AmericanPapist Comments
Being the capitalist that I am, I give you this reason: supply and demand. If I ran a business, I'd charge as much as I could when I know my customers are still going to buy. The only thing that's going to stop Big Oil is by consuming less, which will require us to sacrifice our SUVs and have the government impose stricter CAFE standards, and by developing alternative energies. I'm an ardent environmentalist on the grounds of why waste stuff when we don't have to? I think being good stewards of the environment should be an important part of the practice of our faith. Just my two cents here in Kansas. Keep up the good work, Thomas.
Oil is not a commodity anymore; it functions much more like a utility, and on that score alone, it needs to be regulated like a utility. Spare me the slippery slope analogies folks; I'm about a free market as a guy can get, except with regard to oil companies. And I say, Soak'em.
Ed Peters, just take a look at what the government pig receives on each gallon of gas. It may be more than the company makes in profit per gallon. Prices would be much lower if the left-wing loons in this country hadn't blocked the building of refineries and extracting oil from places like Alaska. Tom
I doubt the profits that the oil companies are making are that much more than in other companies.
Also, Ad Majorem Dei Gloriam has an interesting post about stats from 1907: http://slatts.blogspot.com/ Look how much we have progressed since then, thanks to free market capitalism. Without the oil companies, we would not have had this kind of progress.
Let the free market decide whether oil prices are too high. In any case, aren't they double in Europe and East Asia, with their heavy regulation of prices?
Boycotting big oil companies is just an illusion. The brands you see on the gas stations can come from any refinery. In other words, the ExxonMobil refinery can have its gasoline being distributed to any branded gas station. In fact, most oil companies don't own their own stations, because it costs them so much. The only thing you are getting for sure that is ExxonMobil on an Exxon station is their gasoline additive.
I wrote an article on the truth behind boycotting CITGO
Perhaps, we will suffer the fate of Europe that has to pay $8 a gallon of gasoline. Then, as Nathan pointed out, we will stop buying SUVs.
Before TJM tells me again that I need to get out more to see the world, I will point out that I worked for ConocoPhillips in three years preparing the long-range projects for the refinery, and you can see why these companies are making so much money right now: it's all margins. And these margins are being driven by supply and demand. Margins have never been so high. In the 80s, the refining side of the oil business was barely making it, which resulted in massive layoffs and poor hardware maintenance.
TJM,
I'm guessing that you are also against the Clean Air Act that the "left-wing loons" passed and that the conservatives opposed so much. The argument of the latter group was, actually, that the oil companies were going to go out of business, because of the high investment required to meet new environmental regulations.
Oh wait... and several years later ExxonMobil, ConocoPhillips, ChevronTexaco, and Valero are having record profits even though the Clean Air Act was passed?
Hmmmmm... Go figure. I'm just glad that we have something in place like the Clean Air Act, because even with having it enforced, industrial places like Houston have such high air pollution. Could you imagine not having any regulations at all?
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Americans, (I not being that critical,) but you have it very easy when it comes to the price of gas. Canadians would love to pay the price you do. Right now in my city, which isn't the most expensive place in the province, we are paying close to $5.60/gallon (American gallon)($1.15/litre). About 50% of the price is tax on top of the other costs. In nothern Ireland, apparently, the price is double of what we're paying. Count yourselves lucky. Hope this doesn't sound to scathing,
God Bless
I've written on the pricer per gallon of gas on my blog occasionally. Look at the graphic on the blog entry. Only 25% of the cost is attributable to Big Oil. More than half the cost per gallon goes to the guys who drill it out of the ground, i.e. OPEC and other drillers.
Then there's government's huge cut. Truthfinder: as you say the cost per gallon is artificially inflated through taxes. Wonder what would happen to our economy if our gov't did the same? Keep in mind that the vast majority of American goods, including food, travel by truck.
I'm all for slashing taxes on gas folks, or at least cutting the tax rate (since higher base prices mean higher taxes, by way of creep) but folks, if things are so bad for Big Oil, why oh why are they reporting STAGGERING, breath-taking, all time high, profits?
Hey, Dom, what are you doing over here? I thought you had a cold!
Mr Peters, I have nothing but respect for you as a Canon lawyer, but I think you are out of your element here. I have worked in the oil industry (mainly refining and chemicals) for over 20 years. Are you aware that the refining industry has worked on a very, very slim profit margin for much of the last 30 years? Only over the last five years or so, have the refiners enjoyed good margins. If this were not so, then we would certainly have had more refineries built in this company in the 70's and 80's.
Realistically, we do not want the government to take over the energy industry as Hugo Chaves is doing in Venezuela. I would agree that it is unfortunate that we have allowed so many oil company mergers recently.This cannot be good for a true free market economy in the mid/long-term market.
It is very simple. ExxonMobil makes huge profits because it is such a large company. It's profit margin is about 9.5%. (Banks have a profit margin of 19%, real estate about 10%) So it spends hundreds of billions of dollars and makes about $9 Billion back. Keep in mind, ExxonMobil directly employs over 80,000 people and additionally has tens of thousands of contractors. It is the world's second largest company. Between 2001-2005 it paid $57 Billion dollars in taxes to the US alone.
We should not be penalizing companies for being well run and successful. For more info check out http://www.exxonmobil.com/
Corpor...und_harmful.asp
Oh yeah, full disclosure, I work in the oil industry too.
Ed Peters,
Margins. It's all margins. As I pointed out, in the 80s, they weren't reporting such "STAGGERING" profits. It's a cyclical business. Petrochemicals are even worse.
Katerina, you really need to read a little American history before you sally forth with your pontifications. The Clean Air Act was signed into law by Republican President, Richard Nixon, in 1970. The Amendments thereto in 1990 were signed into law by Republican President, George Herbert Bush. Environmentalism in this US was originally fostered by a Republican President, Theodore Roosevelt. None of these are left-wing loons or even liberals. Maybe you should stick to theology. So conservatives have always been behind rational and science based environmentalism. This movement has been hi-jacked by left-wing loons who take rational positions and push them to extremes, like banning oil exploration (might hurt a few caribou) and building refineries (might provide jobs, gas!). Tom
Katerina, are you scurrying to find mistakes in my history lesson? Tom
TJM,
No, actually, I'm working.
TJM,
Ok, your history lesson did not include the fact that the Clean Air Act was first passed by Congress on 1963 and the one from 1970 was pretty much considered an amendment that included more rigorous environmental standards.
The Clean Air Act has many provisions and the one I know the most about is the NSR (New Source Review) provision, because it is the one I worked with in refining. This provision requires facilities such as refineries to install automated pollution control technology in their process stacks. What that does is monitor the concentration of pollutants in process gases, so the EPA can go back in the historian and issue fines if emissions are exceeded. Your history lesson also did not include that in 2003 the Bush Administration wanted to soften the definition of "routine maintenance" in the NSR provision that would have taken many industrial facilities off the hook from installing this pollution control technology. No courts allowed this to happen.
Katerina, oh yeah! Well the 1970 Amendment is what created the federal EPA (you know it gave the Act some teeth). Unlike energy hog Al "Willie Loman" Gore, George Bush actually walks the walk. His ranch in Texas is rated very highly for its environmental friendliness unlike Gore's environmentally unfriendly mansion in Tennessee. Just like the pharisees: "Do as I say, not as I do." I assume from your positions you are also a member of the "Abortion Party" aka Democrat Party. Tom
Environmental concern makes one a Democrat?
Folks, yes!, I write as layman, (npi), on oil, but with some experience in related things (like life) and some ability to follow (and discriminate among) news items and analysis. The fact that I have known gas station owners (more than one) who were run out of the business by the ruthless tactics of their parent corporations influences, but does not control, my opinion of Big Oil, but i tend not to mention such things because I don't feel "personal connections" to an issue are a prerequisite to having defensible opinions on the issue. There's too much of that these days.
Everything you guys say might be true. Really. I've already disclosed my strong free market "bias" (it's just common sense), soI don't need much convincing. But my question stands: does oil impact a modern economy more like a commodity, or like utility? I think that makes a difference.
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