Not only that, oil companies apparently showed an apparent callousness to events that actually resulted in them making a profit. In October 1998, Marathon Oil's internal economic analysis cheered the disruptive and destructive Hurricane Georges ("Nature stepped in to lend a helping hand") and appeared to welcome OPEC's "efforts to rein in output" as helpful to their business, which of course is the same as OPEC's, selling oil. And in 1999, BP Amoco (now BP) actually had a "Midwest, Mid-Continent Strategy" to avoid putting more oil on the market than their profitability could take.
To which the American Petroleum Institute happily pleads guilty. "As long as the company or individuals act on their own, when they decide to put their supply on the market is their decision," president Red Cavaney told the Associated Press. "It's part of the free enterprise system."
Levin still has problems with the current state of said free enterprise system. The investigation "did not discover any evidence of collusion," he admitted, but that was only because none was necessary. Gasoline markets, he argued, are so "highly concentrated you don't need collusion to have a big artificial impact on supply" and therefore on prices.
Aside from the questionable use of the word "artificial" when it comes to companies selling their own products, Levin has a point — corporate names like BP-Amoco, ChevronTexaco and ExxonMobil demonstrate well enough the industry's recent wave of consolidation. But as Levin targets the brief but headline-making pump-price spikes of spring 2000 and summer 2001 and calls for antitrust action against the industry, he forgets how the got on this merger kick in the first place: the rock-bottom oil prices of 1999. Disappearing profits induced Exxon and Mobil to join forces in search of a vertically integrated economy-of-scale that could find, pump, refine and sell oil without going out business, and the rest of the industry soon followed suit.
Or that the cyclical nature of the energy business has just this quarter turned around and bitten the entire industry on the rump. With the suffering global economy keeping prices down all winter, first-quarter earnings season has hardly been a great one for BP (profits down 57 percent year-over-year), ChevronTexaco (down 70 percent), Conoco (down 84 percent) or ExxonMobil (down 58 percent). And the oft-quoted Marathon Oil? Net income in Q1 2002 was down 87 percent from 2001, due primarily to — as was the case for all of the above — reduced profit margins for refined crude products.
Still, it never hurts to be on record against Big Oil when George W. Bush and Dick Cheney are in charge, when very few Michigan voters have jobs in the industry to worry about, and especially when there's a nice long stretch of summer coming up — traditionally price-spike season — in which to campaign for the 2002 midterms.
Gasoline prices, while still historically low when inflation is accounted for, have risen in the past month, thanks mostly to Middle East tensions and some unseasonable Texas heat. But for Levin to get the summer-season spikes he can make an issue out of, he'll need the now-hesitant economic recovery — and the attendant increase in both business and consumer demand — to reach full swing in short order.
And it's a little harder for a politician to order an exhaustive investigation into that.