The archetypal character of the oil baron is nearly always characterized by some combination of greed, callousness, and a raging ego.
In this segment from Industry Focus: Energy, Motley Fool analysts Sean O'Reilly and Taylor Muckerman look at five reasons -- from a long-established history to macro-economic trends today -- why we love stories about cut-and-dried terrible oil barons.
A full transcript follows the video.
This podcast was recorded on Aug. 4, 2016.
Sean O'Reilly: So, why do you think we hate oil barons? This is a constant theme.
Taylor Muckerman: Yeah. I guess, everybody hates them except for The Beverly Hillbillies. They were probably the one oil family that wasn't evil.
O'Reilly: Oh my gosh, how could I forget?
Muckerman: Because they weren't evil, they were just...
Muckerman: It was just dumb luck. Shooting possums out there.
O'Reilly: [laughs] In Beverly Hills!
Muckerman: Striking oil.
O'Reilly: What do they do? They hit oil, then they get in the crappy car and drive to California?
Muckerman: Yeah, they make it big. Can't forget your roots, Sean.
O'Reilly: No, you can't.
Muckerman: I don't know why they think all oilmen are evil. Maybe because a lot of it has been dumb luck, and these people just become instantly rich who weren't necessarily business-minded. They just found oil and turned it into gold, essentially.
O'Reilly: I also think, because, you remember a couple years ago, when gas prices were going up and giving $4 a high five, everybody was grumbling. The bottom line is, we need oil/gasoline to run our civilization right now, and whenever it goes up in price, people are like, "Oh, those evil oilmen, they're sticking it to us."
Muckerman: That might be why, yeah.
O'Reilly: Because it's so essential, that's basically what I'm saying.
Muckerman: Yeah. Especially back in the day, more energy, more power came from oil. Now, you have to go to developing countries to look at oil as an energy source. But, clearly, people need it to drive and get around, in the United States especially.
O'Reilly: Yeah. Completely a side note, but I wanted to mention this to you because we're here and it popped into my mind -- I just flew to Indianapolis International Airport; that's where I was last week. And there's always tons of land that's unused around airports, and it was completely filled with solar panels now. It was awesome.
Muckerman: Were they for the airport?
O'Reilly: Yes. I can't begin to tell you how many stinking solar panels there were. It was...
Muckerman: Did you happen to see a sign of who put them there?
O'Reilly: No. I probably should have -- was it SunPower, or... I'll do market research next time I'm in Indiana. I have another theory that I wanted to share with our listeners. I think it goes all the way back to your friend and mine, John D. Rockefeller.
Muckerman: Would there be an oil industry in America without him?
O'Reilly: No, because at its peak, Standard Oil controlled, like, 92% of the market here in the U.S. No one has ever come close.
Muckerman: ExxonMobil (NYSE:XOM) is --
O'Reilly: It is a fraction of what was once Standard Oil. And ExxonMobil is a $360 --
Muckerman: But wasn't it spun out of -- well, not Exxon and --
O'Reilly: Yeah. Exxon was Standard Oil of New Jersey. Mobil was Standard Oil of -- I'm butchering this and I'm sorry -- Louisiana or something.
Muckerman: Some other state, yeah.
O'Reilly: And they eventually merged. BP (NYSE:BP) bought what was once Standard Oil of Ohio.
Muckerman: You know you're a monopoly when you have to get broken up by state.
O'Reilly: Yeah. You had Teddy Roosevelt in there doing his trust busting. Rockefeller was the poster child for this. You had Ida Tarbell writing History of the Standard Oil Corporation [Company], which, of course, contributed to the case for breaking it up and antitrust legislation. Fun fact our listeners may not be aware of: Ida Tarbell's dad was put out of business by Rockefeller back in the day, and that is why she hated --
Muckerman: It was a little bit of revenge, huh?
O'Reilly: Yeah. He had a refinery and he just got run into the ground by Rockefeller.
Muckerman: Interesting. The power of the word.
O'Reilly: So, you have that. What did you say to me when we were brainstorming? You were like, "Oil execs are not doing themselves any favors." Then I mentioned that, after the Deepwater Horizon spill that BP experienced, CEO Tony Hayward took that little sailing trip -- right after.
Muckerman: Yeah, why not? Had to clear his head. Lot of pressure.
O'Reilly: Like, dude, don't do that. [laughs]
Muckerman: Well, it was probably already planned. He didn't want to have to pay the fee to break his tickets. Who knows?
O'Reilly: I don't know. There are certain responsibilities a CEO has when things go bad.
Muckerman: He was probably sailing to check on other rigs, Sean.
O'Reilly: Yeah [laughs]...in a catamaran.
Muckerman: Well, you have to get there quickly.
O'Reilly: Fine. [laughs]
Muckerman: Come on.
O'Reilly: You, of course, had Andy Hall, the oil trader who made a $230 million bonus as part of Citigroup (NYSE:C) during the financial crisis. That totally went over well. Jean Paul Getty, he was always wacky. It's kind of like, we need a villain in culture, and often that's business in America.
Muckerman: Yeah. Even though that's the American Dream, it's vilified when you get too big.
O'Reilly: That's actually a good point.
Muckerman: If you dream too big, your dreams become other people's nightmares.
O'Reilly: You flew too close to the sun. [laughs]
Muckerman: Exactly right.
Sean O'Reilly has no position in any stocks mentioned. Taylor Muckerman has no position in any stocks mentioned. The Motley Fool owns shares of ExxonMobil. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.