Wild Bill O'Reilly
Nothing sets Fox host Bill O'Reilly's hair aflame quite so spontaneously as does any discussion of our good old U.S. oil and gas business.
With world crude oil prices again racing past $100 a barrel and visits to the gas pump challenging root canals for last place on most Americans' bucket list, Bill's coiffure often glows like a California hillside during drought season.
Again, our 6-foot-4-inch pugnacious fighter for the folks is mad, and nothing satisfies him more than delivering a roundhouse kidney punch to those oilfield yahoos who, yes, once more, are ripping off the little guy.
O'Reilly's latest conspiracy theory is simple enough. Gasoline will soon be four, or five, or nine, or twenty dollars a gallon because the U.S. "oil cartel" is taking all of our petroleum and sending it to China. Evidence? Not a whit.
For a guy so vilified by the mainstream press as just another heavy-handed right-winger, "conservative" Bill is forever calling upon those ever-so-earnest bureaucrats in D.C. to step in and show those oilmen how it's done.
For the record, about 19 million barrels of petroleum products -- most imported -- are delivered every day in our country. U.S. refiners export about 2.9 million barrels a day of finished products such as jet fuel or diesel to foreign customers -- creating jobs and profits here. So how is this bad?
American oil producers send about 37,000 barrels of crude a day to foreign customers in a worldwide market of almost 90 million barrels daily. It is silly to believe that this relatively miniscule export market for crude or refined products could drive world petroleum prices.
Other U.S. manufactures actively seek overseas markets for everything from iron ore to soybeans to gummy bears, and we all cheer them on. Even the export of U.S. electricity is up about 75% over the last decade, but we hear no complaints about that even as our utility rates increase.
So why is there all this angst over the limited export of petroleum products that help maintain good-paying American jobs? Does anyone think it would be in our country's best interest to have those contracts filled by a Caribbean refiner who purchases the same crude in the same commodities market as does a U.S. refiner?
O'Reilly's reaction is as incendiary as it is baffling; it's our land, it's our oil, and those big-oil fat cats have no right to send it overseas just to drive up their profits here. So, you see, "conservative" pundits can be just as adroit as those on the outer limits of the left in resorting to bigotry and class warfare to make a point -- whatever that might be.
Even guest Charles Krauthammer was unsuccessful in his valiant efforts to talk Bill down off the ledge. He correctly and calmly explained that oil companies often do own the land on which they produce -- and if not, they pay the rightful landowner handsome royalties and the government significant severance taxes on production. Our government receives huge direct payments from the industry -- almost $100 billion over the last decade -- for access to federal lands. If the exploration well comes up dry, none of the upfront bonuses are returned.
On top of this, the oil and gas companies pay far higher federal income taxes as a share of their net income than do firms in other industries. And still Bill O'Reilly misses no opportunity to inflame American consumers with unfounded allegations that they are being "gouged" by the oil tycoons. But look closer at his charge that exports are being manipulated to unfairly jack up gasoline prices.
Fifteen years ago, U.S. oil producers exported almost seven times as much crude each day, and yet gasoline costs were much lower then. Refined product exports are up sharply over the past year, but only about the same amount that is not required domestically due to the economic downturn. In other words, U.S. refiners are seeking foreign contracts to fill their short-term excess capacity and keep their American employees working and U.S. motorists fully supplied. If exports of refined products were prohibited, as O'Reilly wants, those refineries would operate well below capacity and drive up average costs on the domestic-only output.
When adjusted for inflation, gasoline prices reached a record $4.21 a gallon in July 2008 at a time when our refined products exports were less than half what they are today. By the end of the year, that price had plunged to $1.61. That's one heck of a price-manipulation job, isn't it?
In another dust-up several years ago -- this time with Fox Business Network Host Neil Cavuto -- O'Reilly shouted: "Private industry can cause a depression. Private industry can cause people much suffering. Our elected officials have got to say, 'They're not running their companies the right way. Get out of there.'" Leon Trotsky could have said it better.
Cavuto corrected Bill with this: "The government cures are worse than the disease they address. They make the economy worse than it otherwise would be." Ayn Rand might remind Mr. O'Reilly that all dictatorships are based on altruism. Indeed, be very careful what you request.
The bottom line is this: the federal government, as representative of the American people, profits infinitely more than does the U.S. oil and gas industry from the latter's own work. And yet scores of petty politicians from both parties have done virtually all they can for decades to drive this crucial industry to oblivion.