Peak Oil and the ‘08 Election

The headlines this month have been taken by the most insidious of America’s vices: black gold. Oil futures are now projected to exceed $100 a barrel until 2016, and continue to sit comfortably near the $115-120 a barrel mark. Many different causes have been blamed for rising prices at the pump, ranging from massive speculation to supply instability in some oil-producing nations. However, one factor must surely be worrisome to most every American: oil companies haven’t been getting enough of the stuff out of the ground.

Exxon Mobil’s $11 billion quarterly profit disappointed Wall Street and investors alike, their shares falling 4 percent on May 1st. The largest oil company in the US has seen stagnant margins in most quarters since 2005 without being able to increase production. In fact, their overall production fell 10 percent. Demand in the US has also contracted 2 percent since the beginning of the credit crunch last summer, so Exxon’s profits have been reaped in large part because of increasing price pressure on consumers, many of whom have looking to Congress for some relief. They may be looking for a while, as representatives have been less than forthcoming on bipartisan measures since they passed the economic stimulus package into law in February.

American Chronicle