little people getting sucked dry

For many years I worked offshore on drilling rigs. I worked all over the world for 14 years. I loved that job and would go back tomorrow if I could. I loved traveling the world and someone else paying for it. now let’s dissect it a little, shall we?

The oil producers (ChevronTexaco, ExxonMobil,…) basically “rent” a rig to drill a well for them. They come to the drillers and say, “hey, I want to drill an oil or gas well here (point finger on a map). Can we rent your rig?” they sign a contract and the producer pays the driller a set rate per day. Out of that pay the driller furnishes the rig, all the rig’s personnel, and some supplies. Depending on the size of the rig the rate may be larger or smaller as well as where in the world it’s located.

Producers typically make a lot of money. They pay a lot for the rigs as well as the pipelines and production facilities to get the oil and gas out of the ground, to a refinery, and then ultimately to us, the consumers. When I was offshore I liked seeing high prices at the pump. It meant job security for me. I knew that as the producers made more money they’d pump more money back in to their e & p (exploration and production) budgets which hopefully would keep me working. It always did.

Now that I am home and not making that kind of money anymore I scrutinize the money they make. I can remember one gas well we drilled in Trinidad for bp. It cost a little over 9 mn to drill, case, complete, and tie back to the platform. It paid for itself in less than 12 hours. It was, at that time, the largest producing natural gas well in the world for bp. They were thrilled, obviously. Wells like that kept us working; huge money-makers.

Rates trickle down. As the producers pay the higher rates because of supply and demand, the suppliers jack up their rates. The rig owners bump up their rates and increase salaries to get the best people and win the best long term contracts. The suppliers who sell their wares and supplies to the rigs bump up their costs too. The producers, in order to make money, jack up the cost of oil and gas they sell to offset the increases in cost for drilling and producing a well. So our “at the pump” cost increases too. They make money.

Read an article today about a local insurance company jacking their rates for some cali people by 39% when they profited over 2 bn last qtr. Wow! Gas is one thing but healthcare is another. Everything in California is more expensive. Their salaries are also higher to help make up for that. But gee whiz, is healthcare that expensive out there? I take someone to the hospital in our ambulance and you’ll get a bill for about 4 – 600 bucks, depending on what I do to you (drugs, IV, nothing,…). It all depends. I smile each time I get an EOB (explanation of benefits) statement from our insurance company on how much the provider charged, how much the insurer would pay, and how much was written off. It’s a sham. At time the provider writes off 50% of the cost because it won’t be paid by the insurer. And yet they still want to charge more money for services.

Healthcare is one of those things that will always be needed for everyone. We’re not all bionic just yet so we’ll have to be taken care of. there will be a need for people like me who transport the sick and injured to the hospitals. There will be a need for doctors as they take care of those people and other sickies. But holy cow the rates have skyrocketed. Wife’s gonna have her gallbladder removed tomorrow and I shudder at what it’ll cost us out of pocket or even the insurance company. Her “cath” last year cost over 22k, excluding labs, x-rays, and other associated fees. WOW!

It’s hard to see companies and corporations profiting so largely in times like these. The economy sucks. People everywhere are out of work. There’s little overtime or extra money to be had. Money isn’t being spent as freely as it used to be even two years ago. I’m worried about paying taxes this year. Just trying to keep heads above water is a daily struggle for a lot of people. It’s tough with no end in sight for anyone.

So why do these companies continue to make such ghastly profits? Are they taking advantage of the consumer? Is it supply and demand? Is it greed? Probably all of the above. Part of it, like I said, comes from the trickle down effect that the big name corps pay their suppliers and vendors who jack their rates up. Sometimes it’s a wash and other times we, the consumer, gets taken to the cleaners. A lot of the time it’s just not fair. We try and work hard to get ahead and make things easier for ourselves and BAM! Something happens or we’re slapped with another fee or tax to take away what we worked for. My honest opinion? It’s bullshit, pure and simple.