Posted by Tina
When government takes a punishing stance…stuff happens!
Oil Companies Voting With Their Feet Investors Business Daily
** Another day, another oil company fleeing the country. No, this isn’t Ecuador, the banana republic that just defaulted on its debt after chasing out investors. It’s the United States, and what we’re seeing is self-defense. **
** What accounts for this vote of no confidence in the U.S.? Start with the demonization of oil companies. Executives have been hauled before Congressional star chambers, held up to abuse and ridicule, and then blamed for high oil prices as if they wanted to kill their markets. Rising global demand, nationalizations and Congress’ failure to open the country to drilling go ignored. *** Huge companies such as Exxon Mobil, whose market cap exceeds the GDP of most countries, create $100 billion in earnings in quarters when oil prices soar. It looks high, but over the years, the industry’s average returns, at 9%, are less than other industries. *** Nevertheless, Exxon’s profits are evidence of its success at extracting oil from miles below the earth’s surface, even underwater, and from unbelievably hostile environments, such as the Arctic. Instead of being objects of national pride for their productivity and efficiency, and subjects of heroic Hollywood movies, their success is considered to be dishonest. *** Congressional hostility affects oil companies’ operations abroad, too: Exxon, remember, noted that Congress’ animus toward oil profits directly encouraged Hugo Chavez’s uncompensated expropriations of $1 billion of Exxon’s assets in Venezuela, which drove oil prices higher. **