BIG OIL

Bill  Phillips spent nearly 50 years in the US oil and gas industry;
most of his career was with the Phillips Petroleum Company.  Bill is a
descendant of Frank Phillips.  Frank Phillips, along with his brother
Lee Eldas  (L.E.) Phillips, Sr., founded the original Phillips Petroleum
Company in 1917 in  Bartlesville, OK.   Do you remember Phillips 66 gas
stations?  Phillips  Petroleum Company merged with Conoco, Inc. in 2002
to form the current ConocoPhillips  oil company.

So, when Bill talks about oil and gas  issues, I tend to listen - very
closely. I think that you will find Bill's  thoughts and facts very
revealing, very compelling and very difficult to argue  with.

As you prepare to cast your crucial  ballots this Fall, please think
long and hard about the far-reaching, cumulative  effects of the US
political philosophies, policies and legislation that have  contributed
to the current and future US oil supply  situation.

May 28, 2008

"Big Oil"
Did you know that the United States does NOT  have any big oil
companies. It's true: the largest American oil company, Exxon Mobil, is
only the 14th largest in the world, and is dwarfed by the really big oil
companies--all owned by foreign governments or government-sponsored
monopolies--that dominate the world's oil supply.

This graph below (?) tells the story; you  can barely see the American
oil companies as minor players on the right side of  the chart in gray.
The chart was presented to the House committee last week by  Chevron.

With  94% of the world's oil supply locked up by foreign governments,
most of which  are hostile to the United States , the relatively puny
American oil companies do  not have access to enough crude oil to
significantly affect the market and help  bring prices down. Thus,
ExxonMobil,  a "small" oil company, buys 90% of the crude oil that it
refines for the U.S.  market from the big players, i.e, mostly-hostile
foreign governments. The price  at the U.S. pump is rising because the
price the big oil companies charge  ExxonMobil and the other small
American companies for crude oil is going up as  the value of the
American dollar goes down.  They will eventually bleed this  country
into printing even more money and we will go into runway inflation once
again as we did under the Carter Democratic reign.

This is obviously a tough situation for  the American consumer. The
irony is that it doesn't have to be that way. The  United States
--unlike, say, France --actually has vast petroleum reserves. It  would
be possible for American oil companies to develop those reserves, play a
far bigger role in international markets, and deliver gas at the pump to
American consumers at a much lower price, while creating many thousands
of jobs  for Americans. This would be infinitely preferable to shipping
endless billions  of dollars to Saudi Arabia ,  Russia and Venezuela to
be  used in propping up their economies.

So, why doesn't it happen? Because the  Democrat Party--aided, sadly, by
a handful of Republicans--deliberately keeps  gas prices high and our
domestic oil companies small by putting most of our  reserves off limits
to development.  China is now drilling in the Caribbean, off  Cuba but
our own companies are barred by law from developing large oil fields
off the coasts of  Florida and California . Enormous oil-shale deposits
in the  Rocky Mountain states could go a long way toward supplying
American consumers'  needs, but the Democratic Congress won't allow
those resources to be developed.  ANWR contains vast petroleum reserves,
but we don't know how vast, because  Congress, not wanting the American
people to know how badly its policies are  hurting our economy, has made
it illegal to explore and map those reserves, let  alone develop them.

In short, all Americans are paying a terrible price for the  Democratic
Party's perverse energy policies.   I own some small interests in  tiny,
4 barrel-per-day oil wells in Wyoming .  We have 14 agencies that have
iron-hand jurisdiction over us.   If we drop any oil on the ground when
the  refinery truck comes to pick up oil from our holding tanks, we are
fined.  Yet  down the road the state will spray thousands of gallons of
used oil on a dirt  road to control dirt. When it rains, that oil runs
into rivers and creeks.  Yet  a cup of oil on the ground at our wellhead
is a $50,000 EPA fine plus additional  fines from state regulating
agencies.  They treat oil as if it were plutonium  that has the
potential to leak into the environment.  We are fined if our dirt  burms
are not high enough around a holding tank, yet the truck that picks up
our  oil runs down the road at 60 mph with no burm around it.  People
wonder why  there is no more exploration in this country.   It's because
of the regulators;  people who have lived their whole lives doing
nothing but imposing fines on  small operators like us for doing mostly
nothing.

So, America enjoy your $4.00 per gallon  gasoline.  Your dollar is now
worth 0.62 Euro-Cents.  The lack of American  production of GNP, the
massive trade deficit (as labor markets have moved  overseas to fight
insanely high union imposed labor costs in America ) and the  run away
printing of money (backed by nothing of value here in America ) has
caused the dollar to become more worthless on the international market.
And  that's where our oil comes from.   It's paid for with dollars that
become more  worthless everyday.   If we had just kept par with the Euro
we'd be paying $62  dollars per barrel for oil (42 gallons) or about
$1.50 instead of $2.50 a gallon  for crude oil.

What the US government also does not tell you is that it is  the
leaseholder and royalty recipient of most oil production and receives
25% of  the gross oil sales before we pay for electricity to lift the
oil, propane to  keep the oil-water separators from freezing in the
winters.  We pay a pumper to  visit each well everyday plus we have
equipment failures all the time.   We pay  for that out of our 75% of
gross sales. The government does not share in any  expenses to run any
production well.  So, if the Big Oil Companies are making  record
profits, then so is the federal government from it's 25% tax on every
molecule of oil sold to a refinery in this country.  Why isn't the
government on  the stand for "Record" profits?  What you don't see is
this 25% of the sales  price of crude oil being siphoned away by the
government.   That money plus the  road taxes, state taxes, etc. amounts
to over $1 per gallon of gasoline you are  buying while the governments
only admit to about 50 cents per gallon.

To all you  Democrats, when you go vote for your candidate,  just keep
in mind that their  liberal spending habits will further decrease the
value of the American dollar  on the world market and your gasoline
costs will hike even higher.   As they  introduce more give-away
programs, raise taxes on everyone to pay people not to  produce or work,
your dollar will continue to dwindle on the world market and  you will
be paying $10.00 per gallon at the next election.  Cheap hydrocarbon
fuel is all over. Enjoy! Enjoy the fruits of your decision to elect
these folks  when you are there in that voting booth and you stab your
pin through a  Democrat's name.

William "Bill"  Phillips