Patricia L Johnson: In Defense of Oil
In Defense of OilBy By Patricia L Johnson
Each year the U.S. Department of Defense releases a report called "100 Companies Receiving the Largest Dollar Volume of Prime Contract Awards (Top 100)". Out of this report comes the "Top 10 Defense Contractors" listing which is based on the net value of prime contracts awarded to an individual company and its subsidiaries.
We’ll use Halliburton as an example. Total prime contracts awarded to Halliburton Company and subsidiaries for fiscal year 2005 total $5,827,623,078.00 broken down as follows:
|BROWN & ROOT SERVICES|
|HALLIBURTON ENERGY SERVICES|
|KELLOGG BROWN & ROOT SERVICES|
|KELLOGG BROWN & ROOT, INC.|
The "Top 10" figures released are in billions of dollars, therefore Halliburton is ranked #6 for fiscal year 2005 with the total indicated as 5.8 in prime contract awards.
|2005 RANK||TOP 10 COMPANY NAME|
|Lockheed Martin Corp.|
|The Boeing Company|
|Northrop Grumman Corp.|
|General Dynamics Corp.|
|BAE Systems PLC|
|United Technologies Corp.|
|L-3 Comm. Holdings Inc.|
|Computer Sciences Corp.|
|* (in billions of dollars)|
Indicates company was not listed in the Top 10 for this year
Not bad for a company that didn’t make the ‘Top 10’ listing before this administration came into office. Halliburton went from defense contract awards of less than 500 million in 2002, to 5.8 billion in 2005 – very nice, indeed!
In addition to the obvious net profits involved in increased sales; Halliburton’s stock has skyrocketed. Halliburton Co. is traded on the NYSE under the ticker symbol (HAL) and had a closing price of $13.10 on December 31, 2001. Four years later, on December 30, 2005 the stock was traded at $61.96 a share and closed on Friday, January 27, 2006 at $78.93 a share.
The name "Top 10 Defense Contractors" may be a bit misleading. When we think of defense contractors, we generally think of the people that build aircraft, submarines, missiles systems, guns and ammunition. Halliburton describes itself as "one of the world's largest providers of products and services to the oil and gas industries."and is split into two major segments; Energy Services and Kellogg Brown & Root, KBR
The Energy Services group provides oil and gas exploration and production while KBR, the construction segment, builds refineries, develops oilfields, builds pipelines, etc.
What has also skyrocketed during the Bush administration is the total amount of prime contracts awarded to the top 100 as can be determined by the following chart:
In 2001 contracts awarded to the top 100 defense contractors totaled 144.6 billion dollars, while last year these contracts increased approximately 86% to 269.2 billion dollars, or almost doubled in dollars.
In contrast, the CBO issued a report Friday that has been analyzed by the Center on Policy and Budget Priorities, CBBP. The CBBP analysis indicates how millions of low-income beneficiaries in this country are going to be seriously harmed by the provision of the budget reconciliation conference agreement pending a vote in the House of Representatives.
This agreement calls for, among other things, higher Medicaid co-payments and premiums which whould reduce Medicaid expenditures by 1.9 billion over a five-year period.
It’s interesting to note that former Halliburton executive, Vice-President Cheney cast the deciding vote on this conference agreement passed in the Senate.
Take from the poor and give to the rich appears to be the continued goal of this administration.
© 2006 Patricia L Johnson