McConnors corner
They Do Not Care
By Sean McConnor
Jul 27, 2008 - 7:54:10 AM

At one time, I worked for the LA County schools. I was a clerk for two sites which meant I worked two days at one site and three at the other. In the midst of my employment, we would get these stupid memos all the time about this and that. Finally, I  had it. I told one of my co-workers at the Compton site that I was going to write the bosses in Downey and express my opinion. My co-worker, Ed, said, "Forget it because they do not care!" Sometimes, I think that is what is going on in the oil industry these days.

Hey, I am not knocking the sudden inclination for the oil people to drill in the U.S. again instead of shipping oil from the Middle East in tankers. I understand that in East Texas, a former oil boom spot in the 1920s and 1930s, a surge is underway to drill for oil, gas, and dig for coal. It is a boomtown down there again. You can't get into one county courthouse because the oil guys are trying to find out who owns what, so that they can drill.

What gets me though, is some of the statements made by the oil men and women, such as the cost of oil reflects a weaker dollar (true because everything is high now), turmoil in oil producing countries (the war in the Middle East and the trouble in Nigeria), and the demand for oil from developing countries (such as India and China).

One man, Fatih Birol, an economist for a watchdog agency expresses some pessimism about the oil supply. One Texas oilman, Jim Baldauf, is much more optimistic because there are a lot of lands yet to drill, like the ones in East Texas that I mentioned. And so the debate goes back and forth among the oil industry.

The Associated Press quotes Jim Mulva of ConocoPhillips, a huge oil conglomerate, as saying that the company spent $275 million before taxes on exploration. Sounded like a hefty amount to me and I felt sorry for them until I realized that the company also spent $2.5 billion to buy back its shares. By buying back its shares, the company shrinks the amount of shares on the market, increases the value of the stock, and makes more individual stockholders wealthy. I guess that leaves 99.9 percent of the population out of this oil bonanza because we don't own oil stock or any stock at all.

What is going to drive down the cost of gasoline in the end is what we do as consumers. The value of a barrel has plummeted almost $18 in recent weeks because of a slowing economy. It proves the old saying that you can't get blood from a dry turnip. We consumers don't have the money for gas and we aren't going to buy it at the expense of food and housing to makes others enormously rich and fat.



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