Big Oil Wins; U.S. Auto Maker Loses

Exxon reported second quarter profits of $11.5 billion, while General Motor Corportation reported a $15 billion loss during the same period. It's an all-time hight profit for a single quarter. GM's loss is its third largest for a single quarter and includes $3 billion in employee contract buyouts.

Initial analysis of what the big oil companies do when they record such high profits (Shell Oil reported over $11 billion in profit, as well) is to reinvest in their company. They just buy their own stock and watch it go up. Meanwhile, we hear from the big oil PR people about how invested the companies are in research for alternative fuels and leaving less of a carbon footprint. I'm not buying it. Whatever they're investing in such research is, quite literally, a drop out of every barrell.

Anybody who knows anything about the subject can tell you the U.S. has had a deflated price on gasoline for years. It was bound to catch up to the world market price, but most people didn't expect it to happen so fast. It's still not as expensive as it is in Europe.

So, with full knowledge of this, the U.S. auto makers went on a collision course of economic destiny by pursuing the marketing and sale of big trucks and sport utility vehicles.

There is no conspiracy, but the big oil companies didn't do the auto makers who pursued this philosophy any favors, either. The big loser is the consumer, of course. Americans are suckers for a big, comfortable, safe and reliable vehicle.

The price of gasoline is tapering a little bit, but it's not going to fall as rapidly as it rose and it won't decrease by the same degree, either.

If you think about it, there was no other way for this to play out. Just when consumers were beginning to realize the impracticality of the big vehicles, the price of light sweet crude became the speculative game of the week for Wall Street and everyone driving those big large vehicles was saddled with the exhorbitant cost of gasoline.

The situation was predicted by many of us back when the trend to larger and less fuel-efficient vehicles became popular. It wasn't a difficult assumption to make.

The realization of it has come hard to some people, however. Now we've got people calling for more oil wells in this country and the Arctic. The Russians are making a military presence felt in the region to establish territorial rights to the largest untapped oil fields left on the planet.

Many people may not realize this scenario has been written about by several authors who foresaw the struggle to control oil production as the root system for the next global military confrontation: WW III. Doesn't sound too far-fetched with the Russian navy establishing a military presence in the Arctic Circle. Not to my mind, anyway.

It may be a long way off. It may happen next week. It may never happen, but it's certainly a plausible course of events. If you don't believe me, research it on your own.

The best thing for everyone in this country to do right now, is to work on conserving. If we work at it, we'll save some money for ourselves. The Wall Street fat cats aren't going to donate any of their profits for subsidization of our fuel bills.

Try to car pool. Try to combine trips out in the car. Walk. Use public transportation.