ExxonMobil posted record profits

[Snowflake]

And we're surprised by this news? :mad:

If you have any interest, you can read it here (http://news.yahoo.com/fc/business/oil_and_gas)

Donna

[scaeagles]

Honestly, this doesn't bother me at all. They are in a for profit business. They are not the ones bidding up oil futures every time a hurricane nears the gulf.

They have investors and a responsibility to make a profit.

[Scrooge McSam]

<chuckle>

And they can't build any more refining capacity because of how burdensome government regulation has become.

:rolleyes:

[scaeagles]

Oh - they could. However, it comes down to a simple cost benefit analysis. Does the cost of expanding or developing new refining capability overwhelm the benefits to their bottom line? Being that they are a corporation that wants to make money, the answer is clearly no. Part of that is government regulation.

If they could make more money doing it, you bet they would.

[Where's Barbie?]

This would have bothered me before I learned more about oil and how pricing works. Now I am on the CAP(community advisory panel) for ExxonMobil and really understand it now. It's about the oil futures & station owners. Owners don't make much money on gas they make it on the mini marts.

[Scrooge McSam]

Part of that is government regulation.

Yep, Part! But that's not what we hear. The argument is that government regulation is the main obstacle to building refineries. The government is restricting their ability to supply us with the finest petroleum products in the world.

<cue short sighted congressman bent on easing environmental regulation as payment for that generous corporate contribution>

And the people say "bah bah"

[scaeagles]

And also, I might add, they have to deal with legal issues and suits brought by groups such as the Sierra Club or Greenpeace. Say what you wish about these groups, but they oppose pretty much everything. They are even starting to oppose wind power because windmills are killing birds (no link - just something I've read).

Why else, Mr. McSam, would the oil companies NOT want to expand their business?

I don't buy the "they're making enough profit now" argument. If it is profitable, they will do it. If it is not, they will not. Government regulation and legal maneuvers (sp?) by environmental groups, as well as the NIMBYs, are what stops them from doing it.

[scaeagles]

I will add, though, that it is true that oil companies may not be willing to pay for certain infrastructure requirements (again, because of the effect on the bottom line, but this is not a government or environmental issue). As an example, there has been discussion about building an oil refinery in the AZ desert southeast of Phoenix. Out in the middle of nowhere, and certianly not "pristine wilderness" in the least. Well, how does one get oil into the middle fo the AZ desert to refine? The hangup is the pipeline that would have to be built and who would foot the bill for 300 or so miles of pipeline from the gulf of California to the facility.

There are, of course, environmental groups opposing it. As stated before, environmental groups pretty much oppse everything.

[Betty]

Where does it end then? What is to stop them from charge $5 a gallon? $10 a gallon. Sure - everyone may buy more fuel effecient cars, but for the forseeable future, we're all dependent on oil.

After all, they'd just be doing their job - making a profit for their investors.

I think that things like oil, electricity, water - things that are considered to be basic requirements to live a modern life if our country, ought to have a certain amount of regulation to insure that consumers aren't needlessly gouged. I expect them to make a profit. But what is to stop them from just charging more? I'd have to pay it - or quit my job and find one within walking/biking/bus distance. Not a lot of choice there. Or move I suppose.

Just sucks to have to spend $55-$65 a week on gas for myself only - not to mention the other car we drive too.

When I was in high school (late 80's) - putting in $10 filled the tank, or pretty near. It would be $20 with my tank size now. That's a pretty dramatic increase in price compared to other things. Okay - maybe not - houses comes to mind.

But darn it. It's too damn much!

[scaeagles]

Actually, I believe that when adjusted for inflation. we are paying less for gas now than in the late 70s.

There is enough competition in the oil industry to prevent what you suggest. If there is evidence of illegal practices such as collusion, the government should step in. If one oil company starts to drastically overcharge, someone else will undercut them and take their profits.

[Scrooge McSam]

I don't care how much the oil companies make. More power to 'em. I also don't care if they lose their shirt.

What I want is for our government to stop catering to these companies; stop rolling back environmental regulations; stop giving polluters immunity from legal action. Stop whining and crying about how our oil corporations are being unfairly treated when that is obviously not the case. Every company in this country has to deal with government regulation; how much taxes you'll have to pay, where you can build your offices, how they have to be built, how you handle the sewage, how you handle your refuse. Oil companies are no different, yet we cater to them. Small businesses handle these challenges successfully, or they fail. Let the oil companies start grumbling and Congress lines up for their check.

[€uroMeinke]

Gas is still cheaper here than in Europe. As for myself, I'm now paying much less for gas by taking public transportation.

[Alex]

Well, wholesale gas costs just as much in Europe as here (for the most part) it is just taxed much more heavily in Europe. Interestingly this give European nations a bit of a safety valve as gas prices rise. Though it would cut revenues, they can provide significant price relief by reducing the gas taxes. In the U.S. that is much less effective (where only 20% of the price is taxes, in most places).

In the Netherlands, for example, taxes make up about 80% of the retail price of gasoline (which is now around $7/gallon). The government could instantly drop the price of gasoline by $2/gallon and still be taxing the gas at more than four times the rate of the United States. In Poland, for example, when people complained about a six cent increase in gas prices following Hurricane Katrina, the government simply reduced the tax by six cents on a temporary basis. There is a small group of economists who advocate high gas taxes in the United States not for revenue or ecological reasons but so that the government could take the uncertainty out of the energy markets by controlling the taxes to smooth out price spikes (much as the Fed uses interest rates to control inflation/deflation spikes).

In Venezuala, however, the government essentially gives gas away at $0.12/gallon. That is a country set up for a fall if anything should ever disrupt their domestic supply of oil forcing them to import.

[scaeagles]

Well, today, the congressional hearings start on these evil money grubbing pirating profiteering oil companies.

Interestingly, does anyone know what Microsoft made in the 3rd quarter of 2005? $3.1 billion in profit. This is just about the profit posted by Conoco Phillips. There is one major difference, however.

Who sets the prices of Microsoft products? Well, that would be Microsoft. No one else. There is no software commodity market. Microsoft says "here's the product, here's the price, take it or leave it.".

I would offer that with the tremendous amount of computer technology that is integrated throughout every ounce of our existance, from the internet to operating systems to software to whatever, that it is just as important to our economy and daily life of citizens as is oil.

However, the commodities market sets the price for oil. Speculation. Fears of natural disaster. Etc.

I wonder how long it will be until Bill Gates is called before Senate committees to justify the gouging going on. I wonder how long it will be until Microsoft is subjected to a "windfall profits tax".

[wendybeth]

Well, today, the congressional hearings start on these evil money grubbing pirating profiteering oil companies.

Interestingly, does anyone know what Microsoft made in the 3rd quarter of 2005? $3.1 billion in profit. This is just about the profit posted by Conoco Phillips. There is one major difference, however.

Who sets the prices of Microsoft products? Well, that would be Microsoft. No one else. There is no software commodity market. Microsoft says "here's the product, here's the price, take it or leave it.".

I would offer that with the tremendous amount of computer technology that is integrated throughout every ounce of our existance, from the internet to operating systems to software to whatever, that it is just as important to our economy and daily life of citizens as is oil.

However, the commodities market sets the price for oil. Speculation. Fears of natural disaster. Etc.

I wonder how long it will be until Bill Gates is called before Senate committees to justify the gouging going on. I wonder how long it will be until Microsoft is subjected to a "windfall profits tax".

We have alternatives to Microsoft, don't we?

I almost feel sorry for those poor oil company executives! Nearly as sorry as I feel for the Enron guys, and the Worldcom people, and all the others that have been found guilty of market manipulation, stock fraud, insider trading, etc. I'm sure the oil industry wouldn't do such things!

[Alex]

I have no idea whether the oil companies have manipulated the markets. If they have, then they should be punished.

That said, the market explanations for the profits doesn't seem that out of line. Not that the executives are sympathetic figures, but as one of them said this morning, the profit margin is the same as the average of all U.S. industry, it is just that they are such a bloody huge industry.

The oil business is historically a low margin one and as another said, where were all the people in the mid-80s when the industry was losing money hand over fist? Oil production (and these are numbers I'm looking up so the math I do may be wrong) is around 85 million barrels a day.

Or 7.82 billion barrels a quarter. The top five oil companies reported a combined quarterly profit of $32.8 billion for the 92-day third quarter (per the San Jose Mercury-News article I just looked at. I don't know what the oil production market share for teh top five companies is but I feel somewhat confident in guessing that it is more than 80% and less than 100%, which means that at this range the profit per barrel would be somewhere between $4.19 and $5.24 per $60+ barrel.

That's just back-of-the-enevelope but doesn't seem horribly unreasonable to me, especially when both ends of the political spectrum have long espoused ideas that would argue that both prices and profits should surge in the short term.

But if they have been manipulating then nail them to the wall.

[scaeagles]

We have alternatives to Microsoft, don't we?

Last I checked we had electric cars and cars that run on CNG (compressed natural gas), too. Both of those are about as widely used as, say, Apple computers.

[wendybeth]

Lol- be serious, Scaeagles. Those electric cars are about as dependable as Windows- they stall and simply shut down constantly, and are not a practical mode of transportation, let alone the cost factor.:rolleyes:

[Alex]

That said, people do have alternatives to gasoline consumption. Also, I've had this windows box on now for almost two months without crash or failure. Lani's Powerbook crashed last night.

And I drive a hybrid (one of the ones geared towards fuel efficiency not power). And I don't have a problem with gas prices going up to $10/gallon if the people who have the gas want to charge that much for it and the people who want the gas keep buying it.

And the sky is purple in my world.

[Name]

Well, today, the congressional hearings start on these evil money grubbing pirating profiteering oil companies.

Interestingly, does anyone know what Microsoft made in the 3rd quarter of 2005? $3.1 billion in profit. This is just about the profit posted by Conoco Phillips. There is one major difference, however.

Who sets the prices of Microsoft products? Well, that would be Microsoft. No one else. There is no software commodity market. Microsoft says "here's the product, here's the price, take it or leave it.".

I would offer that with the tremendous amount of computer technology that is integrated throughout every ounce of our existance, from the internet to operating systems to software to whatever, that it is just as important to our economy and daily life of citizens as is oil.

However, the commodities market sets the price for oil. Speculation. Fears of natural disaster. Etc.

I wonder how long it will be until Bill Gates is called before Senate committees to justify the gouging going on. I wonder how long it will be until Microsoft is subjected to a "windfall profits tax".
Considering Microsoft was found guilty(for lack of better word, and proper research at time of posting) of anti-trust violations, not far fetched that they would be brought before the powers that be again. Microsoft was able to snake out from under the restrictions placed on it without any further inquiry......

I am personally a *nix fan myself, and run a FreeBSD server to hold important files.... been running since the last power failure in my area.... my windows machine on the other hand has had to be upgraded, rebooted, or crashed many times since then......

Price differences:

FreeBSD.............Free
Windows............well over $50(don't remember exact price anymore)

Sure FreeBSD is not prefered as a workstation machine to replace Windows, but there are other flavors of *nix that are geared to windows replacement, and their cost is "free" too(only cost is a bit of a learning curve which with every passing day becomes more and more negligable)

[€uroMeinke]

Well - gas prices drove up ridership on public transportation - I'm one of them. And now that I've done it, I'm reluctant to go back even though the gas prives have dropped. I wonder what the long term effects to the oil companies might be for that? I know for myself, I'm filling up once a month instead of once a week. I can't be the only one.

[Not Afraid]

The LA Times magazine on Sunday had a quick interview about auto usage and gas prices. They interviewed 5 people and when asked why the prices were so high, 4 out of the 5 people partially blamed the oil barron in the White House.

Not that a survey of of 5 means anything, but I wasn't expecting that answer.

[Name]

Hey, it worked for doctors and camels, and dentists and toothpaste, why not drivers and gas prices.....

4 out 5 drivers agree...... the president is to blame for hgih gas prices.

[€uroMeinke]

Hey, it worked for doctors and camels, and dentists and toothpaste, why not drivers and gas prices.....

4 out 5 drivers agree...... the president is to blame for hgih gas prices.

Really - we need to get him out of the whitehouse and back to drilling for oil...

[Name]

only 3 more years left......... http://www.hostboard.com/ubb/smilies/expressive/scared.gif