Texas Railroad Commission Chairman Michael Williams Defends Exxon

Interesting what people write when they get a blog. The Texas Railroad Commissioner Chair uses some funny math to defend Exxon and the high profits the companies he regulates makes. The Railroad Commission was originally established to represent the consumers, not those it regulates.

In his latest post Williams writes:

From 2000 to 2007 the average crude oil price was about $39 per barrel and the crude oil cost share of the retail gasoline price averaged 48%. In comparison, in 2007, the average price for crude increased to $68 per barrel and accounted for about 58% of the national average cost for a gallon of regular gasoline. So far in 2008, the price of crude has increased further to an approximate average of $99 and accounts for about 72% of the national average price for a fill-up on regular gasoline. Which means the Saudi royal family, Chavez and others are making money hand over fist as the recipients of the lion’s share of what we pay at the pump.

The ratios for the other components have dropped or remained stable, as the share of crude oil has ballooned. The percentage shares for:
• Federal and state gasoline taxes dropped from 32% in 2000 to 12% in 2008;
• Distribution and marketing costs and profits slid from a high of 13% in 2000 to about 8% today; and
• Refining costs and profits have remained at about 8% from 2000 through 2008.

Let me break this down -

1) he states the obvious - those who own the oil are making lots of money,
2) he seems to feel that taxes on oil should have gone up,
3) because of the higher price for oil, distributors were able to raise their profits but they get a lower share of the final price,
4) and finally, refiners have raised their costs and profits at the same rate as the price of oil has gone up.

Unasked by the oil companies friend - If the distributors were able to increase profits but at a lower rate than the price has gone up, why didn't the refiners do the same?

Is he trying to justify a raise in the state gasoline taxes? Why else point out the taxes have gone down to 12% on a gallon of gas from 32%?

The Railroad Commission under Williams has become known for passing questionable costs on to consumers, not stopping pollution caused from injecting into the ground the saltwater brines created by oil and gas drilling, allowing urban drilling for gas in the Fort Worth area, and being slow to require natural gas companies to replace faulty pipe couplings which cause explosions. All of this while members are running for reelection with donations from the people and companies in the oil and gas business that they are supposed to regulate.

Just more crony capitalism and phony regulating from a party that can't govern. Keep an eye on the Blue Daze blog where TXsharon tries to keep up with TRRC abuses.

ADDED - refinish69 has a more colorful post calling Michael Williams an idiot.

UPDATE 2: This was a Houston Chronicle opinion page link and McBlogger opines more about Exxon and related company profits.

Tags: Texas, Railroad Commission,, gasoline, oil, regulation