I'm often asked this question: How did Big Oil conspire to get its big profits? The idea that a company like Exxon Mobil could earn $11.7 billion in a single quarter boggles the mind, even if you know what a far-flung empire it is.

Two years ago the online magazine Slate (a sister Washington Post publication) published a Michael Kinsley piece about taxing oil companies that touched on the subject. Kinsley noted that oil wells that could be profitably operated at $46 a barrel (the price a year before his column) could be even more profitably operated at $70 a barrel. Kinsley wrote:

To get this windfall, the oil companies didn't have to conspire with the Bush administration to start a war in Iraq. They didn't have to conspire among themselves to raise prices at the pump. If you own oil anywhere in the world, you didn't have to do a damned thing. Just close your eyes, make a wish, open them, and - surprise - you're getting an extra $25 a barrel.

Continue »

There are some people who would claim that President Bush's announcement about lifting a presidential ban on drilling in offshore areas currently off limits has had something to do with the recent drop in oil prices. The other night, a friend asked me if this was true.

The short answer is: no.

Continue »

It seems every candidate has his favorite energy subsidy. Or two.

Sen. Barack Obama (D-Ill.) has favored setting a minimum goal of 60 billion gallons for ethanol of all kinds, derived from corn and cellulosic materials such as grasses or wood chips. That's twice the current target for an industry which has thrived largely because of federal mandates and subsidies for refiners that blend ethanol into motor fuel.

Sen. John McCain (R-Ariz.) has opposed subsidies for ethanol. And last Tuesday he attacked Obama for voting for the 2005 energy bill (widely supported by Republicans) because, McCain said, it had subsidies for big oil and gas companies.

Continue »

Steven Mufson is on vacation this week, but Post colleague Juliet Eilperin asked us to link to her article on cars, which she wrote as a rebuttal to this Outlook piece by Terry Box last weekend.

Steve will return to blogging next week.

Commentators have been quick to point out that Russia's defeat of Georgia has pretty much killed the chances that new oil and gas pipelines will be built to increase the security of supplies to Europe. It's clear that there is little to stop Russia from rolling its forces up to the existing pipeline or knocking it out of commission if it wanted to. The Washington Post's Steve Pearlstein even suggested that demonstrating the pipeline's vulnerability may have been one of the underlying motives for the Russian incursion.

Continue »

Hoping for some insight about oil prices, I attended a meeting on Thursday at the New America Foundation where Richard Vague, who was the founder and former chief executive of credit card firm First USA, was talking about oil prices. He is also co-founder and chief executive of Energy Plus, a firm supplies electricity to homes in New York. I trust he was more astute about credit cards than he was about oil prices.

Continue »

One of the people who will parade across the platform Tuesday night for a four-minute speech will be Nancy Floyd, founder and managing director of Nth Power, a San Francisco venture capital firm specializing in energy technology and materials. The firm has $420 million under management with investments in companies involved in light-emitting diode bulbs, hydrogen-based generators, photovoltaic panels, microturbines, biodiesel, and the sale of voluntary carbon offsets, among others. She said that nationwide about $3 billion a year of venture capital, about 14 percent of total U.S. venture capital, is going into energy.

Continue »

Energy Wire talked to Gov. Sarah Palin in May about her views on Big Oil, offshore drilling and a long-awaited, expensive and controversial natural gas pipeline for which she has been pushing hard. With McCain's announcement Friday, suddenly her comments seem a lot more interesting.

Many environmental and Democratic activists attacked her yesterday for being too close to Big Oil. They dislike her support for drilling in environmentally sensitive areas, her skepticism about alternative energy sources, and her opposition to listing polar bears as an endangered species. "Sarah Palin reinforces John McCain's plan to continue the Bush-Cheney big oil energy policies," said Daniel J. Weiss, senior fellow at the Center for American Progress. "Palin may be new, but her big oil energy agenda is very old-fashioned."

However, back in May Palin portrayed herself as standing up to the biggest oil companies in discussions over a new $30 billion natural gas pipeline, talks that have drawn out over many years. (When I talked to her then, she already knew that McCain was considering her for the vice presidential spot on the Republican ticket.)

Continue »