Who Really Owns Big Oil?

by Jim Olsztynski

Among the inhabitants of our goofy world are a few people who hang on to outlandish beliefs like the earth is flat, the moon landings were staged and complete strangers from Africa are anxious to share millions of ill-gotten dollars with them. Because there aren't many flat earthers and kindred spirits whose ideas stray so far beyond logic, they are more likely to be pitied than scorned.

More annoying are so many other people whose half-baked views are just as illogical but nonetheless end up in the mainstream of our economic and political conversations. These include all those folks who reflexively bash "Big Oil" as the cause of our energy and economic problems.

A study by the American Petroleum Institute finds that only 1.5% of shares in the big oil and gas companies were owned by board members and executives of those companies -- people typically portrayed by the bashers as the epitome of evil. The other 98.5% is owned by mutual funds, individual investors, asset management companies, pension funds, insurance companies, endowments, foundations, banks and other public institutions.

In other words, average citizens invested in various ways own 98.5% of the huge public oil and gas companies. This no doubt includes many of the same people who rail against the "greed merchants" from Big Oil, but who nonetheless fully expect those same executives to work hard at padding the bashers' retirement nest eggs. 

As we head into Thanksgiving week, I ask all of you to join me in giving thanks for oil company profits. That, much more than today's political rhetoric, offers a glimmer of hope of keeping our economy humming well into the future.

PVF Roundtable Spotlights
Global Energy Markets
The Oct. 30 semi-annual meeting of the PVF Roundtable in Houston featured guest speaker Richard Spears, a veteran oil and gas industry consultant who gave a mesmerizing presentation about the state of those energy supplies. Spears (left in photo), shown with with PVF Roundtable Secretary Don Caffee, made his PowerPoint presentation available at the PVF Roundtable's website . Pay special attention to the slide labeled "Global Oil Marketing ... Consumption + Extra Capacity." It vividly depicts how the gap has narrowed between supply and demand. The next meeting of the PVF Roundtable will take place Feb. 19, 2008. Featured speaker will be Dr. Barry Lawrence of Texas A& M University's Industrial Distribution program. E-mail Don Caffee with your interest in attending.

Tariffs Imposed On China Welded Pipe
The U.S. Commerce Dept. issued a preliminary finding on Nov. 6 that the Chinese government has been providing improper subsidies on circular welded steel pipe exports to the U.S., and will impose a tariff on most producers of 16.59%. That was the average rate of subsidy determined. The Department of Commerce also cited critical circumstances, determining that this duty could be applied retroactively by 90 days. The pipe imports subject to the petition against China have surged from 10,000 tons in 2002 to more than 750,000 tons in 2007 -- a 6,900% increase. The action came as a result of a trade suit, filed in parallel with the International Trade Commission and the Department of Commerce on June 7, 2007, brought by the Ad Hoc Coalition for Fair Pipe Imports From China and the United Steelworkers.  The Ad Hoc Coalition includes Allied Tube & Conduit, IPSCO Tubulars, Northwest Pipe Co., Sharon Tube Co., Western Tube & Conduit Corp., and Wheatland Tube Co.

Warren Alloy Opens FL Depot
Houston-based master distributor Warren Alloy has opened a 16,000 sq. ft. shipping depot in Lakeland, FL.   The facility includes indoor storage plus a pipe yard. Matt Patton, an 18-year PVF sales veteran, has joined Warren Alloy to manage the new Florida facility and to lead the outside sales effort in the Southeast market. The new facility complements other Warren Alloy operations in Houston, Charlotte and Cincinnati.

Outokumpu To Change Surcharge Method
In order to bring more stability in the stainless steel market and to reduce the effects of the raw material price volatility, Outokumpu has decided to change the calculation method for the alloy surcharge in its stainless steel pricing, starting in January 2008. The alloy surcharge reflects the changes in the prices of raw materials for stainless steel and is added on top of the so called base price resulting in transaction price, which is payable by the customer. Find out more here .

Grinnell Launches Design Service
Grinnell Mechanical Services has started Design to Build, a new design service to mechanical contractors in which Grinnell technical experts will work with customers to develop an honest assessment of the project, providing labor and material cost comparisons, as well a full virtual model of the piping systems – making sure the solution fits before the material is ordered, and identifies any potential interference or more efficient pipe routing opportunities.  To speed up delivery of the projects, GMS will work with a network of the best-in-class wholesalers to tag and ship the items directly to the job site. This reduces both handling costs and coordination time, and lets contractors move onto their next project sooner.  For those looking to do the work themselves, GMS can provide customers with a complete CD of Grinnell CAD block drawings, or on the phone technical support. Grinnell has released a full brochure about this offering on the literature section of www.grinnell.com, or it can be obtained at 1-866-500-4768.

Mueller To Close U.S. Pipe Plant In NJ
Mueller Water Products, Inc. announced that its U.S. Pipe and Foundry division intends to close its ductile iron pipe manufacturing operations in Burlington, NJ by February 2008. The Burlington facility will continue to be used as a full-service distribution center for customers in the Northeast. Discontinuing this manufacturing is part of U.S. Pipe's efforts to reconfigure its operations to remain competitive and increase margins. Production will be transferred from Burlington to other U.S. Pipe facilities.

Confab Slated On Plastics In Underground Pipes
The use of thermoplastic and thermoset materials in buried pipe is the subject of a new international conference being launched by Applied Market Information Ltd., a market research and consulting company serving the global chemicals and plastics industries. Plastics in Underground Pipes 2008 will take place at the Westin Galleria hotel in Houston May 22-23, 2008. 

It's A Dirty Job, But Someone Had To Do It
That's how my colleagues and I would explain this photo to our beloved spouses if any of you are so churlish as to snitch on us. It was taken at the Oct. 24 "Uberfest" theme party open  house celebration of Industrial Valco's new corporate headquarters and branch office in Rancho Dominguez, CA. Shown from left, flanked between a couple of lovely ladies who forced us to cuddle up close -- honest! -- are Supply House Times' Publisher Scott Franz, Associate Publisher Bob Miodonski, Editor Jim Olsztynski (yours truly) and Western Sales Manager Paul DeGrandis. Founded in 1947, Industrial Valco stocks one of the largest inventories of weld fittings, flanges and valves in North America. And they throw one heck of a bash.

A Chicago Tribune article last week probed the economic pressures facing China's manufacturers and subsequent corner cutting that is leading to substandard goods and health hazards from their products.

Watch For Your Economic Census Form

Chances are, your business will receive a 2007 Economic Census form from the U.S. Census Bureau in December. Forms go to all but the very smallest businesses in this tally done once every five years.

The forms ask for basic information like your location, employment, payroll, and sales by type of product or service. Businesses that receive a form are required by law (Title 13, U.S. Code) to respond.

Businesses, communities, and governments use Economic Census data for planning and market development. Statistics are published for more than a thousand industries as well as for states, counties, cities and metropolitan areas at business.census.gov.

Federal Reserve Board Chairman Ben Bernanke has called this census "indispensable to understanding America's economy." Please be sure to participate.