General Electric was started by famed inventor Thomas Edison to help him sell his new invention the light bulb.
The reason that I bring up each of these companies is that both are still around and thriving today and neither relies in any way on their original products. Motorola sells products that were figments in the imaginations of science fiction writers at the time. GE has turned into a conglomerate that sells just about everything. (They even have delved into mortgages, my business, through their subsidiary, WMC Mortgage)
I bring all of this up because several other companies were also around when these were selling their original products: companies like Amoco, Exxon, and Phillips. Most of the oil companies today were around were created when Standard Oil was broken up. Standard Oil (started by famed entrepeneur John D. Rockefeller pictured below) was broken up under the Sherman Anti Trust Act.
Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal". The Act also provides: "Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations...
In other words, the Sherman Anti Trust Act was created to make sure no one company acted as a monopoly and used their sheer size to stymie competition. (Its last most public use was in the break of AT&T) What about when a group of companies acts no different than one and use their own size to stymie competition? This is a question that I asked when I first started blogging at the famed conservative blogging site, Redstate. If you click the link you will see I was also met with a great deal of resistence by my conservative colleagues.
The question continues to linger in my mind many months later. I have never believed that gasoline acts anything like any market that I know of. For instance, the bedrock of any legitimate market is its insistence that every company in it evolve. The reason that companies like Motorola and GE have not only survived for a century and more is their ability to adapt to their changing market. That is what markets do. Take any company that has been around longer than a few years and you will find one that looks nothing like it did originally. From Microsoft, to Ford, to Walmart, these companies have evolved as the market around them has forced them to. After all, did Henry Ford ever imagine a hybrid, an SUV, or any of the current automobiles when he created Ford?
That never seems to happen to big oil. They continue to sell one product, the same product, in pretty much the exact same type: unleaded. There is frankly not a dime's worth of difference between big oil today and big oil in the aftermath of the Standard Oil break up. I believe this has to do with the make up of the "market": an oligopoly (or as some of you know it a Cartel).
I believe the proof lies in the Latin phrase: Res Ipsa Loquitur (the facts speak for themselves). If big oil is competing in a market, why has their product line stayed stagnant for so long? Why has their market not had to adapt? Let me tell you how I would see oil adapting in a real market. Right now, when you drove to your local ENERGY STATION, you would get a menu of FUELS. This menu could be customized to fit the specific needs of your car. A sports car would get the proper FUEL for that car, and the minivan would get the proper FUEL for that car. In the corner of the FUEL station, there would be an electric stand. There, an electric car could get juiced up.
Does anyone wonder why alternative fuels haven't taken off in automobiles? Think about this. There are right now automobiles that can be powered by alternative fuels. They aren't popular because there is nowhere to fuel them. For instance, if you were to buy an automobile that runs on hydrogen, you would need to go to a government sponsored hydrogen fuel station. There are about one hundredth as many of those as there are regular gas stations.
Why isn't there a hydrogen fuel tank in some of these gasoline stations? After all, given that each of the big oil companies clears at least ten billion dollars in PROFITS every year, they can certainly afford the research and development to put them into at least a few of their stations. They don't. The only sort of alternative fuel tank that they are willing to put in is E85 fuel tanks. That runs on ethanol and ethanol has recently been frowned on as a serious alternative energy source. Hydrogen, on the other hand, is run on water which is quite plentiful.
So, why don't we see hydrogen fuel tanks in gasoline stations the way we sometimes see E85 fuel tanks? I think the answer lies in the same reason that companies can make billions per year peddling the exact same product they were also peddling almost one hundred years ago. They aren't competing in any market. They never have, and they will do everything they can to keep their arrangement the exact same it always has.
Like I said...Res Ipsa Loquitur...The facts speak for themselves. These companies have billions they could spend on R & D. My vision could be a reality in years if not months if they wanted it to be. The fact that it isn't speaks for itself.