Oil companies targeted in Obama's Pennsylvania ad campaign
Published Thursday, April 3, 2008
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Stumble It!WASHINGTON — Presidential candidate Barack Obama is vowing to take on Big Oil in a new TV ad now playing in the primary battleground state of Pennsylvania.
The 30-second-spot opens with a shot of a long line of cars waiting at an Exxon retail station during the energy crisis of the 1970s.
“Nothing’s changed,” Obama says in the ad. “Except now, Exxon’s making $40 billion a year, and we’re paying $3.50 for gas.”
The Illinois Democrat goes on to say he won’t let Big Oil “block change anymore” and that he’ll push for a tax on “windfall profits” to pay for developing alternative sources of energy and energy assistance for low-income families.
Obama’s energy policy critics, including Sen. Lisa Murkowski, R-Alaska, insist he’s oversimplifying a complex matter that cannot be solved by scapegoating the oil industry.
Murkowski said Obama’s message has populist appeal but does little to solve the nation’s energy problems and could reduce the oil and gas industry’s investment in Alaska.
“His words will be effective because people want someone to blame,” she said. “The reality is that there’s no simple answer to this.”
The ad, which began airing in Pennsylvania on March 28, plays to voter concern about high gasoline prices. Drivers in the Lower 48 were paying on average $3.28 for a gallon of gas on Tuesday. The average price in Alaska was $3.68 a gallon.
Meanwhile, the top five oil companies together reported $123 billion in profits in 2007. Exxon Mobil, which the Obama ad seems to specifically target, earned $40.6 billion last year.
The truth about why gas prices are so high is probably too complicated to explain in a 30-second TV ad, Murkowski said.
The American Petroleum Institute, a trade group representing the country’s biggest oil and gas companies, says the cost of crude oil makes up 69 percent of the price of gasoline, with 13 percent attributed to state and federal taxes, and 18 percent to the cost of refining and distribution.
Obama energy adviser Jason Grumey recently told Reuters news service that the candidate would stick it to Big Oil.
Grumey said Obama would take an active role in U.S. oil markets as president, challenging the dominance of large oil companies and perhaps using the Strategic Petroleum Reserve to ease supply concerns and lower prices.
Obama would also examine whether mergers in the industry have reduced competition and had a negative impact on consumers, according to Sean Smith, spokesman for the Obama campaign.
“We have an administration that talks a lot about competition but does very little to ensure we have it,” Smith said.
Obama has accused the Bush administration of being too cozy with the oil and gas industry, noting that Vice President Dick Cheney met with oil executives 40 times while developing White House energy policy. Obama wants to invest $150 billion throughout 10 years to develop clean-energy supplies and free the U.S. from dependence on foreign oil, Smith said.
Murkowski said increasing the tax burden on the oil industry could harm investment in Alaska, and the U.S. in general, by driving companies overseas.
“If you assess enough penalties to the oil industry and you make it not attractive to invest and operate in this country, it’s going to hurt us in Alaska,” she said. “If you look at what’s happening on the national level and then throw in what we’re doing at the state level, then places like Nigeria start to look more attractive, even with what’s going on there politically.
“If you push too far, you have to realize these companies have other options.”
Rayola Dougher, senior economic analyst at the American Petroleum Institute, said the oil and gas industry is already taxed at a rate of 40.7 percent, compared to 22 percent for the U.S. manufacturing sector.
Dougher cautioned against believing the nation’s complex energy issues could be solved with a few simple sound bites and said the idea of tapping the Strategic Petroleum Reserve was a “dangerous game” that could easily result in the oil cartel Organization of Petroleum Exporting Countries cutting production.
Murkowski said she agrees that the nation needs to increase its use of renewable energy, such as solar, wind and geothermal, but that traditional oil and natural gas will continue to be part of the nation’s energy supply far into the future.
“There a balance that has to be found,” said Murkowski, who sits on the Senate Energy and Natural Resources Committee. “We have to be sure that we’re encouraging an appropriate level of investment so that we can have the level of domestic production that we need.”
Murkowski and Sen. Ted Stevens, R-Alaska, are pushing legislation to allow oil and gas drilling in the coastal plain of the Arctic National Wildlife Refuge if the price of oil tops $125 a barrel.
The proposal, which is strongly opposed by conservation groups, is not expected to find much support while Democrats control both chambers of Congress.
While opening ANWR would not immediately increase the supply of oil, it would reduce market speculation that is adding to the price of oil, Murkowski said.
“I think it’s important that the public knows that there are some alternatives out there that could help reduce the price of oil,” Murkowski said. “The ANWR piece to this puzzle is still very viable.”
Community Discussion
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If you don't like the price of oil, talk to OPEC, they set the price standards, no one else. If we lower prices significantly below the market cost, then they will flood the market & bankrupt everyone besides themselves & then raise prices again. OPEC essentially blackmails us & there isn't anything we can really do.
Forget the morgage crisis and the "looming recession." The problem is the price of fuel. It drives the cost of everything else. Now, a positive of this is it should fuel a renewable energy technology race. We are addicted to oil.
AKprincess, who do you think supports the autocratic dictators of saudi arabia?
i certainly don't see any american oil companies lobbying OPEC on behalf of the american people for cheaper oil..
but thats beside the point....we're a country full of whiny little heroin addicts. our wastful ways, piss poor urban planning, sprawl, gas guzzling tanks, cheap pre-fabricated poorly insulated homes, all revolve around the price of oil being low...in europe, a gallon of gas costs over twice as much as it does here...they drive cars that get 3 to 4 times better fuel economy, live in dense mixed zoned communities where things are within walking distance and have good public transit...and are investing like CRAZY in alternative energy w/ price incentives because they have the guts, courage, leadership and forsight to know that cheap oil is only temporary. by 2020, over 30% of Germany's electricity will come from solar power!!! the US currently gets less than 1% of our energy from renewables...
the oil companies and their windfall profits should be investing like crazy in alternatives...
and yet, we subsidize the hell out of oil and coal...we're like a third world country!
the big crunch is coming...so much of our food production depends on petroluem..if we continue to have this cheap oil, no one will be able to afford to eat..i say, lets add a $2.00 tax to gasoline...the money raised will go towards subsidizing the food production and the rest will go towards investing in alternative energy sources. if its a choice between eating and communting 25 miles a day in inefficient ginormous SUV's, i choose the former. people can find easier ways to adapt to the latter...carpooling, taking the bus, riding a bike..living closer to town..
people have very little control over the price they spend on food at fred myers.
Patcaribou, lobbying OPEC is like lobbying the mob. I wish it wasn't that way, but it is. Also, some oil companies are investing in alternatives. Try to support those companies that do, as opposed to the ones that don't. I can't always choose where my money goes as I don't have much, but I always 'vote' with my dollars whenever I can.
i prefer to vote the old fashioned way... for people with progressive ideals who want a real energy policy that will wean us off fossil fuels and make us energy dependent; people who are not beholden to giant corporations...
yeah, i see BP's "beyond petroleum" media blitz on all the sunday morning talk shows, and its so wonderful that oil companies have voluntarily taken it upon themselves to invest in alternative energy...its just PR. what they invest in alternative energy is a drop in the bucket compared to what is needed. most of the time, their ad budgets touting "green technologies" are larger than their actual budgets on green technology.
no, this is something that government has to play a role in.
the fact that we, as taxpayers, subsidize the fossil fuel industry is preposterous. we should be subsidizing solar and wind out the wazoo...the longer we wait, the more painful the transition will become both economically and environmentally.
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