Monday, August 11, 2008

Why Big Oil loves Obama

Anybody who is unfortunate enough to be on an RNC email list knows that employees of the Biggest of the Big Oil Companies have given more money to Obama than to McCain. (Never mind that the companies themselves cannot give money to any candidate, contra Obama's tv ad.) Indeed, the oil industry as a whole is notably more supportive of McCain, but those connected to Exxon, Chevron, and BP gave more to Obama.

But people who care to know this sort of thing already know it, so I'm not breaking any news here. The important question is "why?"

Why in the name of all that is holy would Big Oil donate to Obama?

My theory is that the very biggest of the big oil companies want higher-priced oil and they know Obama's policies will bring it. They have massive reserves, but Exxon in particular has been reluctant to do more exploration. The easiest way for such a company to make more money is for the price of oil to magically levitate.

Who is donating to McCain? Among them, those connected to Koch Industries, Valero, Marathon, Hess, ConocoPhillips, and Occidental. What's different about this grouping? Valero, Marathon, and Hess in particular have significant refining businesses that use oil as an input. Koch too is involved in several industries that use oil as an input. These companies suffer if oil is extremely expensive.

Those who benefit from expensive oil and restricted exploration donate to Obama. Those who benefit from less-than-stratospheric oil and those who want to do more exploration donate to McCain.

2 comments:

Samay said...

This is employee donations, not executive donations or PAC donations (which are basically corporate donations, through a loophole).

I think Obama's getting a lot of support from lower-ranking workers who have a lot more to gain from universal health care and an end to the Iraq occupation than they do from their corporation making even more money.

Exxon and BP and Chevron aren't going away if Obama becomes president, they might make less profit, but most of that profit's not going to the rank-and-file anyway.

Sockless Joe said...

Yeah, there are certainly more dimensions to it than what I said, but I think there's something self-interested there too. A lot of those employees are probably shareholders too. I would also imagine that those workers would still think twice about "windfall" taxes on their employers just based on the concept that shit flows downhill.

There are several ways Obama would benefit those people. Universal health would be good for many businesses (aside from whether this is good health policy), less military action may mean those companies can do more business abroad.

The question I am trying to answer stems from several facts. -1- Nobody is surprised by oil-related donations to a Repub candidate but here we have significant bifurcation, and -2- That bifurcation seems to appear along an identifiable differential of interests.

In addition to what you said, there could also be a tacit acknowledgment that Obama is favored to win and they are hedging their bets.