RUSH: I went to the MoveOn.org website today. You know what they’re all up in arms about today? High gas prices. They’re sending out an action e-mail to all of their members asking people to sign a petition to get Congress to do something about high gas prices, and Congress is going to do something about high gas prices. Have you heard this? They are going to sue OPEC! They are going to sue OPEC for high gas prices. Why aren’t they suing Big Oil, I wonder? The House voted yesterday to allow the government to sue OPEC over oil production quotas. They ought to sue themselves! They’re the ones standing in the way of our energy independence.
You know, high gasoline prices, high oil prices today are partially due to the fact that back in the Clinton administration and since the Democrats have prevented any drilling in, say, ANWR or anywhere else for our own supplies of oil. They have all this dramatic talk about alternative fuels and so forth, which is a pipe dream. There’s nothing down the road that’s anywhere near something that’s going to solve whatever problem we have. But I find it interesting they want to sue OPEC and not Big Oil. This is, again, something that will go nowhere.
RUSH: ‘The jump in U.S. gasoline prices this year has so far drained consumers of an extra $20 billion, or about $146 for each passenger car in the country, the Government Accountability Office told Congress on Tuesday.’ That’s also known as the GAO. ‘The national price for regular unleaded gasoline hit a record $3.22 a gallon this week, and is up $1.05 since the beginning of February, according to the Energy Department.’ Now, get this. ‘The added expense is taking money away from consumers to spend on other goods and services.’ Yes, it is. ‘Spending billions more on gasoline constrains consumers’ budgets, leaving less money available for other purchases.’ Why don’t you people think about this on tax cuts, for crying out loud? If you want to cut prices on gasoline, cut the taxes, the state, the city, the feds, whatever else. It adds up to 60 cents a gallon. It’s all profit. We’ve been over this I don’t know how many times. Mrs. Clinton said something about doing something to increase the supply, lower the price, I forget what it was, and I’m sitting there thinking, if you are Big Oil and you are a global concern, your market is the world, why in the world would you invest heavily in — I think this is about refineries, we need to be building more refines — who’s standing in the way of building more refineries? Environmentalist wackos. And who are they aligned with? They’re aligned with the Democrats and left. But if you’re Big Oil, why would you even consider investing gazillions of dollars in a country that is trying to ban your product? Somebody needs to ask that question besides me.
RUSH: Mike in northern Wisconsin somewhere you’re next on the EIB Network. Hello, sir.
CALLER: Hey, Rush, how’s it going?
RUSH: Fine, sir.
CALLER: I got a tanker up here, a gas tanker, and I’m not going to tell you who I drive for —
RUSH: Wait, wait, hold — time-out, time-out, I want to hear — you driving the tanker?
CALLER: Yes, I am right now. I’m going to get another load of that precious liquid gold.
CALLER: (Laughing.) Anyway, what I wanted to say was, I just delivered in a store here, and they were lined up at two stations, the one I was at and one across the street. The prices — for granted, let’s say they’re just high, okay, whatever.
CALLER: We can’t keep gas in the ground, people are buying it as fast as we can put it in the ground. I don’t know if that’s a good thing or a bad thing. I’m just telling you it doesn’t seem — if the world is going you know where in a handbasket and everything is going bad, people seem to be buying gas and going on vacations up here and —
RUSH: We know this is true. Your little story here is anecdotal, but we know it’s true. There have been surveys. Something came out yesterday that driving went down for a while, on a percentage basis from the previous year. But from what you’re describing, people waiting in line for your truck to show up to refill the tanks at the station?
CALLER: There was people there waiting, and I pulled in, and I had to block the road just so I could get in and unload this thing, and we ran all weekend. We had trucks out all week running. Now, if the economy is so bad, how come people keep buying all this gas and the motorcycles and their motor homes and — somebody’s making money somewhere putting this gas in their tanks.
RUSH: You are really shrewd, I have to tell you, and plus you have the benefit of being an eyewitness to this. This notion the economy is in bad shape and that people are fretting over gasoline prices is simply manufactured news, manufactured news from the Democrat Party, and they’re trying to compare it to food prices, which it is a necessary. We all have to eat in this country. I had somebody ask me the other day, ‘Rush, let me ask you a question, you once said, and you’re right, that that you go to the grocery store and the profit markup in a grocery store on basic foodstuffs is 1%, grocery stores make their money selling the stuff at the checkout counter and the magazines and the candy and all this sort of stuff and the mops and the spic-and-span, whatever’s in there. But on basic foodstuffs, profit margin is 1%, because people have to eat.’ He said, ‘Well, why doesn’t Big Oil look at it that way. People have to drive to get to the grocery store to eat.’ I said, ‘Well, both prices, both profit markups, both businesses are constrained by the market forces in which they operate. People do need gasoline, and that’s why they’re driving.’ They’re not going to slow down and they’re not going to stop going to work and they’re not going to get on the light rail train.
We have some of the ugliest light rail trains I have ever seen in my life right down here in West Palm Beach. I don’t go over there much, but sometimes I have to get to the airport. You get stopped sometimes, when I come in late from a flight getting home, midnight or one o’clock, that seems to be when these things are moving, and nobody’s on them — wait, no, that’s the freight trains. Take it back. These are the transit, the rush hour, little all-day-long light train. They’re supposed to be painted to look like Florida blue with the palm trees. They don’t look like that. They look ugly. They look like they’re unfinished, looks like they bought used train cars and they haven’t done anything to them. But the thing I noticed, they’re always empty. I scour, I look in the windows, you might see one or two people on a three-car train. They’re empty. People don’t want to get on these things, and they don’t want to get on buses, outside of New York, where this is standard form of transportation, cabs and buses and subways and so forth. But around the rest of the country they want to drive their cars and they’re going to and they’re going to pay whatever it costs. They might complain but they’ll pay it.
RUSH: Darren in Billings, Montana, I’m glad you waited as we get back to the phones. Welcome to the EIB Network.
CALLER: Hey, Rush, it’s great to talk with you. Mostly dittos from Montana.
RUSH: Thank you, sir. Never been there and would love to go.
CALLER: I’d say, we’d love to have you up here sometime.
RUSH: I’ll make it at some point.
CALLER: There we go. Hey, the problem with the analogy of the oil company and the grocery store is that the oil companies own the product from the raw stage to the retail stage. And the grocery store is actually the true showcase of the free market, where they’re buying products from different places and different manufacturers and wholesalers, whereas the oil companies are controlling it all.
CALLER: Well, this is the reason that gas is the price that it is. They’re the ones handling that. There is no free market in the oil business.
RUSH: Okay. There’s no free market in the oil business? The prices in the oil business are fixed? Democrats in Congress conducted an investigation, I think it was Senate Democrats might have conducted an investigation after Hurricane Katrina to find out if there was price fixing. The Democrats couldn’t find any evidence of it.
CALLER: No, I wouldn’t say that there’s price fixing.
RUSH: Well, if you —
CALLER: I simply don’t think that there is the true free market that we see in all the other industries. I don’t see any other industry that controls things from raw material to retail sale. I don’t think that the supply-demand —
RUSH: Well, then tell me how it is that the prices in this country are lower than they are anywhere else in the world?
CALLER: I don’t have an answer for you right off on that.
RUSH: Well, you know, I’ve got limited time —
CALLER: I don’t know how all the other countries are working.
RUSH: You’re a great guy, you’re a nice guy. There’s no free market in gasoline. Propaganda works on this every time the price starts going up, and I don’t get it. I just don’t.
RUSH: When you get otherwise intelligent people saying there’s no free market in the price of gasoline, after all of the countless years of detailed attention paid to the subject, the painstaking research, the patient presentation of facts by me, I often throw up my hands. Let me try, because I know that the gas price is one of these things that when it comes up, it goes up, people think that there’s some suspicious or conspiratorial reason behind it, they just cannot accept the fact that the free market works in gasoline. So let me ask a question. Or let me ask many questions. Let us speak of many answers. How many oil companies are there that sell gasoline in the United States of America? How many are there? Take a wild guess. I don’t even know the answer, but it doesn’t matter because there’s more than one. If you don’t think they are competing with each other, then you don’t know the world. ExxonMobil, BP, Shell, and whoever the others are, they compete with one another. That’s number one. I realize that some of you might think they all get together and set the price and so forth.
Second thing is, how many companies are there selling gasoline in this country that are not American? Citgo is one, there’s Hugo Chavez. British Petroleum. Do you think that ExxonMobil and BP and the rest are getting together with Hugo to set prices in the United States? Remember, now, these people are the world market. Now, where does this oil come from? Gasoline is oil first and there are a bunch of different places it comes from. All over the world. Comes from Canada. In fact, that’s the number one country we get oil from. That’s our number one importer. Saudi Arabia, Venezuela, Russia. The oil companies do not own this oil as it is. I don’t know if you’ve noticed this, but Hugo Chavez just kicked the oil companies out of Venezuela. He’s nationalizing everything. He’s taken it, screw you, if you want to stay here and run the wells and so forth we can work out a little production deal, but, ha-ha-ha-ha, this stuff belongs to Venezuela because the oil is ours. Same thing happened in Saudi Arabia and Rockefeller got his change before that happened, but same thing happened there, basically. ‘We don’t need you anymore.’
So tell me how it is that oil, which starts the whole price timeline, coming from so many different places in the world, ends up as refined gasoline with no free market determining the price in this country. I want to know how this is possible. I want to know how it is that BP, ExxonMobil, Citgo, name other companies, the size that are out there — hell, I don’t know — Conoco’s merged with somebody. I want to know how they’re getting together with the Russians and with the Saudis and coordinating this. Then I want you to tell me, the guys playing the futures market in oil on the commodities market, I want you to tell me how they are involved in this so that the price is set by one person from the time it comes out of the ground ’til it gets to your car as gasoline, the idea that that’s true is false. All these companies compete with one another at the retail level, they are competing with each other to find oil all over the world. We have to buy oil from all these different countries, and we have to refine it here. All of these aspects have market circumstances that rein in the desire for people to charge more than what they can get for it. Then you’ve got the stockholders of these publicly traded companies who are demanding profits as big as they can be. They’re publicly traded companies and if the managers of these companies don’t get as big a profit as they could or if they get too little a profit, there’s going to be hell to pay from the shareholders.
Now, I want to know how in the world anybody can genuinely think that the oil companies, who are citizens of the world, own every bit of oil that comes out of the ground and then every bit of the processing before it becomes gasoline, then it becomes gasoline and goes into your tank, I want to know how this happens. This is news to me. And why is it that the Democrats in the Congress are suing OPEC in order to do something about the rising gas prices. Why aren’t they suing Big Oil? And how is it that OPEC isn’t Big Oil and how is it that Hugo Chavez isn’t Big Oil and how is it that Russia isn’t Big Oil, and how is it that British Petroleum and ExxonMobil and Conoco or whoever else, how come they are? I’m sitting here mystified by all this. This is not to say that I’m insensitive to the price, but the idea here — oh, and one more question. Have you heard of a country called China? I’m sure many of you have. We refer to them here lovingly and affectionately as the ChiComs. Well, despite their best efforts over there, they are having an expanding economy. There are now multimillionaires in China and more and more people have access to automobiles that use gasoline, and they are putting a lot of pressure on the worldwide supply of gasoline, and in this country, your friends, the Democrats, are standing in the way of this country finding any more oil on our property; be it Alaska; be it off one of the coasts, they won’t let it happen, while at the same time they’re talking about energy independence.
So I want to know how it is, at that Big Oil, which earns 30% of its income from operations in the United States, I want to know how it is that Big Oil and all these companies competing with one another somehow control the product around the world from the moment it comes out of the ground. I want to know how they own Saudi Arabia. I want to know how they own Russia. I want to know how they own Iran. I want to know how they own Venezuela. Niger, Big Oil — there’s oil coming out of the ground everywhere but here. I want to know this. If you can answer these questions, with all the pressure on the supply, the worldwide supply that the rising Chinese economy is put — and the Indian economy, by the way, they’re going bonkers as well, if you can tell me how Big Oil controls every drop from the time it comes out of the ground until tends up as gasoline in your tank, then I can maybe accept your — but you can’t tell me because it’s not possible, because it isn’t true, because it doesn’t happen.
If you want a shocking statistic, I’ve forgotten the actual numbers here. Going to have to go back to my website tonight to the archives, I gotta remember the date and find this. Maybe Koko can search for it real quick when he hears what I’m talking about here. I was playing golf with a guy who had just had a conversation with an energy expert and he was passing the story on, secondhand. I didn’t hear it from the horse’s mouth, but the numbers of people in the world who don’t have electricity would stun you. Who don’t have running water, stun you. Don’t drive, don’t have automobile, would stun you. It’s a vast, vast majority. If those people ever got — by the way, you people like flipping on the light switch at home. You like when the air-conditioner works? Where do you think that comes from? They won’t let us do nuke power, so it’s coal and it’s oil. I haven’t even scratched the surface of the oil industry here. I haven’t even begun to scratch the surface, the costs in finding it, drilling it, bringing it up, transporting it as crude across the oceans and pipelines and so forth.
I literally am amazed that somehow the truth and the facts of the oil business, economics of the oil business, escape people when the economics of most other things are never questioned. Well, I’m not totally mystified. You’ve got the Democrat Party and the Drive-By Media routinely telling people they’re being gouged, and you’ve got Democrats talk windfall profits taxes and so forth and so on. I’m blue in the face trying to describe to you how much every gallon you buy goes to your state, local, and federal government as total profit. Nobody ever complains and they’re talking about raising those taxes, by the way, in the midst of all this, yeah, because, you know what, as the price goes up, some people are buying fewer gallons of gas, and that’s less tax money. So the roads may not be repaired, bridges may not be prepared and so forth. So all these people out there wanting you driving these little windmill hybrids. I’ll tell you what, if everybody did that, and the consumption of gasoline went down big time, you think the taxes wouldn’t go up to make up the loss to the government? It would. This market is so complex, it’s like the climate, although it’s not nearly as complex as the climate, it is profoundly complex, and to try to control it and corner it is impossible.
RUSH: I have a little chart from the year 2001 from the Wall Street Journal. The source of this chart is Energy Intelligence Group. It’s a chart of oil companies by size of crude production. The largest oil company in the world: Saudi ARAMCO is the number one oil company in the world in 2001, producing 8.3 million barrels of oil a day. Next is the National Iranian Oil Company, NIOC, at 3.77 million barrels of crude a day. The third largest oil company is PEMEX, that’s Mexico, 3.56 million barrels, and they just announced a huge find in the in the Gulf of Mexico off of their shores. The fourth largest oil company by crude production — and this is going to be a small number now given what’s recently happened there — is Venezuela. The company is PDVSA, three million barrels of crude a day, but they’ve just nationalized a bunch of oil down there, they claim, so they’re going to be higher than that. Number five is ExxonMobil at 2.54 million barrels of crude a day. So you got Saudi Arabia at 8.3 million barrels a day. There’s ExxonMobil at 2.54. ExxonMobil’s market share of the world oil market is 3%. Don’t anybody call here again and tell me about Big Oil engaging in price fixing and controlling every bit of the oil from the ground to your tank as gasoline.
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