with this, but so does unprecedented oil company profits. Exxon Mobil Corp., whose former CEO Lee Raymond is a UW-Madison graduate, made a $10.7 billion profit in the fourth quarter of 2005, and the next four largest companies made a combined $22 billion. With the largest oil company earning a yearly profit of $36.1 billion, up 31 percent from the previous year, should not something be done to help Americans at the pump?
After a similar earnings report in the third quarter of 2005, there were calls from both parties, including Gov. Jim Doyle, to investigate possible price gouging. ""The big increases in the cost of gasoline went right into the profits of the big oil companies,"" Doyle said in the Milwaukee Journal-Sentinel. Even Senate Majority Leader Bill Frist, R-Tenn., joined in the fray saying, ""If there are those who abuse the free enterprise system to advantage themselves and their businesses at the expense of all Americans, they ought to be exposed, and they ought to be ashamed.""
Shortly after the earnings report came out in late January, it was reported that the federal government was ""on the verge of one of the biggest giveaways of oil and gas in American history."" Over the next five years the government is going to allow the pumping of $65 billion of oil from federal territory without paying any royalties. This will add another $7 billion of income to oil companies, which I am sure will help fund Raymond's $400 million retirement package.
So what can we do? Nothing. Right now the power is in the hands of a Rubber Stamp Republican Congress. A congress which has allowed record prices and record profits go by without a second thought. According to House Minority Leader Nancy Pelosi, D-Calif., this is ""just the latest example of the wealthy few benefiting at the expense of hard-working Americans under the Bush administration.""
She goes on to explain how Congress has passed two energy bills which have cost taxpayers $12 billion in giveaways to big oil. If you are counting, that is now $19 billion which could help lower gas prices.
Beyond huge profits, price gouging is another concern. Last September, Democrats attempted to pass Senate Bill 1735, the ""Energy Emergency Consumer Protection Act of 2005,"" which would ""give federal and state regulators new authority to prosecute price gouging in the wake of national energy emergencies."" Last week Doyle also urged the state Legislature to pass two bills making price gouging illegal.
So far nothing has come of either of these efforts and, with a recent study from the Foundation for Taxpayer & Consumer Rights released last week saying that in California ""corporate markups and profiteering are responsible for spring price spikes, not rising crude costs or the national switchover to higher-cost ethanol, as the oil industry claims,"" something obviously must be done.
Oil companies have an addiction to obscene profits, and our government is their enabler. Investigations into oil company profits and price-gouging must be done quickly and without partisan bickering before we are forced to pay even more at the pump.
Of course, another solution would be to wage war across the entire Middle East, which contains 66 percent of the world's oil reserves, in order to control gas prices across the globe. But we would never dream of doing that, would we?
Erik Opsal is a sophomore majoring in political science. His column appears every Tuesday in The Daily Cardinal. Send responses to opinion@dailycardinal.com.
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