Big Oil on the Grill

Because I'll likely never come to grips with the lack of understanding in the Congress of the nation's -- no, make that the world's -- darkening energy picture, what follows will be tied to economics, certainly not to politics. Beyond that, however, news of a grilling of big oil executives is important to Foolish investors simply because it brings out a lack of understanding of a subject that's vital to all phases of our existence in the 21st century.

Earlier this week, the House Select Committee on Energy Independence and Global Warming questioned executives from ExxonMobil (NYSE: XOM  ) , Royal Dutch Shell (NYSE: RDS-A  ) (NYSE: RDS-B  ) , BP (NYSE: BP  ) , Chevron (NYSE: CVX  ) , and ConocoPhillips (NYSE: COP  ) . The session apparently was held partially to spank the companies for racking up sizable profits of late and partially to extract promises of increased investments in alternative energy.

Fine, but why whip this group, when the companies clearly don't set oil (and, consequently, gasoline and diesel) prices? At the same time, Exxon alone is giving $100 million to Stanford University's climate and energy project. And all the companies are, in fact, spending big bucks on research. For its part, BP expects to spend about $30 billion on research in just the next five years.

But beyond that, "Big Oil" is far more than a hugely selfish entity whose only goal is to fill its coffers at everyone else's expense. Indeed, an American Petroleum Institute-commissioned study revealed that 43% of the industry's shares are held by mutual funds. Conversely, in the biggest companies, only about 0.5% of the shares are owned by insiders.

So in a very real sense, going after the oil companies on the basis of only a handful of knowledge ultimately translates to attacking Fools and other small investors. Nevertheless, look for the sniping to escalate in the years ahead as energy prices continue their ascent.

All this should lead to a very important conclusion for Foolish investors: Energy companies are becoming progressively more vital to the maintenance of our modern lifestyle. That very fact renders them crucial for inclusion in virtually any portfolio. My feeling is that companies like those mentioned above, along with perhaps oilfield services provider Schlumberger and perhaps driller king Transocean (NYSE: RIG  ) , can constitute a fine start on your holdings in this progressively more important sector.

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