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Ben Stein How Not to Ruin Your Life

A Well-Oiled Defense

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Excellent (1118 Ratings): 4.135958/5

Posted on Thursday, February 1, 2007, 12:00AM

I usually devote this space to columns on how to invest your time and money. But occasionally, I like to write about big economic issues that don't exactly fall within the realm of personal finance.

Please bear that in mind as you read the following thoughts. And remember that I'm a tiny stockholder of two oil companies. Tiny -- if my oil stocks quadrupled tomorrow, I couldn't buy a decent pre-owned Nissan with the proceeds.

I'm also not paid by the oil companies to write this, although I'll happily repeat it if someone gives money to the families of American men and women killed in the defense of this country in Iraq and Afghanistan.

An Unbidden Address

I read in the newspapers that the new Democratic Congress is going to hold hearings, call in oil company executives, and yell at them.

I've testified before congressional committees (the hardest part is waiting for a bathroom break), and I used to write a lot of speeches. And I'm totally in love with the oil companies because they power my great cars and cool my house in the desert and get me where I want to be.

So, completely unbidden, here's what I would say if I were the head of a giant oil company called to testify:

"Hello, honorable ladies and gentlemen. I am the chairman of Brigid Oil, a large, publicly held oil and gas producer, refiner, and distributor. I am here to talk a bit about our business.

"Perhaps the easiest way to get into this subject is by noting that a beautiful environmentalist woman, who shall remain nameless, recently compared other oil executives and me to the heads of the tobacco companies back in the days when those folks denied tobacco was addictive or a threat to health."

A Bare Necessity

"Nothing could be a more farfetched comparison, with all due respect to a conscientious woman like my critic. If the world suddenly lost all tobacco products tomorrow, we would have some very irritable people for a few weeks. After that, the world would work much better with less lung cancer, emphysema, and heart disease.

"If we lost all oil and gas products tomorrow, however, the world would simply collapse. There would be an immense depression beyond anything we saw in the 1930s -- the economy would go back to a primitive state. There would simply not be a functioning society. It would be as if there had been nuclear war, minus the casualties from blast and radiation.

"In a word, we cannot as a modern society or even a modestly industrial society live without oil and gas. That is, we do not supply a luxury or a narcotic. We supply a basic necessity of life, as basic as almost any commodity there is."

It's All for You

"Not only is oil a vital commodity, but it's supplied with extreme efficiency and without the slightest serious hint of price-fixing. We buy the raw material at a world market price, refine it, and sell it at a market price. This is not the days of the Rockefellers. No one is sitting in a smoke-filled room fixing the price at monopoly levels far above the cost of production.

"When market forces move our way, we make money. When market forces move against us, or when political forces move against us, we lose money or make less money.

"We at Brigid Oil and as an industry go to very considerable trouble and risk to bring oil to this country and to the world. We do our exploration and production in areas that are often dangerous in regards to climate and environment and politics and crime. Real people, real Americans who may be related to you and certainly live in your districts, put their lives on the line to bring you the oil you burn in your cars and your furnaces and your factories.

"We go to considerable economic risk to bring you oil. We need to -- and do -- invest vast amounts to explore for oil underwater and in hostile areas climatically and politically. When it works, we are paid for it, and when it doesn't -- when hostile political forces stymie us -- we lose money."

Free Speech for Everyone

"There is little doubt that burning as much carbon-based product as is burned has some effect on the environment. We do not object to people saying it. But we believe that there are perfectly intelligent, open-minded people who question how much effect this burning has, whether it is all bad, and what the smartest way to deal with the problem is.

"We note that while there is something like a scientific consensus on carbon burning causing global climate change, there was once a lot of opinion that we were heading toward a new ice age -- and this was only within the past 40 years or so. We would like to be allowed to express our views about the whole subject, just as the environmentalist is allowed to express her views.

"If curbs on carbon are to be the law of the land, and if they are discussed and debated and enacted after full thoughtful consideration, of course we will obey them. We are citizens and bound to obey the law. We would just like free speech for us, as there is free speech for our critics."

Join the Oil Business

"Two final points. Years ago, under the Clinton administration, we were given incentives to drill for oil and gas in very deep water in federally owned areas. Today, some say we were erroneously given more incentives than was originally intended. Specifically, such critics say that these incentives should have stopped if oil reached a certain price on world markets.

"We do not know if this was a mistake or not. We do know that it's the law, and we're following it as it was laid down to us. If some are now proposing that we be punished for obeying the law as the government dictated it, that is a Bill of Attainder pure and simple, and barred by the Constitution. We do not feel we have to give back money beyond what the law requires. Few taxpayers pay extra taxes, and we do not feel we have the right to do that with our stockholders' money.

"Finally, the oil business is a big business. For some of us, lately it has been a good business after many lean years. But we are not princes of heredity and blood. Anyone who wants to can go to work at an oil company. We have serious labor shortages and we welcome you.

"More important, anyone who wants can buy stock in us can be an oil company owner. This business is open to anyone. If you think we make obscene profits, buy our stock. You'll soon find that our profits are not only not obscene, but far from certain or predictable."

Saving Humanity One Barrel at a Time

"In conclusion, we sell a vital product within the law, at prices determined in the open market. We insist upon our rights of free speech and due process, and we welcome any of our critics to become our owners. And we ask you to consider what just one day without the stuff we sell would be like before you damn us for all eternity.

"We also ask that you ask yourselves whether it is us or our critics -- the oil companies or the Sierra Club (of which I am a member) -- that gets you where you need to go each day, powers your furnace when it's cold, and cools your apartment when it's hot.

"We all want a future that works, and together we can have it. Or we can just yell at each other and accomplish nothing. Thank you."

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177 Comments

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Wiseferret - Wednesday, February 21, 2007, 2:26PM ET Report Abuse
- Overall: 1/5
Was it 40million bonus to Exxon's CEO? or 400mill? Either way, THAT is obscene. THAT is profit not being reinvested (poor company planning and management), not going to stockholders and investors, and not going to the workers who actually get the product to market. As a stock holder, Big Oil is a SHORT term investment. And a poor gamble. My money goes to modest gains in a stable, well managed company that rewards its lowest people first. Mr. Stein, for such a well regarded financial voice, your article is utterly moronic and counter to common sense.
Yahoo! Finance User - Wednesday, February 21, 2007, 2:02PM ET Report Abuse
- Overall: 4/5
The oil companies are simply taking advantage of free trade and the free market(s). The same is said of cable companies, utilities, phone companies, etc. Having been an engineer in the oil field during the 80's I have seen fristhand the rule of supply and demand as we rushed to drill during the late 70's and early 80's. I have also seen the market laid to waste during the late 80's as oil costs fell tremendously and many of the world's rigs were placed in mothballs and then retired permanently. So we are now faced with rising demand due to China's growth and the cost is rising. And the culprit - blame it on the oil companies. Just another example of American Middle and Lower Class not understanding the basics of the free market. Whether it's oil, coffee, or oranges freezing our national past-time is complaining. If these folks would invest half their energy into studying and bettering their lives then the fluctuations in market goods would be minimized. Ah well, easier to complain than read and grow smarter. BTW, as to OPEC price fixing? We do not and cannot control the international cartels; oil, diamonds or even caviar.
Yahoo! Finance User - Wednesday, February 21, 2007, 1:30PM ET Report Abuse
- Overall: 1/5
I thought this article was sarcasm, but the punchline never came. What a bunch of rubbish. Several direct lies or deceptions jump right out. The truths are: Price fixing is a reality with OPEC. In 2006, Exxon-Mobile made the largest profits of any company in American history. There was no valid reason for it. Taxpayer funded incentives are insane. He makes the job sound so romantic and brave, but the executives don't risk their lives or perform the hard labor, yet take home much more pay than those who do. Buying stock is not going to give you a valid indication of the money to be made by the lobbyists, executives, and the already rich who can not just buy common stock, but can manipulate prices, laws, and market conditions. The oil industry has more free speech and say and control than all the citizens combined. They don't just lobby the government, they ARE the government, e.g. the President of the United States. That's why they are able to start wars with impunity and raise prices unchecked. I just started reading Ben Stein articles today and I will never read another one.
Yahoo! Finance User - Wednesday, February 21, 2007, 6:51AM ET Report Abuse
- Overall: 4/5
I think Ben is right. To the folks that think we went to war in Iraq for oil... where is this oil we went to steal? Oil is a supply and demand business. That is how OPEC controls the price, by cutting the supply. Now that China is modernizing, the demand has risen and caused the price to rise also. If we truly desire to stop using oil, then we need to find some viable alternatives, because like Ben said, the depression will look like good times if we stopped using all oil and oil byproducts today.
TIDO - Tuesday, February 20, 2007, 9:35PM ET Report Abuse
- Overall: 1/5
Nobody said oil was bad for us right now,but the oil companies like Exxon and the rest of them are why all these wars happen in the middle east,Proof ? Did we ever want to save an African country from a dictator ? Never ! since when are we so nice to spend almost a trillion dollars to free Iraqi's ? The truth is it is in the interest of the Bush family and frineds which is and has been for many decades in the OIL business ! Oil and war business have go together because most of the oil in the world isnt ours it belongs to the middle east and to get it we have to start wars or support wars or get involved in them ...like the Iran and Iraq war where US actually armed both sides ! or Iraq and Kuwait where we went in apparently kicked Ass and at the same time sold billions in war machines and made billions in oil revenue helping rebuild what was destroyed in the war !! deliberetly destroyed !! at the same time Bush administration empties the treasury by asking more money to fund the war and help equipe our soldiers ( another side business ) selling armor and feeding them , clothing them and on and so forth... can you see the pattern ? 3100 dead young children of ours aged 18-25 or more tens of thousands wounded ! for what? operation freedom Iraqi ? sure !!!! we have killed or caused the death of over 660,000 Iraqis !! we have tortured and raped and killed their daughters women and children ....is this Iraqi freedom or this is stealing Iraqi oil ? who is benefiting ? not Us citizens I'll tell you that ...we paid taxes , our treasury is all gone ...all the surpluses we had is gone Iraq's oil is gone our 3100 children are gone iraqs 660.000 mostly civilians are dead millions injured ...tens of tousands of our children injured severly and paralized ....
Yahoo! Finance User - Tuesday, February 20, 2007, 9:21PM ET Report Abuse
- Overall: 3/5
Stein is way off. If the price of oil/barrel goes up, the companies are split-second quick to raise our cost, yet when it goes down, our cost trickle downward SL-O-W-L-Y. They've made record profits the past year, all at our expense.
Yahoo! Finance User - Tuesday, February 20, 2007, 5:18PM ET Report Abuse
- Overall: 5/5
Excellent article; Ben tells it like it is, not like so many wish it would be! Unlike Ben, I dumped my long-time membership in the Sierra Club several years ago because I felt they went overboard in their support of the "banana" position: Build Absolutely Nothing Anywhere Near Anyone!
Nick C - Tuesday, February 20, 2007, 9:06AM ET Report Abuse
- Overall: 2/5
I don't understand how you can write a national article about defending big oil and still call yourself a sierra club member. Go see the documentary "Who Killed the Electric Car".
Yahoo! Finance User - Monday, February 19, 2007, 12:04PM ET Report Abuse
- Overall: 1/5
Unfortunately, this article was written by an executive at Brigid Oil and not Ben Stein. How is there not a serious hint of price-fixing? I have one word for you, OPEC. OPEC can be seen as a legal cartel. The supply of crude oil is artificially restricted to keep the cost per barrel at a certain level. OPEC still has considerable impact on the price of oil even though it ability to control the price of oil has diminished since its heyday when it was able to trigger high inflation across both the developing and developed worlds through its use of the oil weapon in the 1973 oil crisis. Stick to writing about financal issues and not this crap.
Yahoo! Finance User - Sunday, February 18, 2007, 5:23PM ET Report Abuse
- Overall: 5/5
Excellent article by Ben
Yahoo! Finance User - Sunday, February 18, 2007, 6:20AM ET Report Abuse
- Overall: 1/5
Ben should stick to finance.
Nate - Friday, February 16, 2007, 5:24PM ET Report Abuse
- Overall: 5/5
A Good response to the average American regarding oil.
LisaM - Friday, February 16, 2007, 3:43PM ET Report Abuse
- Overall: 3/5
I don't completely agree, because the American public needs to cut its addiction to oil. I'd like to see gas cost $6 to $8 per gallon at the pump. To be honest, that's a mostly emotional desire, because I thought that Gulf War 1.0 was fought over oil, and that the current mess in Iraq is ultimately about cheap oil. As a veteran of that first war, I resent so-called patriotic Americans who showed their thanks by purchasing and driving gas-guzzling SUV's. If it wasn't both illegal and immoral, I'd be happily and ironically tossing Molotov cocktails at every SUV I saw. Instead I simply hope for higher gas prices and grin when I see or hear someone carping about how much it cost to fill their gas hog. As contradictory as I know it to be, I also own stock in an oil company (Marathon Oil), and appreciate the dividends they pay me every quarter. There's another reason for me to hope for higher prices at the pump--then I'm not just revelling in some pseudopatriot's misery, but taking some of his or her money besides. There's simply no excuse for the gratuitous overconsumption of gasoline and oil in this country, and it's high time Americans grew up and faced that fact. It's also high time they stopped sending good soldiers off to shed their blood for that oil.
John - Tuesday, February 13, 2007, 4:28PM ET Report Abuse
- Overall: 5/5
This is an incredibly on-the-mark op-ed piece from Ben. The overwhelming majority of American's have very little idea what it takes to power their cars and warm their homes. Consider that the gasoline you just burned running to buy groceries for your family may have initially come from an oil well located 3,000 miles away, 10,000 feet below the bottom of the Atlantic ocean, in 5,000 feet of water. The crude was brought to the surface by a $1 billion floating oil platform, transported on a $200 million oil tanker, and processed into gasoline in a refinery with a replacement value in excess of $5 billion. Now think about the value that this commodity provides you at $2.50 per gallon, compared to a bottled water ($7.50 per gallon) or latte ($20 per gallon), neither of which will power your 5,000 pound vehicle. Pretty amazing when you actually think about the whole well-to-wheels process.
Avvi - Tuesday, February 13, 2007, 12:17PM ET Report Abuse
- Overall: 5/5
Brilliant article. You have it right. Solutions that make sense rather then attempting to bring us back to the stone age would be incredible to see.
SteveP - Tuesday, February 13, 2007, 2:47AM ET Report Abuse
- Overall: 5/5
We should put windfall tax on these companies and cut incentives for oil drilling... but uh... never mind. If we do that, that means we have to ask Canada, Mexico, Saudi, Venezuela to pump more oil. Besides, how come virtually no politician became outrageous when Google multiplied their profits? Oh that's right, it's easy to blame it on Exxon.
Fred - Monday, February 12, 2007, 2:58PM ET Report Abuse
- Overall: 5/5
I always have liked Ben Stein for his ability to sift through the BS & define the truth in a very clear & articulate way. This article accomplishes that. Very warm regards to Ben Stein. Yes I am a small part of the oil business & doing very well thank you. But there are always cycles & this is sure to change eventually.
mt - Sunday, February 11, 2007, 11:59PM ET Report Abuse
- Overall: 3/5
I agree. As in many other subjects, people tend to use their emotions rather than facts to judge.
David - Sunday, February 11, 2007, 10:45PM ET Report Abuse
- Overall: 5/5
WORKED IN THE OILFIELD FOR 30 YRS. ROUGHNECK TO CO MAN TO MGMT. THE AVG AMERICAN HAS NO IDEA WHAT IT TAKES TO PRODUCE OIL AND GAS IN THE USA.
MJ - Sunday, February 11, 2007, 3:51PM ET Report Abuse
- Overall: 5/5
Couldn't have said it better myself.
TimothyC - Sunday, February 11, 2007, 8:21AM ET Report Abuse
- Overall: 5/5
Thank you for being the one public figure brave enough to say what needed to be said. When oil becomes scarce enough to cause the price to be higher than alternatives, consumer will make the switch. That's the invisible hand at work.The government needs to stay out of it.
Stuart - Saturday, February 10, 2007, 10:46PM ET Report Abuse
- Overall: 5/5
Ben Stein has spoken truthfully again. We in the oil and gas business (and I work for an independent, without the refining and marketing) put our companies on the line for risky prospects every day. Nothing is guaranteed, and no one raised a hue and a cry when we were laying off thousands of employees in the bad times. The so-called "honorable" members of Congress should be ashamed of themselves.
Yahoo! Finance User - Saturday, February 10, 2007, 5:27PM ET Report Abuse
- Overall: 1/5
Interesting. No mention of monopolistic consolidation of refining capacity, leading to higher prices and obscene profits. Also manipulation of supply .
bscoms - Saturday, February 10, 2007, 4:54PM ET Report Abuse
- Overall: 5/5
I enjoyed the article, even rated it 5 stars. I would offer this information to Ben Stein, however, so that he sees that we could "pull the plug" on Oil, and survive. We need to plug into the efforts found in the following 4 companies/sectors: 1. Build out Nuclear and Renewable energy to the greatest extent. 2. Make Phoenix Motorcars the next Ford. 3. UQM Technologies - they build the motors. 4. Altair Nanotechnologies - they make the batteries. It's this simple. It's in front of our face. It's all available now. We could rid ourselves of Oil within the next 5 years. BS
Yahoo! Finance User - Saturday, February 10, 2007, 11:12AM ET Report Abuse
- Overall: 5/5
Wow...the reason is clear...BEN STEIN IS A GENIUS! I am finally glad to see someone stand up to all the environmentalists. Now, before everyone gets the idea that I'm some oil executive or something, I want to say that I am a true environmentalist. I don't drive an SUV or fly in private jets by myself and needlessly burn fossil fuels so it's "convenient" that I get to my next soap box to moan and complain. Stein brings up a great point. Tobacco if it disappeared would be painful for a few months (or years if you include lack of tax money for all the gov'ts which depend on it) but if oil were gone, we would freeze. If people are willing to abandon the Northern Hemisphere and all move to the Amazon jungle, then I say let's ban the oil business. If it's not obvious by now, this is a stupid and dumb idea to expect us to move from the Northern Hemisphere. Here's my solution. Let's get the Feds to put extremely huge incentives on energy conservation (10K to install modern insulation, 10K for buying cars with 30MPG , modern HVAC systems, etc). I don't have the numbers by my desk but I bet this would really drop the amount of energy we would need and not only that it probably would give all our skilled trades jobs for the next 10 years non-stop. Wow, who would have thought that we could solve the "jobs" and "energy" crisis with one policy? Hmm... Kudos to Ben Stein for being a rational in a sea of stupidity
Warmcamp - Saturday, February 10, 2007, 9:27AM ET Report Abuse
- Overall: 5/5
Honest words written by honest man. People may have different views and attractions but there is only one truth for everyone.
RichardC - Saturday, February 10, 2007, 9:08AM ET Report Abuse
- Overall: 5/5
All this talk about cutting greenhouse gasses to stop global warming is empty rhetoric. It can't be stopped. It won't be stopped. You can't put the geenie back in the bottle. Even cutting emissions in half by 2050 as proposed (would it even be possible) is too little too late. We should be expending all this time and energy preparing to deal with the consequences -- which I expect will be less dire than those alarmist forecasts -- than to try to return our society to pre-industrial revolution days. You've soon got 2 billion people in Asia who are emerging out of those days right now. Try telling THEM to stop and see what kind of reaction you'll get.
Yahoo! Finance User - Saturday, February 10, 2007, 7:00AM ET Report Abuse
- Overall: 5/5
Excellent read. In reading the posted comments I must admit I love the uber liberal mind set of what defines free speech. If it jives with their rants it is acceptable. If it does not then it must be censored. All this talk about the coming global warming based catoclysm is not based on any rational thought process. It is all based on junk science marketing and emotion. I think the real basis for it lies with money. To be clear it revolves around them separating you from your money so they can have it. Let us look at the tobacco company settelments as an example. They advertised it to joe public as a crusade against big tobacco companies hurting the health of innocent americans. It was suppose to stop people from smoking. But in reality it just extorted a whole bunch of money from a private business into government coffers. The irony of it all lies in the FACT that the money wont keep flowing into the government coffers unless people keep smoking because it relies on future sales of the product to keep the imposed tax / fine money flowing. I think it is exactly the extortion model that the coming global warming taxes will based upon. Taxes on carbon emmisions that rely upon burning fossil fuels. If the burning stops so does the flow of their tax money. They have a vested interest in keeping their source for money flowing. Which is the burning of fossil fuels. Its all about the money and nothing really about the enviroment. bottom line is if you dont like smoking dont smoke. And if you think the world is in danger from the burning of fossil fuels then dont burn them .....but please dont force your madness upon me.
William - Friday, February 9, 2007, 7:24PM ET Report Abuse
- Overall: 3/5
True that oil is a necessity and comparing these guys to the tobacco people is ludicrous, but at the same time questioning the harmful effects of carbon emissions on the environment is kind of like denying evolution at this point. There is a scientific consensus. Whether human impact is guaranteed to warm the earth to the extent certain scientists have argued is open to debate. But mankind is not treating mother earth too well. (Full disclosure: I do not own big oil stocks, but I own shares of DO, call me a hypocrite). Oil companies, like Exxon Mobil, do not need to bribe scientists- which they have done in order to spread misinformation to max out their profits, which are astronomical as they are. These companies are essential, and they will probably always pollute, but they should adhere to a realistic vision of the future of the environment and try to make a difference. They could be the leaders in cleaner energy solutions, but instead they would rather spend millions to deceive people and counter the dominant scientific theories. Ultimately, corporations have a responsibility to their shareholders, but mankind also has a responsibility to the environment. I don't want my grandkids to live in a polluted world with flooded coastlines, I dont know about you.
Kate - Thursday, February 8, 2007, 3:04PM ET Report Abuse
- Overall: 2/5
If Ben wants a future that works, then he might want to discuss how much our future wonât work if our planet won't work because we arenât working together as individuals, businesses, and government to reduce our greenhouse gas emissions. I sort of see the point of this article but it skims over the real looming issue we are all facing â abrupt climate change (the science on this is excellent, do some research). This article and most people's comments seem to be missing this point. Itâs time to wake up to the fact that we are going to have to rely less on oil for many reasons (including the fact that it isn't renewable in the absence of global warming) and have to do some things differently starting now and into our future when it comes to oil. Obviously oil companies have the right to defend their profits (good or bad) and their right to conduct business legally. Why wouldnât they? But realistically, lowering greenhouse gas emissions undoubtedly means less reliance on oil which I agree is central to our wonderful lifestyles. The good thing is that we can still have a wonderful lifestyle, we'll just need to release less carbon dioxide and methane in the process.

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