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Big Oil’s Stolen 35 Minutes

July 26, 2012


By Ronald H. Miller, Managing Director and co-founder of Prisma Advisors, LLC, a management advisory firm specializing in advanced biofuels. Mr. Miller has over four decades of energy experience, including CEO of a Fortune 1000 producer of biofuels and food products from agriculture. A recent article entitled "Clean Green Scam" highlighted the case of Rodney Hailey whose company sold approximately $9 million worth of fraudulent biodiesel credits to the oil industry.  Petroleum companies need those credits to show compliance with the national Renewable Fuels Standard.  Mr. Hailey was convicted of 42 counts of fraud, money laundering and other charges and will likely spend several  years as a guest of the federal government.  Justice was served, right?  Not so, stated the article.  What about the innocent victims, in other words "Big Oil"? The focus of the article was on "Washington's torrid 40-year love affair with the ethanol lobby".  The "victims" not only paid $9 million for bad biodiesel (not ethanol) credits but also were fined by the EPA for not conducting proper due diligence to make sure the credits were legit.  This cost Big Oil another $40 million.  In fact the article went on to say, "Refiners have been ripped off to the tune of $200 million so far by crooks and government fines..." due to the Renewable Fuels Standard.  Wow, that is a big number - unless of course you put it into context. In 2011 the Big Five oil companies (ExxonMobil, BP, Chevron, Shell and ConocoPhillips) made $139 billion in net profit.  That is equal to $375 million per day or $261,000 per minute.  These five companies also received $6.6 million per day in federal tax breaks.  So let's reexamine the facts as to the victims' pain with biofuels.  First of all, the actual scam cost 35 minutes of Big Five profit.  The total cost of crooks and fines over the past 7 years of the program is equal to about 13 hours of profit.  But I wouldn't worry too much about their pain and suffering.  Federal tax breaks restored the "rip off" in about one month. Why expend all this effort to gain media time for a relatively small amount?  The real rip off is the $1.09 per gallon saved last year by American consumers because of the Renewable Fuels Standard.  That's $140 billion that went to consumers and not Big Oil - equal to the total net profit of the Big Five.  Now that's a big number and certainly worth fighting for.  This isn't about the stolen 35 minutes from biodiesel.  It's about a year's worth of profits being shifted from Big Oil to the American consumer due to increased competition from renewable fuels.  It's all about spending whatever money it takes to reverse the rip off and restore order to the 150 year old fossil fuel status quo. When you see more articles like the "Clean Green Scam", and you will, just remember to "Follow the Money" to see where the real scam lies.