Terrorists Attack US Soil AGAIN !

[bluedevil]

http://www.time.com/time/business/article/0,8599,1828165,00.html?xid=feed-rss-netzero


Exxon Mobil reported second-quarter earnings of $11.68 billion Thursday, the biggest quarterly profit ever by any U.S.

[benfoxmra95]

I missed where it said there were terrorists? Or even foreigners for that matter.

Its an American company based out of Irving Texas. If your upset with them making money on gas then sell your race bike and all your cars.

You can't blame someone for making money off something that is in high demand, that's one of the virtues that this country founded off of


I say blame ourselves for letting ourselves become so dependent on the people who own the oil. If you have a problem with alcohol you don't blame the brewery.

[dave.gallant]

If you have a problem with alcohol you don't blame the brewery.

No, but we blame Phillip Morris ("Big Tobacco") for all the lung cancer?

I am as confused as you Ben.

[bluedevil]

Do Terrorists have to be foreign? :lol:


Americans did drive 9 billion less miles this year over last..... so way to go America... At least we are doing what we can to eliminate the need for as much petrol.....

My race bike for next year will be hydrogen and produce only water as exhaust... wait a minute... dang.. Not yet... :cry:

[T Baggins]

I think this is a "slightly" different situation though, Ben. The oil companies are bankrupting the country - simply because they can. Yeah, it sucks that we've gotten so dependent on oil - but it's not like we can all just say "I think I'll buy a bicycle instead of driving" because the existing infrastructure has been built entirely around motorized travel.

I'm the last one to think the Government can do anything right - but methinks it's time for them to call bullshit and regulate the price of gas - even if only in the short term - in the name of a National Emergency. Anybody remember Bush's speech following the limited pockets of price gouging after 9-11. "I will not sit back and let the oil companies take advantage of the American public..." Well now it's going on all over the country - and nobody seems to be the least bit concerned.

I happen to know that a local company that refines oil is only paying around $50 per barrel versus $140 or whatever the world market is commanding. Yet they're selling the final product at a price consistent with the $140 cost. That's BS!

Imagine what would happen to the US economy if the US oil companies decided to make a fair and reasonable margin (even if it is TWICE what they usually make) by dropping the price of gas and diesel by $1.50 or $2.00 per gallon when selling domestically. Unemployment would drop, consumer confidence would go up, the profitability of US companies would improve, etc, etc, etc...

Yeah, go ahead and rape and pillage the rest of the world who don't have their own reserves - but Jeezus Christ, enough is enough here at home. When the US goes completely broke, everyone is unemployed, and anarchy reigns supreme, and the oil companies find themselves in the middle of a civil war - who they gonna sell gas to then?

Eff those effing, effers! Efffff!

[bluedevil]

Tony, its not true what they say about you at all..... haha

U may have taken an Economics class or two in your life... or watch a lot of CNN..either way.. I have to agree.....

Its cool to make a profit.. Its cool to make a huge profit... but when you bankrupt the country and sink the dollar bill (not single handedly), what point does it become un-ethical...?

Hell I think $80 an hour to have my car worked on is nuts.. but at least I dont have to pay that every day I wake up... Hell some people are to the point of working to pay for gas to get to work the next day....

Its legalized terroism..... (extreme I know) but in many case very similar.... So far the only happy people are the oil companies and Vespa who's sales rose something like 800% this year.... :?

[The GECCO]

I don't fault the oil companies. Their profit margins (around 8%) are lower than most other large industrial companies. If I could only make 8% in my industry, my boss would have shown me the door long ago.

So, if you maintain the same profit margin and the price of your commodity skyrockets, and there is no significant decrease in demand - you're net profits will go up. It's inevitable, and simply a product of the numbers.

Here's another way to look at it - if the oil companies aren't making a profit, there's no way they can invest in future projects that are necessary to insuring that they can continue to be in business, and continue to provide us with the energy we so desperately need. But, let's ignore that and assume that the oil companies have decided to forgo all profits and operate at a break-even. Furthermore, let's assume that 100% of that $11.68 billion of profit came from the US (when in truth, these are international corporations and less than half of their profits originate here).

So, $11.68 billion profit per quarter. There are 300 million people in the US, throw out 50 million that are underage or don't buy gasoline for other reasons, that leaves us with 250 million people.

$11.68 billion divided by 250 million = $46.72 per person per quarter, or about $15.50 per month.

That means that with all the assumptions above, if Exxon suddenly decided to operate at a break-even, thereby ensuring their own demise, it would save you about $15.50 per month. Personally, I would rather pay the $15 and know that I'm still gonna have heat in ten years.

[glenngsxr]

Although I think the oil companies are making way too much, I do not believe it is their fault. The speculation in the oil traders market is to blame for this booboo. The ratio of supply and demand has been relatively the same for the past eight years so it's not true that market forces driving the price of oil up, it's traders. I can buy 100 barrels of oil from Exxon for $50 and NEVER take possession of it and then resell it whoever I want for whatever I want. This is the loophole that has caused the oil to explode. I did my senior thesis on this in college for economics degree and my discertation for my masters on it as well. It is interesting stuff, this economy. I blame two things for this market in the short term and one long term. Two short---Treating houses like ATM's and oil. Long term--Iraq will bankrupt us. This admin has taken a $240 billion surplus and created a $9.5 trillion accounting sheet of red ink. Glenn #62

[bluedevil]

Personally, I would rather pay the $15 and know that I'm still gonna have heat in ten years.


U may still not have heat (or oil) in 10 years.... then what? Oil is not unlike the ole fashion alien movie... Aliens come to Earth and use up its resources, then move on... It will run out.. Maybe not when we are alive.. but it will... Do we continue to money grubbing mongers that gouge all we can from the "turnip" then find the next soure of fuel to do the same?

Im interested in this profit margin of 8%.. Where does that come from? How can they make oil for pennies or a few bucks a barrel and sell for 140 and only make 8%.. Are they so out of whack on other costs they only pull down 8% profit...? Im guessing its the multi million dollar salary for that Janitorial tecnition... Jeeesh..

[kangsoh]

For what it's worth guys, I can tell you that we're (an oil and gas company) not making the $130-$140 per bbl that everyone's up at arms about. We (and most everyone else) "hedges" production way in advance- which means that anything coming out of the ground today, has more than likely already been sold at an agreed upon price way in advance. So, depending on what our contract negotiators (as well as negotiators for refiners such as BP, Exxon, Shell, etc..) set up contracts for in advance, the reality could be that we're making far less than what a barrel of oil is going for on the open market. As I was told by our contact negotiator, anyone who thought that oil was going to be this high 6mos to a year ago is either clairvoyant or knew something that everyone else didn't at that time. This price paid per barrel also doesn't account for production costs, which as companies are forced to go to further extremes (deeper reservoirs, more inaccessible locations, refining of more "dirty"/heavy oil) cut into that profit as well. Conspiracy theories regarding price gouging on the part of "big oil" aside, it all comes down to supply and demand, as well as simple business economics. If we didn't need/want that much oil, then it wouldn't be an issue, would it? :) I'll tell the guys offshore when I'm out there next to step up production a bit next time and that should take care of our problem....

Oh, and "hi" to everyone that I haven't talked to/seen in awhile. Hope you all are doing well...

[The GECCO]

Personally, I would rather pay the $15 and know that I'm still gonna have heat in ten years.

U may still not have heat (or oil) in 10 years.... then what?
The oil companies are already investing in alternative energy technologies. Obviously they don't want these technologies brought to market now, but everyone knows (and the oil companies know it better than anyone) that eventually the oil will run out. When that happens these same companies would like to continue to exist and make money rather than simply disappear, so they are currently investing in ways to provide energy beyond the life cycle of the oil in the ground.

[benfoxmra95]

your way off the mark calling this "legalized terrorism"

When an activist walks into a resturant filled with Australia, new Zealand, american, and Japanese tourists in Bali with a back packed filled with explosives and steel balls and sharp metal scraps to inflict as much pain suffering and "terror" on people as possible. Now that's terroism, to strike fear in the hearts of people to the point thier afraid to carry on normal business and lifestyles.

As crooked as oil companies can be and are, they are not terrorizing the American population. We all have a choice. Truthfully if we really wanted to be good we'd stop burning the thousands of gallons of fuel to get to the track and ride at the track.

[bluedevil]

For what it's worth guys, I can tell you that we're (an oil and gas company) not making the $130-$140 per bbl that everyone's up at arms about. We (and most everyone else) "hedges" production way in advance- which means that anything coming out of the ground today, has more than likely already been sold at an agreed upon price way in advance. So, depending on what our contract negotiators (as well as negotiators for refiners such as BP, Exxon, Shell, etc..) set up contracts for in advance, the reality could be that we're making far less than what a barrel of oil is going for on the open market. As I was told by our contact negotiator, anyone who thought that oil was going to be this high 6mos to a year ago is either clairvoyant or knew something that everyone else didn't at that time. This price paid per barrel also doesn't account for production costs, which as companies are forced to go to further extremes (deeper reservoirs, more inaccessible locations, refining of more "dirty"/heavy oil) cut into that profit as well. Conspiracy theories regarding price gouging on the part of "big oil" aside, it all comes down to supply and demand, as well as simple business economics. If we didn't need/want that much oil, then it wouldn't be an issue, would it? :) I'll tell the guys offshore when I'm out there next to step up production a bit next time and that should take care of our problem....

Oh, and "hi" to everyone that I haven't talked to/seen in awhile. Hope you all are doing well...




Its not supply and demand... Thats putting it far to simple.... Supply and demand is how much I pay for my Ipod....

If Id pay 1K for an Ipod... the price would be 1K... However I wont so they make it 199 (for example) but I dont NEED my Ipod and I have the choice to pay 1K or not... I dont have that luxury for gas or food..... At that point supply and demand becomes a 101 prionciple and extortion becomes thae main principle......

Secondly: We dont feel sorry for an oil company that says.. "the reality could be that we're making far less than what a barrel of oil is going for on the open market" because the end result is still a bagillion dollars profit and the CEO driving a Ferrari (ON Tuesday) and the Lambo on Wed..... The actual real life world we live in is that more often than not the company is making MORE than its going for on the open market....


As long as we give the main fuel of the earth to a private owner.. this will never end.... With out regulation, when oil is gone it will happen again wiht the next alternative fuel... I guess Ben in reality was right.. Its our fault if we allow ourselves to repeave our faults and allow it to happen again.... Once bitten shame on your.. twice bitten, shame on us.....

[bluedevil]

your way off the mark calling this "legalized terrorism"

When an activist walks into a resturant filled with Australia, new Zealand, american, and Japanese tourists in Bali with a back packed filled with explosives and steel balls and sharp metal scraps to inflict as much pain suffering and "terror" on people as possible. Now that's terroism, to strike fear in the hearts of people to the point thier afraid to carry on normal business and lifestyles.

As crooked as oil companies can be and are, they are not terrorizing the American population. We all have a choice. Truthfully if we really wanted to be good we'd stop burning the thousands of gallons of fuel to get to the track and ride at the track.


yes agreed perhaps to bold or extreme of a statement....I guess it depends on how loose the deffinition of Terrorism is... In the extreme case you mentioned... yes the loss is life or the right to enjoy life.... but on a much less extreme example, isnt taking away my enjoyment of life, by making it unattainable financially... the same thing? Its not as terrible as taking my life.. but in the end a loss of the enjoyment of life is still the result.... .. kinda similar right? just a more loose deffinition of the word terrorism.... :?:

[bluedevil]

We all have a choice. Truthfully

wont go into this one much.. but no we ALL dont have the choice... your bread and milk have to get on the shelf some how and to date the only way is burinig gallons of diesel in a truck to get it there... unless I want to own a cow and grow my own grain..it has to remain that way at this point in life....

[kcecil]

Don't forget the HUGE devaluation the dollar has recently experienced as one of the causes for the spike in crude prices, since oil is traded in $. That is thanks to our Federal Reserve Bank flooding the market with free dollars since 2001.

Increasing demand around the world, known decline of production in sight, dollar devaluation, instability in source countries, and rampant speculation have all come together in an unholy confluence to give us the prices we pay now.

[HAMMER]

good thing i ride a 50 that gets 90mpg ...... 4 bucks a week ........suckers :lol: :shock:

[gsnyder828]

:lol:

Everyone up in arms about those horrible big oil companies extorting outrageous 8.4% profit margins from the innocent public need to take some hopium (http://www.chicagotribune.com/news/columnists/chi-kass-30-jul30,0,915294.column) and relax...

Just be careful - it's mildly habit forming.

[kangsoh]

Wow.....

Lest I appear to be an apologist for the oil and gas industry, I will make it quite clear that it in fact is about supply and demand.

There's something that you need, and given the fact that your average Joe doesn't have the ability (in skills, materials, manpower, technological knowhow or otherwise) to explore for, extract and refine the natural resource into a useable product, we rely on industry. This industry has the ability to focus exclusively on delivering this product as efficiently as possible to the consumer while at the same time doing this at a profit. So how is this wrong? Does the fact that you have to pay someone else to make your clothing, build your house, or produce the food that you eat mean that they don't have a right to make a profit off of it? And how much exactly is "too much"?

Look at what happened when people did own the mineral rights to the oil they discovered on their property- they turned around and sold it to someone else to explore and produce for them. And in those boom days, what happened? The uncontrolled production of oil created a "glut" in the market, driving down prices, and causing many in the industry to go bankrupt/out of business. Those that remained, consolidated and created a means of regulating the supply to meet demand so as to make sure that there would be a steady supply at reasonable prices (and profit) to all. An interesting ancillary result of all the unregulated production was the fact that many reservoirs of oil were prematurely put out of production due to the rapid and inconsistent nature of the way they were produced.

You want government intervention or better yet nationalization of the oil industry as a solution? It's been around for awhile in other countries- look at Petrobras in Brazil or Total in France. You think that it makes it any easier for the "working man" to drive a dually to work because of government control in the industry? How many dually drivers do you see in either of those countries?

So, given the fact that American society has evolved to the point where it has become dependent on the petroleum industry, now that supplies are tightening, as the natural resource pool dwindles and there are more consumers for the dwindling product coming out of the ground (India and China), there now is some mysterious conspiracy and evil profiteering occuring at the hands of corporate America? You point to the extravagant lifestyles of oil and gas executives, but does that mean everyone driving a Ferrari or Porsche or Lamborghini is a criminal profiteer? Yeah, maybe $10 million a year is excessive, but how well of a job do you think that you could do running a multi-million dollar a year enterprise? Better yet, does anyone "deserve" that much a year in salary? Is it any more wrong that someone gets a multi-million dollar contract to punt a ball around a field or ride a motorcycle on a track? Let's not confuse perception and personal opinion with facts here...

Let's call it like it is- we set ourselves up as a society dependent on petroleum, and for many years, as the largest consumer of petroleum on the planet, we enjoyed the ability to have the fruits of everyone else's production. Now that there's a dwindling supply, and the producers have a choice in what markets to sell to, let's not play the role of the spoiled child and cry about it.

Let's be adults and adapt to the situation and accept the change as an impetus to become a society less reliant on oil all around. Biodiesel, wind, geothermal, solar, fuel cell, hydrogen- there are alternative fuel technologies that are available to us, but haven't been investigated because it has been easier to just continue on our oil dependent course....

I work with people who have to pay the same bills you do, have a mortgage like you do, and have the same mouths to feed that you do. These were the same people who during the oil bust of the 80's and early 90's were out of jobs doing things to make ends meet. None of them are running around in a different exotic car every day of the week, or are laughing their way to the bank. We all work jobs like you do and have to pay the same price at the pump that you do. It may be a smaller portion of our paycheck to do so, but it still hurts us the same when the price goes up at the pump. To call us "terrorists" or "extortionists" as if we go out of our way as a collective industry to squeeze everyone else out of their last nickle and dime is quite an extreme assessment of the situation.

So you give up the ipod, the dually, and maybe downsize the car. You don't eat out as much, or you skip a race weekend. You do what you have to in order to make ends meet. It's not the government's responsibility to make it so that you can do everything you want in life as you always have. Sure, it sucks, and it's not fair, but that's life....

Sorry for the rant! I'll go back to lurking...

[T Baggins]

Aaah, Kanger - don't be a lurker... you're way more fun when you rant. :lol:

I think the big difference here is that, singlehandedly, not a one of us have the ability to do a damn thing about it. Not until those whe stand to profit the most have profited the most (or there is a coup), will there be a significant shift in American policies on oil dependence. This includes many of our elected officials, some of them in the highest of offices - and of course the lobbyists who represent special interests will spend as much money as they can to make sure the cash train keeps rolling.

As citizens, we're too dependent on gas, that's for sure - but the government is too dependent on gas TAXES to allow rapid transition to alternative fuels until they figure out how to get their fingers into the cash flow. This is where we get the money to build the infrastructure of our roads, etc... Our government NEEDS us to keep using gas.

I think you could say that Americans are similarly dependent upon denim jeans. I mean, pretty much everyone has them - and it could be argued "needs them" But here's the difference, I can choose between "seven" jeans that are $140 and Wal-mart specials for $8. Both pretty much do the same job - and if money is tight I'd certainly opt for the lesser brand. Last I checked, there was no lower grade of fuel available to me at a lower cost.

And before you call me a conspirast (is that a word?) consider that the two leading causes of un-natural death - which contribute more to the Health Care costs than probably all other ailments combined - are not only not outlawed in the US, but in fact we tax the shit out of them so our government can continue to fund it's overstuffed self. Anyone care for a beer or cigarette?? :lol:

Am I opposed to someone making a reasonable profit for items they produce or sell - heck no. That's capitalism. (for the record I say it is total bullshit that they're making 8% profit - yeah maybe after they bonus everyone out at twice their normal salary, buy all new everything, and then write off a bunch of bogus bad debt...) But, in this situation, where the negative impact of the cost of the product is SO far reaching - I don't think some sort of regulation is unreasonable.

This is affecting the cost of food, goods, travel, employment, schools, etc, etc, etc... EVERYTHING we do in the US is dependent upon transportation. It's easy to sit back and say "shame on us" but that doesn't really fix the problem does it? A meaningful, COOPERATIVE, transition to dependence on other fuel sources needs to be created. We can't just watch this great nation crumble because one industry is making gazillions of dollars.

Even if it were mostly symbolic, and definitely temporary, SOME reigning in of gas prices would have an immeasurably POSITIVE imact on the US economy. Somebody please refute that...

[newb]

I don't usually talk politics or things dealing with government because they are always a heated conversation. I will say however that I am not happy with the current price of oil and gas. It impacts everyone and it is far reaching. I have started riding my mountain bike to work (sure it's only 2 miles) to save on the price of fuel.

But I would not go as far as calling the oil companies terrorists or being angry at them. We have been spoiled here in the US for a long time. The price of gas in many parts of Europe exceeded five dollars ten years ago and they have adapted. It is not normal in those countries to see 3/4 ton trucks in peoples driveway. They don't all have 300 plus hp cars to take little Johnny to school in the morning. It is not embarrassing to be seen on a moped. They use public transportation and get this, ride a bike or walk. How many people on here carpool? How many people ride a bike(with pedals) instead of driving?

As a whole the racing community has the least room to complain(myself included) about oil. We drive big trucks with trailers to race tracks hundreds, if not thousands, of miles away. Once we are they we tear through race fuel, and tires like there is an endless supply. For what? To have some fun for a weekend? A season? For a number plate? A $25 dollar trophy?

If you want to call a company terrorists, look at insurance companies. At least oil companies provide a tangible product. You can't stockpile insurance and they make just as much money. Insurance companies have yet to have a losing year and you are required to have insurance.

We do have choices. No you cannot change how your read is transported but you can buy local fruits and vegetables. Usually they are healthier and taste better. Cut out the Starbucks and make coffee at home. Turn down thermostats, and turn off lights when not needed. The list goes on and on. Any one of the may not offset the cost by itself but they all help.

To end my long winded rant, I do not agree with the prices but I have accepted that to enjoy the things I like in life, I have to deal or make changes. I am not blaming anyone but myself and don't expect the government to bail us out and keep weakening the dollar. Because guess what, subsidizing will only add to the national debt. We all must make some sacrifices. Any one planning to quit racing because of gas prices?

[cu260r6]

In 2001 the percentage of speculators (those that don't use the oil they buy) that had a license to bid on oil commodities was only 27%. After deregulation of the licensing procedures by Republicans in Congress in 2003 this percentage began to rise sharply, and speculators now make up 81% of the oil commodities market. The rise in the price of a barrel of oil has tracked the rise in speculators in the commodities market. Reimplementing tighter controls would significantly reduce the price of oil.

Regardless of the solution sought there is no possible way to drill out of this problem. Being a world market whatever extra supply produced by the US will be either insignificant compared to world output or compensated for by OPEC nations with equally reduced output. Reducing the demand through conservation and alternatives s the only solution. Those that tell you we have gigantic domestic reserves are counting sources that are not economically practical currently. For example, gas would have to cost $10/gal to make oil shale commercially viable for the oil companies to pursue.

If you're a defender of Exxon or Big Oil profits as necessary or justified then look what they're using those profits for. Last year Exxon took $26 billion of profits and bought back shares of their stock to increase the price and the value of their company. Very little of this is going back into reinvestment or research. Oil companies are not researching cleaner energy because the need is not present yet. They believe there is 40 years worth of oil left, so any real research into alternatives can wait several more decades until it is pursued aggressively.

If you're interested in curbing your own use look up hypermiling. I get 32mpg normally and 18 mpg while towing out of my Tacoma through these techniques.

[The GECCO]

Here's another way to look at this evil company - while they posted record profits, they also paid record taxes. They paid $3 in taxes for every dollar of profit. Who else does that?

http://www.istockanalyst.com/images/articles/ex.bmp2008735678small.jpg
Source http://www.istockanalyst.com/article/viewarticle+articleid_2459357&title=Exxon_Posts_Record.html

Also, there is mention of the 8% profit margin on CNN's site
Defenders of oil company profits also point out that their profit margin, at around 8%, is slightly below average for S&P 500 companies, and far below the 20%-plus margins seen at companies such as Microsoft or Pfizer.
Source http://money.cnn.com/2008/07/31/news/companies/exxon_profits/?postversion=2008073109

[bluedevil]

Kangsoh: "how much is to much?" (In relation to profit)
My answer would be, when its bankrupting your country, raising unemployment to astonishing rates, driving the value of your dollar below the value of thepaper its printed on, and thus also contributing to the housing epidemic we are in, and so on.... Its a snow ball effect... Since gas/oil is the sole dependance of nearly every American, its also the one of the most significant driving forces in our economy... Its a huge cycle....

Lower gas = lower prices for food = more demand for other goods and services = need for jobs and thus lowers unemployment = less housing forclosure = more building of new houses = again more jobs and demand for not only jobs and goods such as wood....but again oil and gas ... Tada..... Profits still remain high for the oil companies because demand has still increased and the nice part is the price could have still stayed low to get there........

The thing is that no where in that chain can we break the cycle other than with fuel .....


Newb: Im totally with ya on the Americans having huge trucks/suv's etc and MOST do not need them..... Europeans have understood for a long time a scooter will generally cut the mustard in most cases and when it wont, they have a hampster with a stearing wheel as a car...... America is catching on (stobbornly) now... Decades to late.... I do however remember having a Datsun B210 when I was a kid in the early 80's.. It got like 400 miles to the gallon and fit 2.2 people in it comfortably... yet my folks fit the entire fam in there and gas was .69 cents a gallon... HAHA

Its true that we dont need most vehicles we drive... and for some that can afford a car payment (with out a job or house that they just lost) they can get a new hybrid or gas sippin car.. but sadly some are stuck with the gas sucker out of inability to afford a more gas friendly alternative yet... :cry:
I think by stating things like SUck it up, or stop going to Starbucks... is not quite the way to go about it... Though I do think extras like Starbucks or maybe even racing will have to go to maintain a budget with higher gas.... However, when you cut all that out and still can barely afford your pills for illness, or gas to get back to work to buy more gas.... Then what? What heppens when you have no "fat to trim" so to speak? We just say.. Sorry man... Better luck in 5 - 10 years when things get better ??? No Its just not that black and white in regards to just toughing it out..... Its the whole reason we have welfare, medicare, Social Security, Economic Simulus, Federal Reserve, and Politcians.... to fiddle and impliment a manual control over these things.... The sad part is (which was also stated earlier) Our government who is now also so dependant on tax revenue from fuel sales, they have tied their own hands from being able to fix the problem.... So they NEED gas and oil to sell and they need the price to be high, to receive the 30+ billion in tax revenue...... Our regulators that are in charge of equalizing all of these things, have unfortunately worked themselves out of their original purpose in the 1st dang place... :roll:

None the less..sorry for the long way around it.. but... I agree .. if you are able to own a more econimal and fuel efficient vehicle you should... Hell if you are able to cut it out completely and ride a bike or scooter..U should.....I myself traded in the ole 16 mph hwy truck for a 30+ mpg hwy cross over .... Its not a 60mpg Hybrid.. but it allowed me to save ~$180-200 a month in fuel costs (just shy of the payment cost, to lower my DEMAND for fuel, yet not lower my SUPPLY of income) and still had room enough to get me to the track..... (which has also suffered ... Though I didnt give it up, Ive been buget racing to the extreme... Pump gas instead of VP.. tires for more than 1 weekend instead of every weekend.. and dropping more than half the classes I raced.....) and when it gets to the point where that is no longer enough... I quit racing... but the end result will not be my unwillingness to do with out.. but more so the Oil tycoon who bought his 3rd Ferrari this year.... (and our pres who bombs people claiming "Weapons Mass Destruction" and only finds an ole AK in a cave we gave him 30 years ago ) but thats a whole different thread all together.. HAHA :wink:



If you want to call a company terrorists, look at insurance companies. At least oil companies provide a tangible product. You can't stockpile insurance and they make just as much money. Insurance companies have yet to have a losing year and you are required to have insurance.


BUT Newb.... Most insurance companies only make 1-2% profit.... :wink:


cu260r6: What you eluded to (I think) is exactly right.. The reason profits ar 8% is becuase of costs being abnormally high, and paying the , as I stated before) Janitorial Tech 27 mill a year.. by that I mean exec salaries that are way out of line.... Do they need 400 million (making up a figure for dramatic emphasis)? NO... They can get paid 300 million and still own 7 houses and 3 Ferraris, and over the overall corse of the company end up with 9% profit and drop the price .50 cents the pump in the mean time...
The fact is when you read financial numbers of any company anymore.. U have to take them with a grain of salt... They CAN be mad to say anything they want.. or at minimum skewed to look a certain way.... Do you think that oil companies want the public to see them making 40% profit? No way... So they say 8% or make it look like 8% yet boost record levels....This way all of us Americans see that.. "Oh well they are makin less than Levi is on my jeans I just bought..... They arent screwing me over.... :roll: "

Sorry I know carrying it to far... but in the world we have become.. we have to understand .. alot of people get paid alot of money to make Wallstreet "THINK" a certain way....

[bluedevil]

Wanted to mention... We already know we wont change anyones mind... but having a rational well thought out discussion about it is always nice... Plus its this or do work...HAHA

Thanks all or making my braincells actually wake up the last 2 days... and distracting me from my mindless thought process of work.... (That Im thankful for having so I can afford gas to get back here tomorrow.... :wink: )

[gsnyder828]

BUT Newb.... Most insurance companies only make 1-2% profit.... :wink:

Not even close - you might want to check your "source" - the industry net profit margin averages are:

- Property and Casualty Insurance: 8.2%
- Accident and Health Insurance: 7.7%
- Life Insurance: 6.5%
- Insurance Brokers: 13.6%

[dave.gallant]

BUT Newb.... Most insurance companies only make 1-2% profit.... :wink:

Not even close - you might want to check your "source" - the industry net profit margin averages are:

- Property and Casualty Insurance: 8.2%
- Accident and Health Insurance: 7.7%
- Life Insurance: 6.5%
- Insurance Brokers: 13.6%

I commend you on two points:

1) Using actual facts.
2) Not ending every otherwise complete sentence with three "...".

( Carry on! )

[gsnyder828]

I commend you on two points:

1) Using actual facts.
2) Not ending every otherwise complete sentence with three "...".

( Carry on! )

Thanks...

It took me... less than 1 minute... to find the "facts"... on Yahoo! finance...

Not too hard... even for me...

[The GECCO]

... :shock: ...

[dave.gallant]

... :shock: ...

L...O...L..!

[The GECCO]

I just looked up the numbers for the company I work for - in 2007 we had gross sales of $6.003 billion with gross profits of $1.221 billion, a profit margin of 20.4%.

Our particular branch did $8.4 million at 24.5% margin.

I personally did $4.26 million at 23.6%.

We are a publicly traded company so this is all public information, just like Exxon's financials are.

All the stuff I sell goes into the buildings occupied by the companies that we all do business with, including most of the refineries around here that are my biggest accounts. If I charge more, that means these companies overhead costs go up, and they pass that along to you, the consumer.

So, based on the figures above, why isn't anyone calling for my head? Or at least the head of our CEO (who takes home a rather exorbitant amount of dough each year)? I'll tell you why, because we aren't a very appealing target for the media. There's no gains in their agenda in targeting us and making us out to be the bad guys. However, when they pull up the P&L statements of the big bad oil companies it makes it a lot easier for the tree huggers to villainize them in the eyes of the public. Heaven forbid that the capitalist theory that this country was founded on should actually WORK. The answer most certainly isn't to have the government step in to regulate prices, in my opinion. If they are forced to charge less for their product, I doubt there profits will suffer accordingly. They will do everything possible to maintain profits by cutting costs elsewhere - like worker safety, proper environmental precautions and post accident cleanup, and salary and benefits for the worker bees like Kang and Joe Janitor (who definitely ISN'T making millions). In other words - the common man will still suffer, all so you can save $.50 on a gallon of gas.

Can anyone name an industry that got better after the government got involved AND explain how such involvement would produce similar benefits from the oil and gas industry?

[newb]

I will probably get flamed for this one but here it goes. The current housing crunch is really not because of gas prices. It is actually pretty independent of the oil prices.

6-8 years ago (give or take a few) federal interest rates dropped to all time lows. When the rates were low people bought into houses that cost much more than they could afford at higher rates increasing the average price. Lenient qualification requirements coupled with even lower rate ARM mortgages meant that everyone could buy a house. Builders went crazy and the market was flooded with homes and buyers. Kind of like a feeding frenzy.

Fast forward to now. Interest rates have gone up marginally but all of those ARM mortgages are going from that great low 3% to the 6-7% or higher rates that were in the fine print of that 4 year ARM. Your house payment just jumped from 1200 to 3300 a month. Couple that with the higher cost of living and the foreclosures start to stack up.

You owe 400k for your house but the identical one down the street just sold as a foreclosure for 290k. Guess what your house is now worth. You can't afford to make the payment. Your 110k upside down. Your only option is to let it foreclose. Rinse and repeat a few hundred thousand more times and you have our current housing situation.

As I said, I do believe that oil and gas prices are getting ridiculous. When I started driving in Nc at 16 I paid 89 cent a gallon and thought a dollar was high. I just don't like when people blame everything the price of gas. Yes it is responsible for a lot but lets give credit where credit is due. Federal control of a lot of programs has led to this situation. Not just gas prices.

[gsnyder828]

I will probably get flamed for this one but here it goes. The current housing crunch is really not because of gas prices. It is actually pretty independent of the oil prices.

Nah, you shouldn't get flamed for it - you're right on. It has almost nothing to do with fuel prices.

It is related in one area though - both oil prices and the housing bubble/collapse involve(d) speculation. I never did understand why people chose an ARM when fixed rates were at 40 year lows... where could the rate go but up?

We had the dot bomb bubble, the housing bubble - and now recently I've heard some opine that energy is the next bubble that will pop. Dunno if it's true - we'll see I guess. 8)

[Raggedy]

So Glen, what you are really saying is that.... You and your company are indirectly responsile for the oil companies charging what they do? All because your company price gouges everything you sell to them for record profits? Maybe your CEO and company as a whole should be in the "target sites" of the "tree huggers" to help reduce, your outrageous profits and the cost of overhead in big oil companies? Therefore reducing our cost at the pump by how much????
Here's another piece of jerky to gnaw on. What were all the causes we have been fed by the media for price increaese? 9/11, Hurricanes damaging pipelines in the gulf, etc. Are those pipelines fixed? Why are prices still high? Just throwing it out there.
I like the facts that back up the answers too!! Speculation goes on for days but paper facts solidify arguments so much better.

[Tumbleweed]

Alright, this is a very interesting topic but lets lay off bashing the Mechanics Hourly Rate. I want to see anybody who is upset with $100 a labor hour fix there own car. When you are done messing things up, call me and I'll fix it in 1/10th the time it took you to mess it up and I'll charge you $100 a labor hour and when I'm done you will thank me and have a smile on your face. :D

And also lay off the guy who drives a F350 37 miles to work and on his way to work stops off at Starbucks and gets a Chai Frap and a Pumpkin Loaf. That guy is me on my way to my job charging everybody $100 a labor hour.

And just so you know. In my shop the average Mechanic Flags 1 labor hour per every hour he works. This is an average. Some flag more, some less. So in the long run it all equals out.

Alright, enough from me. Get back to your Oil discussion. I would add to it but I am way lost in your debate. Although I will say everybody has made some really good points and I am unconvinced to pick any side.

[cu260r6]

Can anyone name an industry that got better after the government got involved AND explain how such involvement would produce similar benefits from the oil and gas industry?

Requiring seat belts in every vehicle has significantly reduced fatalities per mile drive
Requiring mandatory attendance in school up to 16 has all but banished illiteracy
Requiring infant vaccination has decreased infant and child mortality tremendously
The Clean Air Act and Clean Water Act have drastically reduced pollutants even with increased economic activity
...All productive results of increased regulation.

As I pointed out above the only step that can be taken now to have both a significant and immediate impact on energy prices is greater regulation on the trade of oil and who is licensed to buy/sell it.

"In 2001 the percentage of speculators (those that don't use the oil they buy) that had a license to bid on oil commodities was only 27%. After deregulation of the licensing procedures by Republicans in Congress in 2003 this percentage began to rise sharply, and speculators now make up 81% of the oil commodities market. The rise in the price of a barrel of oil has tracked the rise in speculators in the commodities market. Reimplementing tighter controls would significantly reduce the price of oil."

Recent heightened scrutiny of the trading of oil has already produced proof of manipulation: http://money.cnn.com/2008/07/24/markets/cftc/index.htm?cnn=yes

Defending the profits of Big Oil in comparison to different industries is disingenuous. There are few industries that have such a significant impact on our economy and national security as the energy industry. Just as we regulate certain research companies and defense contractors in what they can disclose and the contracts they can make Big Oil should also be open to regulation becuase they too have a significant impact beyond their industry that the pharmaceutical or insurance industries don't have.

[The GECCO]

So Glen, what you are really saying is that.... You and your company are indirectly responsile for the oil companies charging what they do? All because your company price gouges everything you sell to them for record profits?

No, no, just saying that the media point to the oil companies as the bad guys because of the volume of profit they make, when there are other companies out there that are making much higher profit margins, but those companies aren't vilified because making them the target doesn't serve the proper agendas.

[The GECCO]

Can anyone name an industry that got better after the government got involved AND explain how such involvement would produce similar benefits from the oil and gas industry?

Requiring seat belts in every vehicle has significantly reduced fatalities per mile drive
Requiring mandatory attendance in school up to 16 has all but banished illiteracy
Requiring infant vaccination has decreased infant and child mortality tremendously
The Clean Air Act and Clean Water Act have drastically reduced pollutants even with increased economic activity
...All productive results of increased regulation.
All valid points, but you didn't satisfy the second part of my request. These regulations have nothing to do with controlling how much money a company is allowed to make on it's product, which is what is being suggested here.


As I pointed out above the only step that can be taken now to have both a significant and immediate impact on energy prices is greater regulation on the trade of oil and who is licensed to buy/sell it.

"In 2001 the percentage of speculators (those that don't use the oil they buy) that had a license to bid on oil commodities was only 27%. After deregulation of the licensing procedures by Republicans in Congress in 2003 this percentage began to rise sharply, and speculators now make up 81% of the oil commodities market. The rise in the price of a barrel of oil has tracked the rise in speculators in the commodities market. Reimplementing tighter controls would significantly reduce the price of oil."
This is also valid, and I agree with you and am all for limiting or eliminating the speculators. But again, this has nothing to do with regulating how much the oil companies are allowed to make (as others have suggested), it has more to do with taking out all the middlemen that buy and sell the product before it makes it to market.

[cu260r6]

I agree that a simple price control or other regulation aimed directly at the profits of Big Oil is ill targeted and would likely have adverse consequences, and I don't know of a single policy maker advocating such an approach.

However, forcing energy companies to take a different path than they would without regulation can be productive. For example, in CO all utility companies must produce 20% of their energy from renewable sources by 2020. We were the first state in the nation to implement such a requirement and several have followed suit since. This will add a small amount to energy costs in the short term, but the long term savings to consumers will be many times that amount. Without this requirement it would have taken energy companies in CO much longer to diversify their energy sources.

[kangsoh]

I think there are a couple points that people sometimes neglect to see with regards to how the oil & gas industry actually works in contrast/comparison to other industries. Let me see if I can add a bit more to chew on in forming your opinions about the issue:

Many point to the fact that while demand has steadily increased for the refined products of oil & gas, there has been no problem for the industry to meet this increase in demand, and therefore there must be a cartel (OPEC/petroleum corporations) that are artificially restraining production in order to control market prices. As a result, the upward trend in prices is a result of this "artificial" market control, and can be simply solved by mandating (through legislation or other force) a loosening of supplies and increasing production.

What this doesn't factor in is that the reason why production has been able to keep pace with demand isn't because there is necessarily a excess of oil sitting in the ground somewhere that is a simple matter of turning on a tap in order to get to. The primary reason why the industry has been able to meet demand is because of advances in refining technology ("cracking" for those that care) that increase the net production of consumer grade product (gas/diesel) from a given quantity of oil. Simply put, we are finding ways to get more from what we are already producing, and not necessarily putting more oil into the system- an increase in net output. This of course doesn't come free, and takes a lot of smart people, in a lot of labs, in a lot of places with a lot of equipment to research and develop the processes that result in refined product output. Where does this money come from? As in any other industry, it's paid for by the profits generated by the sale of their products (gas).

Additionally, at the increased prices that people are paying for at the pump for gas, people are wont to assume that all this "profit" is lying idle in the coffers of oil corporations to pay for vacation homes, fancy cars, and trips abroad. What they aren't seeing is the actual costs incurred by these firms to continually replenish what has been pulled from the ground. This is a critical point, as not only is it more expensive to locate and extract previously un-produced reservoirs of oil and gas as those locations become more and more sparse, but the competition between oil and gas companies to locate them drive up the costs to acquire rights to explore/produce as well.

Look for example at where oil and gas is coming from today, as opposed to a decade ago. With the known reservoirs that are closest to the surface depleted, or close to being so today, we are forced to drill deeper and in harder to reach locations than was possible even a few years ago in order to maintain a level of production that matches demand on the market. The ability to drill to these depths comes with advancements in drilling technology, which requires money to implement. This again, comes from the profits of oil and gas companies.

So, what does this all mean? It basically boils down to this- people like to look at the current situation and say "Well, if I was paying $x for gas a couple years ago, and that same gallon is now costing me $y- for the same product as before (after all it's all gas, isn't it?), then the difference must solely be in the amount of profit that they're making off of me." Unfortunately, it ignores the basic reality of the facts stated above- it's simply more expensive to produce the same amount of gas now than it was a few years ago.

Drilling for a target at 12,000ft below ground isn't the same as drilling for something a few hundred feet below ground. The analogy is something akin to drinking a soda in an ice-filled glass through a straw. When the glass is full of fluid, it's easy to stick your straw anywhere in the glass and draw off a mouthful of soda. However, as the volume of liquid in the glass decreases, you have to move your straw around more and more (deeper) within the ice to be able to get a mouthful of soda. That effort to move the straw around through the ice becomes more difficult the deeper into the glass you go- you're putting more work into getting the same mouthful of soda than you were before.

That analogy is similar to the way drilling for oil goes. You know that there are reservoirs out there, but the manpower and equipment (cost) associated with reaching them has been prohibitive up until now. "Now" being the point at which the price of oil can pay for the technology and labor required to successfully drill to those locations/depths and still turn a profit. That's why you see this mad scramble among companies to return to drilling in the Gulf of Mexico or to try to extract oil from shale on the Western Slope- it's because the price of oil is high enough where it's economically feasible, not because they're trying to capitalize on the high market price. It's very much the difference between someone saying that they're going to do something because they are able to do so without losing money on the process, vs someone doing something to capitalize on another person's dependence on that product (profiting vs profiteering).

Oil, unlike a lot of natural resources, isn't self-replenishing, can't be recycled or reused, and doesn't have an analog (substitute) that is as cost efficient, and readily available. Once we use up the oil in the ground, it's gone. We can't grow/make/breed/recycle any more of it. So you take something such as oil, which EVERYONE needs, and even more so now that you have emerging industrial nations with large populations that are becoming mobile (think the US in the "car boom" of the 40's & 50's), and you add all those new consumers for the product in addition to everyone already using what's available now.

What's going to give? Many scientists believe in the "peak oil" theory- that the rate of discovery for major untapped reservoirs (Arabian Peninsula, North Sea, Siberia, North Slope Alaska), is shaped like a bell curve, with the peak of discoveries already having occurred. This leads us to the inevitable conclusion (regardless of where we actually are on that curve) that at some point, we won't be able to find any more oil, and we'll all have to share what's left. That's where we find ourselves right now. More people wanting a share of what's left over. In a free market, it all comes down to who's willing to pay for the right to use those resources.

We'd love to believe that the federal government could mandate that the oil and gas industry redistribute or reduce their profits to match some sort of largely arbitrary "fair" amount. To what end? So we mandate Exxon give us oil for what we deem to be a fair price. They turn around and take their product and sell it to someone somewhere else that is willing to pay what they're asking for to cover their business costs and we end up on the short end of the stick. It also puts American companies on a distinct disadvantage as it restricts their ability to generate the capital required to advance their exploration and production on par with other oil and gas companies (many of whom are state-sponsored).

Like Glen said, it's a matter of record what each of these companies spend year-in and year-out on their operations. If you're bored sometime, take a look and see exactly how much it costs to run a company Exxon's size. Just because their net profits show shockingly large numbers, doesn't mean that all that money goes into someone's pocket. That cash has to go back into the company to allow it to replenish what was pulled out of the ground in the previous year, so that they can continue to meet demand going forward.

Hope this sheds a bit more light on things.... :)

[cu260r6]

Your reasoning, and the general thinking in the energy industry, is exactly why some say increased regulation is necessary. First, you claim energy production was so much eaiser just a few years ago, so why did the industry not see this difficulty comming? If oil companies cannot have the foresight to develop a working business plan beyond 5-10 years then our nation can hardly trust our security and energy needs to such bad planning. Fiancial anaylsists agree as they downgraded Exxon stock, and it fell 4.7% after announcing thier earnings.

Second, you claim that the increased difficulty in development is the cause of high energy prices. The drastic rise in gas prices is not corrolated to the gradual increase in difficulty of development. Oil didn't suddnely become 3 times as costly to extract in the past 4 years.

Alll of your assertions about reinvesting profits and this industry being so unique are directly contridricted by oil companies' own actions. After earning record profits in the second quarter of this year Exxon spent 8 billion buying back thier own stock to increase its value and 2 billion giving thier shareholders greater dividends. They only spent 7 billion on reinvestment and only a few milllion of that when to alternative energy technologies.

[newb]

One of the things many people overlook is that the majority of the oil we use in this country comes from other countries. Much like any business for profit, if we lessen our dependence on their product, they will lessen the amount made available to the world market. Lets not forget that supply and demand, in this case, is outside of our control. In many ways the oil prices aren't driven by US demands either. China's current growth rate and industry are sucking up a lot of oil and steel. We can all agree that CEO salaries are ridiculous. But oil CEO salaries are probably right in line with other major companies although you will never find accurate numbers that account for bonuses and incentives. Given the amount of time, dedication, and sacrifice (not to mention school) that it takes to become the CEO of an exxon or other major company, i can understand why they command the salaries they receive. I don't like it, but I understand.

[T Baggins]

Ah Ha! I finally found some fault in Kanger's argument... he says:


Oil, unlike a lot of natural resources, isn't self-replenishing...

FALSE and Misleading!!! According to WikiAnswers:

Oil was formed hundreds of millions of years ago when areas of Canada and adjacent seas were covered by shallow oceans. Over a period of millions of years, the remains of marine animals and plants fell to the sea floor. They accumulated in thick layers and eventually were covered by layers of sand and silt. Over time, the immense weight of all of these layers compressed the lower layers into sedimentary rock. Bacterial actions, heat, and pressure converted the remains of the animals and plants into oil.

So, in theory (and assuming history repeats), if we just wait this price thing out a couple hunderd million years we'll have a fresh reserve of oil just waiting to be tapped and refined. :lol:

Sorry, couldn't resist.

I'm all for the regulating of speculators - that might be the one thing we all can agree on, and could make a meaningful impact, that would be short of price-regulation.

[The GECCO]

Sorry for beating a dead horse, but this article makes some good points about the taxation side of the argument.

http://online.wsj.com/article/SB121780636275808495.html?mod=most_emailed_day


What Is a 'Windfall' Profit?
August 4, 2008
The "windfall profits" tax is back, with Barack Obama stumping again to apply it to a handful of big oil companies. Which raises a few questions: What is a "windfall" profit anyway? How does it differ from your everyday, run of the mill profit? Is it some absolute number, a matter of return on equity or sales -- or does it merely depend on who earns it?

Enquiring entrepreneurs want to know. Unfortunately, Mr. Obama's "emergency" plan, announced on Friday, doesn't offer any clarity. To pay for "stimulus" checks of $1,000 for families and $500 for individuals, the Senator says government would take "a reasonable share" of oil company profits.


Mr. Obama didn't bother to define "reasonable," and neither did Dick Durbin, the second-ranking Senate Democrat, when he recently declared that "The oil companies need to know that there is a limit on how much profit they can take in this economy." Really? This extraordinary redefinition of free-market success could use some parsing.

Take Exxon Mobil, which on Thursday reported the highest quarterly profit ever and is the main target of any "windfall" tax surcharge. Yet if its profits are at record highs, its tax bills are already at record highs too. Between 2003 and 2007, Exxon paid $64.7 billion in U.S. taxes, exceeding its after-tax U.S. earnings by more than $19 billion. That sounds like a government windfall to us, but perhaps we're missing some Obama-Durbin business subtlety.

Maybe they have in mind profit margins as a percentage of sales. Yet by that standard Exxon's profits don't seem so large. Exxon's profit margin stood at 10% for 2007, which is hardly out of line with the oil and gas industry average of 8.3%, or the 8.9% for U.S. manufacturing (excluding the sputtering auto makers).

If that's what constitutes windfall profits, most of corporate America would qualify. Take aerospace or machinery -- both 8.2% in 2007. Chemicals had an average margin of 12.7%. Computers: 13.7%. Electronics and appliances: 14.5%. Pharmaceuticals (18.4%) and beverages and tobacco (19.1%) round out the Census Bureau's industry rankings. The latter two double the returns of Big Oil, though of course government has already became a tacit shareholder in Big Tobacco through the various legal settlements that guarantee a revenue stream for years to come.

In a tax bill on oil earlier this summer, no fewer than 51 Senators voted to impose a 25% windfall tax on a U.S.-based oil company whose profits grew by more than 10% in a single year and wasn't investing enough in "renewable" energy. This suggests that a windfall is defined by profits growing too fast. No one knows where that 10% came from, besides political convenience. But if 10% is the new standard, the tech industry is going to have to rethink its growth arc. So will LG, the electronics company, which saw its profits grow by 505% in 2007. Abbott Laboratories hit 110%.

If Senator Obama is as exercised about "outrageous" profits as he says he is, he might also have to turn on a few liberal darlings. Oh, say, Berkshire Hathaway. Warren Buffett's outfit pulled in $11 billion last year, up 29% from 2006. Its profit margin -- if that's the relevant figure -- was 11.47%, which beats out the American oil majors.

Or consider Google, which earned a mere $4.2 billion but at a whopping 25.3% margin. Google earns far more from each of its sales dollars than does Exxon, but why doesn't Mr. Obama consider its advertising-search windfall worthy of special taxation?

The fun part about this game is anyone can play. Jim Johnson, formerly of Fannie Mae and formerly a political fixer for Mr. Obama, reaped a windfall before Fannie's multibillion-dollar accounting scandal. Bill Clinton took down as much as $15 million working as a rainmaker for billionaire financier Ron Burkle's Yucaipa Companies. This may be the very definition of "windfall."

General Electric profits by investing in the alternative energy technology that Mr. Obama says Congress should subsidize even more heavily than it already does. GE's profit margin in 2007 was 10.3%, about the same as profiteering Exxon's. Private-equity shops like Khosla Ventures and Kleiner Perkins, which recently hired Al Gore, also invest in alternative energy start-ups, though they keep their margins to themselves. We can safely assume their profits are lofty, much like those of George Soros's investment funds.

The point isn't that these folks (other than Mr. Clinton) have something to apologize for, or that these firms are somehow more "deserving" of windfall tax extortion than Big Oil. The point is that what constitutes an abnormal profit is entirely arbitrary. It is in the eye of the political beholder, who is usually looking to soak some unpopular business. In other words, a windfall is nothing more than a profit earned by a business that some politician dislikes. And a tax on that profit is merely a form of politically motivated expropriation.

It's what politicians do in Venezuela, not in a free country.

[bluedevil]

Sorry for beating a dead horse, but this article makes some good points about the taxation side of the argument.

http://online.wsj.com/article/SB121780636275808495.html?mod=most_emailed_day


What Is a 'Windfall' Profit?
August 4, 2008
The "windfall profits" tax is back, with Barack Obama stumping again to apply it to a handful of big oil companies. Which raises a few questions: What is a "windfall" profit anyway? How does it differ from your everyday, run of the mill profit? Is it some absolute number, a matter of return on equity or sales -- or does it merely depend on who earns it?

Enquiring entrepreneurs want to know. Unfortunately, Mr. Obama's "emergency" plan, announced on Friday, doesn't offer any clarity. To pay for "stimulus" checks of $1,000 for families and $500 for individuals, the Senator says government would take "a reasonable share" of oil company profits.


Mr. Obama didn't bother to define "reasonable," and neither did Dick Durbin, the second-ranking Senate Democrat, when he recently declared that "The oil companies need to know that there is a limit on how much profit they can take in this economy." Really? This extraordinary redefinition of free-market success could use some parsing.

Take Exxon Mobil, which on Thursday reported the highest quarterly profit ever and is the main target of any "windfall" tax surcharge. Yet if its profits are at record highs, its tax bills are already at record highs too. Between 2003 and 2007, Exxon paid $64.7 billion in U.S. taxes, exceeding its after-tax U.S. earnings by more than $19 billion. That sounds like a government windfall to us, but perhaps we're missing some Obama-Durbin business subtlety.

Maybe they have in mind profit margins as a percentage of sales. Yet by that standard Exxon's profits don't seem so large. Exxon's profit margin stood at 10% for 2007, which is hardly out of line with the oil and gas industry average of 8.3%, or the 8.9% for U.S. manufacturing (excluding the sputtering auto makers).

If that's what constitutes windfall profits, most of corporate America would qualify. Take aerospace or machinery -- both 8.2% in 2007. Chemicals had an average margin of 12.7%. Computers: 13.7%. Electronics and appliances: 14.5%. Pharmaceuticals (18.4%) and beverages and tobacco (19.1%) round out the Census Bureau's industry rankings. The latter two double the returns of Big Oil, though of course government has already became a tacit shareholder in Big Tobacco through the various legal settlements that guarantee a revenue stream for years to come.

In a tax bill on oil earlier this summer, no fewer than 51 Senators voted to impose a 25% windfall tax on a U.S.-based oil company whose profits grew by more than 10% in a single year and wasn't investing enough in "renewable" energy. This suggests that a windfall is defined by profits growing too fast. No one knows where that 10% came from, besides political convenience. But if 10% is the new standard, the tech industry is going to have to rethink its growth arc. So will LG, the electronics company, which saw its profits grow by 505% in 2007. Abbott Laboratories hit 110%.

If Senator Obama is as exercised about "outrageous" profits as he says he is, he might also have to turn on a few liberal darlings. Oh, say, Berkshire Hathaway. Warren Buffett's outfit pulled in $11 billion last year, up 29% from 2006. Its profit margin -- if that's the relevant figure -- was 11.47%, which beats out the American oil majors.

Or consider Google, which earned a mere $4.2 billion but at a whopping 25.3% margin. Google earns far more from each of its sales dollars than does Exxon, but why doesn't Mr. Obama consider its advertising-search windfall worthy of special taxation?

The fun part about this game is anyone can play. Jim Johnson, formerly of Fannie Mae and formerly a political fixer for Mr. Obama, reaped a windfall before Fannie's multibillion-dollar accounting scandal. Bill Clinton took down as much as $15 million working as a rainmaker for billionaire financier Ron Burkle's Yucaipa Companies. This may be the very definition of "windfall."

General Electric profits by investing in the alternative energy technology that Mr. Obama says Congress should subsidize even more heavily than it already does. GE's profit margin in 2007 was 10.3%, about the same as profiteering Exxon's. Private-equity shops like Khosla Ventures and Kleiner Perkins, which recently hired Al Gore, also invest in alternative energy start-ups, though they keep their margins to themselves. We can safely assume their profits are lofty, much like those of George Soros's investment funds.

The point isn't that these folks (other than Mr. Clinton) have something to apologize for, or that these firms are somehow more "deserving" of windfall tax extortion than Big Oil. The point is that what constitutes an abnormal profit is entirely arbitrary. It is in the eye of the political beholder, who is usually looking to soak some unpopular business. In other words, a windfall is nothing more than a profit earned by a business that some politician dislikes. And a tax on that profit is merely a form of politically motivated expropriation.

It's what politicians do in Venezuela, not in a free country.


Interesting article. I think what they fail to point out (or cant point out) is that the 8% is a number... Is it real? How many Accounting exects are on staff at Exxon or any other oil company.. or any other company mentioned on that list.? Lots, several, many, tons, etc. Remember in the society that we have become there are rules more so "guidelines" for accounting. As long as you are with in those guidelines (marginally) than your considered legit or "Generally Accepted" Does that mean accurate? No... Does that mean that they only made 8% profits? No.. They could have made negative amounts and so they would not tank, fiddled the numbers until it said a respectable number... or on the flip side, fiddled with numbers until it showed a mear 8% so the country wouldnt riot itself when they published a profits of 500% (ficticious number used for the purpose of making a point) my point is that if your numbers are to high for profit or you want to alter them to make it look less profitable, are there options? yup.. spend money and label them costs. pay a ridiculous salary to an exec and call it a cost. yada yada Short of it is, that remember what you read in financial reports or published for Wall Street is not reality.


Lastly to address the article's question as to why dont they tax Google or any other company on that list that has a higher percent of profit than oil companies?
Well my answer (opinion) would be because Google and GE are not single handedly inpacting the economy to such a magnatude that Exxon is. If Google goes kaboom the economy will not even feel it. It will be a blip on the radar so to speak. No one HAS to use Google or buy a GE product, but "most" have to buy gas, oil or some product that is directly inpacted in price by oil and gas. thus the reason its the number 1 target by media and government.

[The GECCO]

These are all publicly held companies, meaning that their books are open to their shareholders and other officials for examination. The shareholders would benefit more from higher profits, and if what you are suggesting was actually going on it would make a seriously juicy story. Based on those things, I would bet that if it were going on, it would have been exposed by now.

As far as having a product that people have to buy, what about the other, more basic necessities? Are the clothing companies making too much profit? What about Rainbow Bread? Or the housing construction giants?

I agree with what you say about their product having a demonstrably direct effect on the economy and most peoples lives, I just don't agree that that fact should allow them to be singled out for different treatment.

They have a product, they provided enough of the product in different forms that over the last century other product makers (auto manufacturers, furnace companies, plastics manufacturers, etc, etc) incorporated it into their business models, and as a result a large part of the market now demands the product. I call that good business sense!

I guess the main thing is that as much as I hate paying these gas prices, I don't feel like I have been taken advantage of by the oil companies any more than I feel I've been duped by any other company whose products I purchase.

On another side note, on another forum where this is being discussed someone pointed out this sentence:
Between 2003 and 2007, Exxon paid $64.7 billion in U.S. taxes, exceeding its after-tax U.S. earnings by more than $19 billion.
So, over that time period the US government profited $19 billion MORE than Exxon did, and Exxon did all the damn work! Who's taking advantage of who here?

[bluedevil]

Im not proposing a conspiracy in the books.. Im just saying that reality and what Wallstreet gets are not the same for MOST big corporations. not just oil. Plus its just my opinions.

About the clothing one: Tony touched on that earlier about having the abilty to choose a lesser brand of jeans and paying 8 bucks at Kohls or Walmart for jeans or ~30 for Levi's elsewhere. at least there is a choice. In the case of gas to choose.. U can choose which station and save a few pennies a tank... but in the end, you cant save half or better by choosing a lesser known brand.....

As far as the Gov taking advantage on taxes of the oil companies comment you made. I have no rebuttal and in fact agree, heck its why the government wants prices to remain high. :wink:

[The GECCO]

I'm just gonna start my own country so I can run the government and tax everything in sight! Then I'll be rich! :lol:

[cu260r6]

When one political party takes in 80% of the donations from the oil industry it’s safe to assume Big Oil’s interests are being looked after by that party. Consider this the next time you hear one party championing more drilling and higher oil company profits: http://www.opensecrets.org/industries/indus.php?Ind=E01 or McCain
http://www.washingtonpost.com/wp-dyn/content/article/2008/07/26/AR2008072601891.html?nav=rss_politics

That article posted above contains several misleading
assumptions.
1.Despite the vague questions and assertions in the first two paragraphs Obama’s plan offers concrete specifics. The Windfall tax would only be levied against the top grossing oil companies and only if oil exceeded $90 per barrel thereby giving any company an incentive to keep the price low.

2.None of the revenue from the windfall tax would go to “stimulus” checks. In fact, Obama has not advocated for any future stimulus checks than the ones passed in April. Obama’s plan calls for $150 billion in revenue over the next 10 years to be directed at renewable energy research and foreign oil independence. Since the energy companies have shown no ability to develop alternative technologies themselves there is no other way to force energy independence from foreign oil fast enough than through publically funded research.

3.The $64.7 billion the article cited as taxes paid does not count the $14 billion they received in tax breaks and subsidies. How can anyone justify subsidising an industry so royally screwing those that work for a living.

4.The focus on the percentage of profit is misleading. The revenue of Exxon almost DOUBLED from the same quarter last year. Of course you're going to be taxed more when your revenue goes up so drastically.

5.The comparison to GE, tech companies, and other industries is ridiculous for one very important reason. The oil industry doubled their revenue, but created very few new jobs. Companies like GE especially expand their workforce in similar rates as their revenue expands. As I pointed out earlier, and Dion mentioned, the oil industry has a unique impact on the national security and economic security of our nation, so they are subject to increased safeguards.

The mark of a fool is to do the same thing and expect different results. Unless we change something that will have a substantial impact nothing is going to change at the pump. The same old rhetoric of trust the oil companies, they'll do the right thing, isn't working anymore.

[froth]

When one political party takes in 80% of the donations from the oil industry it’s safe to assume Big Oil’s interests are being looked after by that party. Consider this the next time you hear one party championing more drilling and higher oil company profits: http://www.opensecrets.org/industries/indus.php?Ind=E01 or McCain
http://www.washingtonpost.com/wp-dyn/content/article/2008/07/26/AR2008072601891.html?nav=rss_politics

That article posted above contains several misleading
assumptions.
1.Despite the vague questions and assertions in the first two paragraphs Obama’s plan offers concrete specifics. The Windfall tax would only be levied against the top grossing oil companies and only if oil exceeded $90 per barrel thereby giving any company an incentive to keep the price low.

2.None of the revenue from the windfall tax would go to “stimulus” checks. In fact, Obama has not advocated for any future stimulus checks than the ones passed in April. Obama’s plan calls for $150 billion in revenue over the next 10 years to be directed at renewable energy research and foreign oil independence. Since the energy companies have shown no ability to develop alternative technologies themselves there is no other way to force energy independence from foreign oil fast enough than through publically funded research.

3.The $64.7 billion the article cited as taxes paid does not count the $14 billion they received in tax breaks and subsidies. How can anyone justify subsidising an industry so royally screwing those that work for a living.

4.The focus on the percentage of profit is misleading. The revenue of Exxon almost DOUBLED from the same quarter last year. Of course you're going to be taxed more when your revenue goes up so drastically.

5.The comparison to GE, tech companies, and other industries is ridiculous for one very important reason. The oil industry doubled their revenue, but created very few new jobs. Companies like GE especially expand their workforce in similar rates as their revenue expands. As I pointed out earlier, and Dion mentioned, the oil industry has a unique impact on the national security and economic security of our nation, so they are subject to increased safeguards.

The mark of a fool is to do the same thing and expect different results. Unless we change something that will have a substantial impact nothing is going to change at the pump. The same old rhetoric of trust the oil companies, they'll do the right thing, isn't working anymore.

.02 from here:
1. If I make a great deal of money working my butt off doing floors and take all the risks, would I be taxed a bit more, after paying my taxes. I don't like the prices I'm paying, but we haven't built a new refinery in about three decades. Heck, the Bass brothers were ruling American Speedway when the last one went up.
2. Forcing a business to invest capital in something with no guarantees makes as much sense as telling a resteraunt owner which clientelle to cater to.(read, go F*** yourself smoking NAZIs, but that's for a different time).
3. I tend to agree here. Quit subsidising things, and they tend to work themselves out.(back to smoking, and I don't even smoke! Geeze.)
4. Revenue doubles, so do taxes paid, or more. Now, adding on to that just because someone made more money due to an external authority not allowing them to invest in a different part of their own industry (refine the stuff where???).
5. Increasing restrictions and putting up roadblocks to an industry then bitching about the end result (yes, a mess) sounds like, dare I say it. POLITICIANS!!

Well. I'm spent, I think I'll head down and enjoy racing at the bar and grill.

[gsnyder828]

When one political party takes in 80% of the donations from the oil industry it’s safe to assume Big Oil’s interests are being looked after by that party. Consider this the next time you hear one party championing more drilling and higher oil company profits: http://www.opensecrets.org/industries/indus.php?Ind=E01 or McCain
http://www.washingtonpost.com/wp-dyn/content/article/2008/07/26/AR2008072601891.html?nav=rss_politics

That article posted above contains several misleading
assumptions.
1.Despite the vague questions and assertions in the first two paragraphs Obama’s plan offers concrete specifics. The Windfall tax would only be levied against the top grossing oil companies and only if oil exceeded $90 per barrel thereby giving any company an incentive to keep the price low.

2.None of the revenue from the windfall tax would go to “stimulus” checks. In fact, Obama has not advocated for any future stimulus checks than the ones passed in April. Obama’s plan calls for $150 billion in revenue over the next 10 years to be directed at renewable energy research and foreign oil independence. Since the energy companies have shown no ability to develop alternative technologies themselves there is no other way to force energy independence from foreign oil fast enough than through publically funded research.

3.The $64.7 billion the article cited as taxes paid does not count the $14 billion they received in tax breaks and subsidies. How can anyone justify subsidising an industry so royally screwing those that work for a living.

4.The focus on the percentage of profit is misleading. The revenue of Exxon almost DOUBLED from the same quarter last year. Of course you're going to be taxed more when your revenue goes up so drastically.

5.The comparison to GE, tech companies, and other industries is ridiculous for one very important reason. The oil industry doubled their revenue, but created very few new jobs. Companies like GE especially expand their workforce in similar rates as their revenue expands. As I pointed out earlier, and Dion mentioned, the oil industry has a unique impact on the national security and economic security of our nation, so they are subject to increased safeguards.

The mark of a fool is to do the same thing and expect different results. Unless we change something that will have a substantial impact nothing is going to change at the pump. The same old rhetoric of trust the oil companies, they'll do the right thing, isn't working anymore.

Wow :roll: - direct from the hyper-partisan playbook.

In the order you detailed them:

1. What are the concrete specifics you allude to? What net income % is considered a windfall? How many of the "top grossing" - one? two? all of them? top 5? It's vague. Even your attempt to clarify is murky as pond water.

2. You are wrong. Your favorite site must not have updated yet - but Barack's is. Direct from Obama's site (underlines added by me):

http://my.barackobama.com/page/community/post/stateupdates/gG5klN


Senator Obama today unveiled an Emergency Economic Plan, following news of rising unemployment and a struggling economy. The proposed plan would take the excess profits of oil companies to help working families deal with energy costs in the form of new $1,000 rebate checks, and would enact a $50 billion economic stimulus package to jump-start job creation and help local communities that are struggling due to our economic downturn.
3. So the government is up by $50B. Fine. They're still up by $50B. And I agree - let's get rid of the subsidies... but let's be fair about it. Let's cut subsidies for farmers too - they're earning record $$ recently with the uptick in the price of grains, etc. No one seems to be complaining about that though - other than to erroneously blame it on the Oil companies.

4. The focus on the percentage is NOT misleading. Focusing on the flat dollar value is - which is precisely why that's the only number being reported in the media. Revenue doubling has NOTHING to do with taxes - businesses are not taxed on revenue (in fact - if you've got a basic understanding of economics you realize that businesses are NOT taxed at all - the consumer is via pass-through of costs, but that's another discussion). Focusing on the percentage illustrates that while revenues increased - so did associated costs. You want to understand the numbers a bit deeper - go look at the year on year progression of the gross profit margin - that's total production costs (no write downs or large CEO salaries included, nor is exploration included) divided by total revenues. When it stays flat - then the company is merely passing along increased costs incurred. Which is exactly what will happen with any windfall profit tax - it will add $$ at the pump.

5. This is not ridiculous. The creation of few jobs is true - but points to increased material costs as the primary driver, which is supported by the fact that production dropped. When GE or others increase revenue - typically it follows a growth in business volume (i.e. production). The reason Exxon's stock took a beating when they announced the #'s is b/c the investors understand that the outlook of lower production is not a good trend - and that the increased revenues are not the result of increased volume or efficiency and didn't translate to better returns.

The mark of a fool is someone who speaks as though he/she is an expert on a subject of which they know nothing. The mark of insanity is to do the same thing over and over and expect different results (longstanding Deming quote). You're clearly no fool, nor insane - but please, go easy on the partisan propoganda. Keep that stuff for the Dungeon. And bone up on your economics.

And one last thing. The Oil & Gas industry donated roughly $18.5M so far this year. You are correct that ~80% (76% if you'd like to be accurate) went to Republicans. Attoney's and Law firms have donated almost an order of magnitude more ($142.6M) in the same period to democrats by the same proportion (75% to dems). So we're beating up the bad oil companies for putting republicans in their pocket while the lawyers make sure the democrats are in their pocket 10x - to drive more complex laws and regulations to ensure that they continue some true windfall profits due to the increase in litigation, etc. Wonderful. Not too politically expedient to point out though - is it?

[cu260r6]

Look at the energy industry’s political donations that I posted. You’re right, this IS a very partisan issue, I know motorsports is a really conservative sect, but C’mon, where else can we argue about politics until we’re blue in the face but on the interweb? :D

1.So your only question is which oil company is defined as reaping windfall profits? Are you afraid this is going to put to large a burden on the mom and pop oil companies pumping oil out of their backyards? :lol: The windfall would be dictated by the price of oil, not % of net income as I already stated.

2.The Congressional Research Service has concluded: “[T]o the extent that a surtax on the corporate income of crude oil producers on their upstream operations could approximate such a [pure corporate profits] tax, this would not raise crude oil prices and would not increase petroleum imports in the short run. While the current corporate income tax is not a pure corporate profits tax, a surtax for oil companies would arguably be an administratively simple and economically effective way to capture estimated oil windfalls in the short run.” [Emphasis added, “The Crude Oil Windfall Profits Tax of the 1980s: Implications for Current Energy Policy,” Congressional Research Service, 3/9/06, p. 32.]

We can argue about the term your want to refer to it as, but the “stimulus” is part of a permentant tax rebate, not a simple handout. It’s the equivalent of a tax cut, not an entitlement. From Obama’s site: “This relief would be a down payment on Obama’s long-term plan to provide middle-class families with at least $1,000 per year in permanent tax relief.” That article WAS mislead as it implied a handout.

3.You honestly believe that of doubling of revenue will have no effect on the profits of a company as large as Exxon or its tax base? The past decade in the oil industry has proven that exact correlation correct. Passing on the costs of corporate tax is debatable. The CBO recently concluded that reducing the federal gas tax or the subsidies to oil companies directly would have a negligible effect on the price of oil because the industry would not pass the benefits onto consumers when they’re making out like robber barons already. As I posted above many experts conclude the opposite is true as well, that a windfall profits tax would not be passed onto consumers at the pumps.

4.The outlook of lower production is the fault of a shortsighted energy industry. They concluded that through their support of Republicans they could count on increased access to drilling whenever demand increased beyond their capacity. This has led to little investment in alternative technologies or any long term solutions. This is exactly why a different solution is necessary because the energy industry will never find one on their own.

5.Your numbers regarding political donations are way off and seem to ignore an obvious fact. The oil industry has given $18 million in federal contributions (not including PAC and Lobbyists and state contributions) contributions through the last FEC reporting period on June 30th while lawyers gave $83 million in total donations. Note: Lawyers are the second largest group supporting Republicans. http://www.opensecrets.org/industries/mems.php You seem to forget there are only a few thousand oil executives (at most) in the US while there are 1.2 million practicing lawyers. Remember, corporate donations are illegal, so it comes down to individuals. Given that the oil industry’s influence is still vastly disproportionate to their numbers. Finally, lawyers are not the ones I’m feeling the pain from every time I go to the pump or the grocery store, so stop distracting from the real issue with this red herring.

You obviously disagree with any solutions I've offered, so what's yours? The only alternative I hear is: do more of the same, expect different results, drill, drill, drill.

Lets hear your defense of these windfall profits: http://www.cnn.com/2008/POLITICS/08/05/iraq.oil/index.html

[bluedevil]

** This is a civil discussion and Im hoping will remain that way. Your views as well as all others are respected and entitled to be put here but if your comments become personal and diected toward someone personally, they are not welcome here. (No offense intended) and I realize Im not the internet police. but I dont want a great intelligent discussion like this on a topic that is so important, to be closed because someone insulted someone or their opinions. **

Moving on;
to adress Mr Roth's issue about him making profits on flooring and should he be hit harder? Answer = No simply for the same reason stated several times. Your company does not directly and so significantly inpact the total US economy and the lives of 99.9% of the people living in it.... There for no. If the price of your floors affected the price of milk and bread for my family, and my job or lack of having one, or the ability for my grandma to afford to buy her meds and still own a vehicle to drive to her doctor visit, then the answer would be yes.

Subsidies; This is deffinately not an area I know much about so I will not state anything there other than Im not sure why, unless it was to assist with alternative fuel source exploration or building of additional refineries or home land extraction of our own oil. But as stated Im not an expert on the topic NO one here is, so Im simply addressing my opinions Same as everyone else.

Gecco: So if you were to own your own country and tax the heck out of everything, would that make you a DIC ------ TATOR ? :wink:

[froth]

Dion:

While I pretty much disagree with your take on windfalls, I like the fact that you put the reasons in black and white terms. I hope I didn't come off as attacking anyone, as I am enjoying this thread and try not to do that TOO much.

Not to hijack this, but is anyone going to the DNC? I'd really enjoy reading how one of ours sees participation in this (okay not really jacking, as it's rather tightly tied in).

Cheers!

[gsnyder828]

Look at the energy industry’s political donations that I posted. You’re right, this IS a very partisan issue, I know motorsports is a really conservative sect, but C’mon, where else can we argue about politics until we’re blue in the face but on the interweb? :D

Fair enough - but we hear enough partisan stuff on the tv every night, it would be nice to discuss it without resorting to cookbook platform positions.

And I won't quote the whole thing to save some space.

1. My question is where's the line on defining "windfall profits" (in a hard # or %age) and why won't that apply to every industry? I know why - b/c it's a politicized issue that's being used to gather votes from people who believe the demonization of the oil industry without knowing/digging into the true issue. I don't think the oil folks are saints - but I don't think they should be treated differently than any other industry.

2. "In the short run" is pretty key to that argument.


the “stimulus” is part of a permentant tax rebate, not a simple handout. It’s the equivalent of a tax cut, not an entitlement.

I never said it was an entitlement, nor did the article. It's functionally the same plan that Bush had with his stimulus checks. It's a gimick - regardless of who initiates it.

3. I didn't say that doubling revenue would have no effect on profits or tax base. I said that companies are not taxed on revenues, as you originally stated.
Of course you're going to be taxed more when your revenue goes up so drastically.
Example: If a company is operating on a breakeven basis - and it's primary material/cost driver (a steel mill would be a good example) doubled in price, then their output would (approximately) double in price. The market price would adjust accordingly (assuming a competitive market - like steel processing) and the company would still be breakeven. No change in profits, no change in taxes ($0 taxes in both cases), but double the revenue. Of course if a company in the same example (or Exxon) is making a profit - say 10% - and the same happens, then their profit after the related price increases would also be ~10%. The dollar value of the revenues, profits and taxes would double - but here's the kicker - so would the dollar value of the working capital needed to run the business, so the company would have to raise more capital and the return on invested capital stays the same. It's effectively a net wash... that company is no more attractive to an investor than it was before.

And I agree - removal of the gas tax would not likely effect the price of gas, but that has little to do with the big oil companies, and more to do with an effect on supply/demand at the pump. And it's a stupid idea... McCain bungled that one for sure. I also, as I stated, agree with removal of subsidies. But again - let's get rid of them for other industries too. And while we're at it - let's cut subsidies on the arts too. That should be privately funded IMO. Science subsidies can stay - they have a real impact on our country's economic and defense positions.

4. I mentioned the lowered production not to place blame on anyone - but to point out that the increased revenues are not based on an expanding business, which was the error in your GE parallel.

5.
Your numbers regarding political donations are way off

:lol: Really? Interesting. I pulled them right from the site you linked (opensecrets.org).

They're accurate - at least as accurate as those in your original argument. If they're inaccurate - then it's likely they're inaccurate to your benifit.

My point in pulling in the lawyers was this - it's a matter of perspective -what the oil industry is giving to the republicans is a relatively small amount in the big picture (though the $$ values do sound big when taken by themselves), so cries of republicans being "in the pocket" are a bit disengenious. Besides, we all know who's giving to the republicans. That's no mystery. They're in the pocket of lots of corporations, and democrats are in the pocket of unions, far-left agenda orgs., and lawyers. There are regulations that require appropriate disclosure for all members of public companies. All industries that give primarily to republicans are out in the open - available for anyone who's interested to see. That's not the case with the democrats. Lawyers and law firms are (conveniently - since they wrote the law) not subject to such tranparency. At least not that I can find - I'd appreciate any sources though!

It's also worth pointing out - again for pespective - that the Oil and Gas industry is 18th on the list of top industries donating to congress. It's also worth pointing out that the top recipients of donations from the top 20 industries are democrats 90% of the time. Again - straight from your site.


You obviously disagree with any solutions I've offered, so what's yours? The only alternative I hear is: do more of the same, expect different results, drill, drill, drill.

Actually I don't, b/c honestly I haven't seen many solutions from you. I'm not particularly partisan - but I am a free market guy. My proposal, on energy prices only, would be to do more than blame and punish oil companies, fund alternatives and hope. 1) I agree that regulation on oil speculators is an appropriate move - as they're more to blame here than the oil companies and frankly, they don't add much value to the supply chain. 2) I think that wind and solar should be invested in through SBIR and STTR funding channels via the DOE and other orgs. When it's developed to the point of being economically viable - it will take hold 3) I think we need to build more infrastructure around nuclear power 4) Continue to invest in technologies to clean emmissions of coal fired power plants 5) Open up some drilling - but protect the more natural, pristine areas (Ted Kennedy's view is not one of them). 6) Most importantly - and some of the above will help - we need a plan to improve the value of the dollar, something I've not heard much about - but is one of the largest contributors to the current price of oil.

Oh, and people should properly inflate their tires. Check with your trackside vendor for the correct pressure based on conditions.

[gsnyder828]

** This is a civil discussion and Im hoping will remain that way. Your views as well as all others are respected and entitled to be put here but if your comments become personal and diected toward someone personally, they are not welcome here. (No offense intended) and I realize Im not the internet police. but I dont want a great intelligent discussion like this on a topic that is so important, to be closed because someone insulted someone or their opinions. **


:?: Where did this come from? I haven't seen a single personal insult levied (other than calling Kang a terrorist, of course) :D

[cu260r6]

So you're a free market guy who wants more regulation of speculators in the commodities market and more tax dollars used for investment in research through government agencies? :D You say tomato I say tomato, so lets move on and address something new, like your "solutions."

Republicans in both chambers of Congress have stopped anti-speculation bills so far, and the President has threatened to veto them: http://www.washingtonpost.com/wp-dyn/content/article/2008/07/30/AR2008073002088.html

Instead they want increased drilling which Bush's own Depart of Energy says will do absolutely nothing: http://www.eia.doe.gov/oiaf/aeo/otheranalysis/ongr.html
"The projections in the OCS access case indicate that access to the Pacific, Atlantic, and eastern Gulf regions would not have a significant impact on domestic crude oil and natural gas production or prices before 2030."

http://www.time.com/time/business/ar...815884,00.html
"Even if tomorrow we opened up every square mile of the outer continental shelf to offshore rigs, even if we drilled the entire state of Alaska and pulled new refineries out of thin air, the impact on gas prices would be minimal and delayed at best. The reason is simple: the U.S. has an estimated 3% of global petroleum reserves but consumes 24% of the world's oil. Offshore territories and public lands like ANWR that don't allow drilling may contain up to 75 billion barrels of oil, according to the EIA. That may sound like a lot, but it's not enough to make a significant difference in a world where global oil demand is expected to rise 30% by 2030, to nearly 120 million barrels a day. At best, greatly expanding domestic drilling might eventually lower the proportion of oil the U.S. imports — currently about 60% of its total supply — but petroleum is a global commodity, and the world market would soak up any additional American production."

[gsnyder828]

So you're a free market guy who wants more regulation of speculators in the commodities market and more tax dollars used for investment in research through government agencies? :D

Shades of gray.

Things are only black and white on college campuses and in politicians' offices. :wink:

[gsnyder828]

lets move on and address something new, like your "solutions."

Republicans in both chambers of Congress have stopped anti-speculation bills so far, and the President has threatened to veto them

Instead they want increased drilling which Bush's own Depart of Energy says will do absolutely nothing

At best, greatly expanding domestic drilling might eventually lower the proportion of oil the U.S. imports — currently about 60% of its total supply — but petroleum is a global commodity, and the world market would soak up any additional American production."

I snipped out some stuff - again for size, not for my arguments.

I don't argue that the current gov't is completely gridlocked and inept. That's on both sides of the aisle, though.

The last statement is worth commenting on though - switching to more domestic production may not impact world prices, but it would impact the value of the dollar - and that would have an impact on the price we pay for oil. So there is some merit to the idea.

And I must've missed it - where did you say what your plan is?

[The GECCO]

Things are only black and white on college campuses and in politicians' offices. :wink:

Man, isn't that the truth....

[gsnyder828]

I keep telling my wife "I speak the truth!" but somehow she's not buying it... at least now I can tell her that Glen agrees. Maybe that'll carry more weight.

:lol:

[cu260r6]

switching to more domestic production may not impact world prices, but it would impact the value of the dollar - and that would have an impact on the price we pay for oil. So there is some merit to the idea.

That's a misnomer as well. As I substantiated above any increased domestic production would not be seen for 10+ years, so the effect on the dollar would not happen for a decade at least. Any predicted effect on such a long term is speculatory at best.

As for the actual impact you may not be considering the greater effect that conservation and research would have on the dollar. If instead of investing in new domestic production we invested in renewable and green technology development we would have innovative technologies to sell to the rest of the world, the value of which would far exceed the value of our oil.

[gsnyder828]

switching to more domestic production may not impact world prices, but it would impact the value of the dollar - and that would have an impact on the price we pay for oil. So there is some merit to the idea.

That's a misnomer as well. As I substantiated above any increased domestic production would not be seen for 10+ years, so the effect on the dollar would not happen for a decade at least. Any predicted effect on such a long term is speculatory at best.

A misnomer? Hardly - not even in the definition.

And while the 10 year number is debated - I'll give it you, cause I'm a nice guy and b/c I don't need it. Let's accept that it'll take 10 years before we see a rise in production. Better 10 years than never, which is the never explicitly stated option. And - as I'm sure you know - the price of oil is not only set by pure supply/demand, but also by anticipated future supply and demand (even if speculators are regulated, they won't be erradicated - nor should they be, the futures market is an important lever in stabilizing prices), so the effects would be seen much sooner than 10 years.


As for the actual impact you may not be considering the greater effect that conservation and research would have on the dollar. If instead of investing in new domestic production we invested in renewable and green technology development we would have innovative technologies to sell to the rest of the world, the value of which would far exceed the value of our oil.

Really? Greater than the value of oil? Far exceeding? I hadn't heard that - perhaps you could site specifics (and please - not from a far-left blog) preferably from an industry source?

Like I said - I'm all for alternatives - but only if they're economically viable. There's not a lot of market elasticity in energy delivery - so real impetus has to be there for the consumer to switch. The current gas prices are starting things - and I'm well aware that those who push only solar/wind actually prefer high gas prices b/c it moves the consumer faster in their direction, regardless of the effect on the economy. Any initiatives to reduce the price of gas only lessens demand for solar/wind - hence the current democratic agenda.

Problem is - there's no basis for claiming that wind and solar are on the right part of the technology curve to be in a position to be viable in 5 years, 10 years or 20 years, that's not how technology development works. Great ideas often die b/c they come about long before the market is ready for them. Throwing billions at research may help - but it's no guarantee that we won't still need the same amount of oil in 10 years, so then where's the "no drill" policy gotten us?

And again - what were your proposed solutions, I missed them and can't seem to find them in anything above. Am I to assume that you are a pure party player and don't have a single position of your own?

[dave.gallant]

Am I to assume that you are a pure party player and don't have a single position of your own?

Yes.

It is much easier to burp up popular opinion than research your own.

[gsnyder828]

Yes.

It is much easier to burp up popular opinion than research your own.

Well, I've got to give him credit - he's certainly well researched on the party platform.

You're not actually reading all this - are you?

[dave.gallant]

Yes.

It is much easier to burp up popular opinion than research your own.

Well, I've got to give him credit - he's certainly well researched on the party platform.

You're not actually reading all this - are you?

Absolutely.

[The GECCO]

but it's no guarantee that we won't still need the same amount of oil in 10 years, so then where's the "no drill" policy gotten us?

Exactly. Even if it would take 10 years (which is not the case, but I'll stipulate for arguments sake), that's not a reason to not do it now, that's the reason it should have been done 10 years ago.

[gsnyder828]

that's the reason it should have been done 10 years ago.

Indeed, it's all Bush's fault.

Wait-a-minute... who was in office 10 years ago again? Maybe we should blame him.

[cu260r6]

haha, do you know who placed the inital ban on drilling on the Outer Continental Shelf? It was that tree hugging liberal President George HW Bush. How again is this Clinton's fault?

(working on a reply to your earlier post, but don't have time right now)

[gsnyder828]

haha, do you know who placed the inital ban on drilling on the Outer Continental Shelf? It was that tree hugging liberal President George HW Bush.

He did that while governor of Texas? Impressive - democrats must've loved him!

But wait - I thought he was in big-oil's pocket. Now your "republicans are all lackies for the oil industry" argument falls apart - and I wasn't even picking at it. :lol: \:D/

Ah well, I'm outta here to prep for the weekend. See you on your new hybrid bike I hope!

[cu260r6]

I've totally lost you. Bush 41 was never Gov. of Texas.

[The GECCO]

Geoff, George HW is George W's dad. And he did place a moratorium on offshore drilling, though it was rather redundant. See, there were TWO federal bans on offshore drilling - executive (by the President) and legislative (by the Congress). The Congressional ban has to be renewed every year, and it has been renewed every year since it's inception in 1981. It was already well established in 1990 when Bush 41 instituted the executive ban.

Neither is permanent. As I said, the legislative ban has to be renewed every fiscal year, meaning it will expire Sept 30th if not renewed, and the executive ban can be lifted by the current President at any time. As a matter of fact, it was already lifted on July 14th of this year. So, only the legislative ban still stands.

The executive ban was put in place when oil was $25/barrel. Circumstances change, we need to change with them. The President already has, let's see what Congress will do...or, let's see if they will have the votes to override the inevitable VETO of their bill to renew the ban.

[cu260r6]

The point of blaming Clinton for either ban is totaally without merit though.

There's also a third ban which is more relevant to this conversation. The proposed legislation in Congress would only remove the federal congressional ban. Almost every coastal state currently has thier own ban on offshore drilling and few to none of these will be lifted as most coastal states' populations are strongly opposed to it. For example no Gov. of FL has ever been elected without promising not to allow offshore drilling. The point is even if you guys get what you're asking for it still won't lead to anything substantial.

[bluedevil]

Things are only black and white on college campuses and in politicians' offices. :wink:

Man, isn't that the truth....


College campuses are the biggest racket going. Even worse than oil, but thats a different discussion. sorry for straying off topic.



Am I to assume that you are a pure party player and don't have a single position of your own?

Yes.

It is much easier to burp up popular opinion than research your own.


Sadly if you do your own research on any party, you will end up being no party ! They all suck, it usualy comes down to the lesser of 2 evils and the country is to chicken s**t to elect a 3rd party player that might actually make this country a better place.





Indeed, it's all Bush's fault.

Wait-a-minute... who was in office 10 years ago again? Maybe we should blame him.

Its not 1 persons fault even though we like to blame the moron in office... its a series of events, mistakes, if you will that have got us into this position. If the Pope was in office right now as the Pres of the US, the Americans would have made him the fall guy. (NOT to say Bush doesnt suck, he does. BUT he isnt the single and only person who got us in this, however he has done a lot to intensify the effects that have been a long time coming)


So here are some contiubutory events that may help start in the right direction (which Im sorry to say I dont think we will solve this on this discussion, but we have good times trying)

Step 1: Get us the hell out of war. We are fighting a war and spending billions with a sad exit plan with no valid date in mind. We spend billions to repair a country sitting on $80 Billion in oil money they can use to repair their own damn country.

Step 2: Sh*t or get off the pot in Afgan. Get Binladen or dont. so in essence I guess step 2 is also get us the hell out of war.

Step 3: Impeach Bush for his getting us into war under false pretenses (amoug other things) cough: WMD cough: (Though I guess that would be futile anyway since by the time it occurred we would already have a new President in office)

Step 4: (Better foreign policy) Mind own own damn business. We have our nose is so many others business, we dont even know what the hell we are doing in our country. stop spending money to fix other countries and lets spend a little to fix our own.

Step 5: Thats pretty much where we are in this discussion: Lower oil prices? Have more or less Gov involvement in gas and oil price and policy? Drill more or less? on our own soil or buy from others? Free market (on oil) or not? Find alternative sources for fuel or keep head in sand and drill drill drill? At this point I will add in my apparently infamous ... because this really is an ongoing thought or process............ :wink:

[gsnyder828]

Geoff, George HW is George W's dad.

D'oh! :oops: if I'd stopped to read... I'd've seen the H

I knew W lifted the exec ban - didn't know he did/didn't put it in place and was just playin' with cu360 for missing the "if we'd done something 10 years ago" tongue in cheek.

8)