NationStates Jolt Archive

I think we've reached a watershed on NSG, where more people than not understand that a news report of gross revenue doesn't mean the same thing as profit.

Wow!

Either that, or the manga was too absorbing and y'all missed the news.

I think we've reached a watershed on NSG, where more people than not understand that a news report of gross revenue doesn't mean the same thing as profit.

Wow!

Either that, or the manga was too absorbing and y'all missed the news.

missed it

Either that, or the manga was too absorbing and y'all missed the news.

Or, we just don't watch the "news" you watch.

If an oil company can't make a profit now, then it's run by a bunch of idiots.

Exxon sells oil ...oil has risen to record levels as a commodity....Exxon along with ALL other oil sellers make tons of cash because of this....:rolleyes:


This is news ?


Its more like ...well DUH....

I think we've reached a watershed on NSG, where more people than not understand that a news report of gross revenue doesn't mean the same thing as profit.

Wow!

Either that, or the manga was too absorbing and y'all missed the news.
Uhm, that 10.whatever billion was the quarterly profit figure, not gross revenue. At least it was called profit in the Reuters story I saw.

What's funny is that people also seem to believe that stocks are something only held by the rich.

Well, a lot of people in the US have 401k plans, which are not the investment vehicle of the rich. It's the investment vehicle of the middle class.

If Exxon doesn't make a profit, it screws the middle class.

How about that?

$1,318: The profits earned every second by Exxon in the second quarter.

This is, to be fair, just shy of being a record. The company's profit is only the second biggest ever reported by a US company. The first biggest is the $10.7 billion earned by Exxon in the fourth quarter of 2005.

I think we've reached a watershed on NSG, where more people than not understand that a news report of gross revenue doesn't mean the same thing as profit.

Wow!

Either that, or the manga was too absorbing and y'all missed the news.
oh gee i didnt see the report on gross revenue.

sorry

i must have been too absorbed in the report of profits to notice.

but what is there to say beyond.....gee they made alot of money?

From http://www.marketwatch.com/News/Story/Story.aspx?guid={D7E09311-652A-41CA-A722-448688F978DC}&siteId=google

The Irving, Texas-based giant said net income for the three months ended June 30 rose to $10.36 billion, or $1.72 a share, from $7.64 billion, or $1.20 a share a year ago. On an adjusted basis, excluding items, the company earned $7.84 billion, or $1.23 a share, in last year's second quarter.

oh gee i didnt see the report on gross revenue.
but what is there to say beyond.....gee they made alot of money?
Nothing, other than to say that their stockholders are happy...

Gross revenue is not the same as profit by definition. We arent idiots.

What's funny is that people also seem to believe that stocks are something only held by the rich.

no. they believe that stock ownership is so concentrated with the rich that talking about the negligible amount held by everyone else is almost always basically a red herring.

no. they believe that stock ownership is so concentrated with the rich that talking about the negligible amount held by everyone else is almost always basically a red herring.

The amount in mutual funds, 401k plans, etc., is not negligible, nor is it a red herring.

Maybe back in 1970 it was. But not now.

Pfft. I'm not getting rich, so it's not my concern.

The amount in mutual funds, 401k plans, etc., is not negligible, nor is it a red herring.

Maybe back in 1970 it was. But not now.

yes, it is. stock is held almost entirely by the richest 10% (and a simple majority is held by the richest 2% or so), with everybody else sharing a few crumbs in their pitiful "retirement portfolios" - though the next 10% probably have a halfway proportional share at this point. so is this 'middle class' you speak of part of the richest 10% of the country? or are they the next richest 10%?

I think we've reached a watershed on NSG, where more people than not understand that a news report of gross revenue doesn't mean the same thing as profit.

Wow!

Either that, or the manga was too absorbing and y'all missed the news.


Corporation actually turns a profit.
I'm appalled, right?
:p

What the hell. Why is this such a big deal? We're so spoiled in America that we get all rowdy about high gas prices (which are in fact, lower than what Canada and Europe are already paying) and curse 'Big Oil' and then hop in our 14 mpg Ford F-150s.

As far as I'm concerned, Exxon is just doing its job. Can't blame them for making a profit if people are still willing to pay those prices instead of driving less, driving more efficiently or buying cars with better mileage.

Uhm, that 10.whatever billion was the quarterly profit figure, not gross revenue. At least it was called profit in the Reuters story I saw.
Reporters are the most ignorant people, in general. If you read the SEC filings, you can see that Reuters was wrong. The true profit was about 10%. Not bad, but not great, either.

People forget that Exxon is a huge company, and huge companies turn giant nominal profits; their profit margin is only 10%, which means 90 cents out of every dollar is reinvested in order to keep revenues growing. Here's the thing: Cisco systems has a profit margin of 40%, which means 40 cents out of every dollar are not spent but are stashed away. Were they the same size as Exxon, their profits would be $40 billion.

Another thing is that people refuse to cut back on their fuel consumption. I call bullshit every time someone tries to argue that US consumers are hurt by high gas prices and they've cut back as much as they can because it's not reflected in reality. I still see tons of SUVs on the road, I still see tons of traffic on weekends, and I still see tons of cars with only the driver in them.

All Exxon is doing is supplying the product at the price the market has decided. Their control over the price of oil is literally nonexistent.

Oil companies don't make profits, silly! :)

yes, it is. stock is held almost entirely by the richest 10% (and a simple majority is held by the richest 2% or so), with everybody else sharing a few crumbs in their pitiful "retirement portfolios" - though the next 10% probably have a halfway proportional share at this point. so is this 'middle class' you speak of part of the richest 10% of the country? or are they the next richest 10%?

Mutual funds have assets of $9.45 trillion dollars. That's 45% of the entire market capitalization of the NYSE; the remaining 55% is divided amongst individual shareholders, hedge funds, and corporations.

Even so, retirement portfolios are an individual responsibility. No one deserves blame for not having money to retire other than the individual's own irresponsibility.

If an oil company can't make a profit now, then it's run by a bunch of idiots.

No, idiots run oil quite well, actaully. look at George WB.;)

What the hell. Why is this such a big deal? We're so spoiled in America that we get all rowdy about high gas prices (which are in fact, lower than what Canada and Europe are already paying) and curse 'Big Oil' and then hop in our 14 mpg Ford F-150s

Another interesting thing is that $3/gallon is the price gas should be if it had kept up with general inflation since 1913.

Here's the really funny thing: The percentage of their income Americans spend on gas is only half of what it was in the 1960's, when gas cost $0.33/gallon. That means Americans would have to pay at least $6/gallon for gas to have the same share of income as it did in the 1960's. Were we to pay the same share as we did in the 1920's, it would have to be $10/gallon. And despite such high energy expenditures, during the 1960's the US economy had one of its strongest expansions ever with 3.9% unemployment and 4% GDP growth.

Also: Why wasn't anyone outraged when oil fell to $10/barrel? Hundreds of thousands of oil industry workers had their retirement funds decimated and of them at least 100,000 directly lost their jobs because of the price collapse!

If an oil company can't make a profit now, then it's run by a bunch of idiots.

It'll get a lot harder.

The cost of producing oil is rising at a faster and faster rate which means the amount of profit from each barrel of oil will grow steadily less. Eventually, that will result in curtailed production; that leads to rising retail prices which in turn result in falling demand. Ultimately, they can't turn a profit and they have to either diversify or go bankrupt.

What the hell. Why is this such a big deal? We're so spoiled in America that we get all rowdy about high gas prices (which are in fact, lower than what Canada and Europe are already paying) and curse 'Big Oil' and then hop in our 14 mpg Ford F-150s.

As far as I'm concerned, Exxon is just doing its job. Can't blame them for making a profit if people are still willing to pay those prices instead of driving less, driving more efficiently or buying cars with better mileage.
Exactly!

It never ceases to amaze me how many people bitch about gas prices while riding around in SUVs or Minivans or Pickups! You want to pay less for gas? Get a mini! I know I'm in Canada and our prices are higher, but that means Americans are even MORE whiny about this than we are!

Exxon is a company selling a product. That product is in demand by people. The price rises to meet that demand. If you want cheaper gas, use less of it and reduce the demand.

Oh, and I find this interesting: http://www.aynrand.org/site/News2?page=NewsArticle&id=12593&news_iv_ctrl=1223
and
http://www.aynrand.org/site/News2?page=NewsArticle&id=12499&news_iv_ctrl=1223

It never ceases to amaze me how many people bitch about gas prices while riding around in SUVs or Minivans or Pickups! You want to pay less for gas? Get a mini! I know I'm in Canada and our prices are higher, but that means Americans are even MORE whiny about this than we are!

Exactly! There are a lot of inexpensive options when it comes to fuel efficient cars; I see no reason why most people who could afford a $50,000 SUV can't afford to either sell it or stick it in the garage and drive a mini as their main car. Obviously, high gas prices are not hurting them as much as their whining suggests because changes in driving habits have been minimal at best.

It'll get a lot harder.

The cost of producing oil is rising at a faster and faster rate which means the amount of profit from each barrel of oil will grow steadily less. Eventually, that will result in curtailed production; that leads to rising retail prices which in turn result in falling demand. Ultimately, they can't turn a profit and they have to either diversify or go bankrupt.
These companies are marketing energy, it just happens that oil is the most saleable form of energy. As the ability to profit from oil decreases, companies like Exxon and Chevron will start selling something else.

These companies are marketing energy, it just happens that oil is the most saleable form of energy. As the ability to profit from oil decreases, companies like Exxon and Chevron will start selling something else.
Yes, that's how I see the situation. My only worry is whether or not they will be able to channel their resources into more effective energy sources in time to prevent an economic collapse.

These companies are marketing energy, it just happens that oil is the most saleable form of energy. As the ability to profit from oil decreases, companies like Exxon and Chevron will start selling something else.

That's correct. It's one of the main reasons why companies like BP and Chevron are going in to biofuels, solar, and wind energy; Exxon lags their progress but it's possible that they are waiting for the best time to enter the market. It's also interesting that BP/Chevron have smaller profit margins then Exxon; such pressures might come earlier than later for them

We do have to remember that oil still has 15-20 years of production growth before it peaks and declines, so it's possible that there might still be a few oil price declines that will make alternative energy investments in to (temporary) losers.

Yes, that's how I see the situation. My only worry is whether or not they will be able to channel their resources into more effective energy sources in time to prevent an economic collapse.

They won't, but other companies will. The kind of growth we're seeing in alternative energy shows me that such a transition will come fairly mildly. The only places that will have problems will be the ones who don't adapt to the changing energy picture.

Who said the war wasn't about oil? A three year old article from the Guardian:
http://www.guardian.co.uk/oil/story/0,11319,947859,00.html

I'm not so left that I feel this is the only reason we went to war but...

Mutual funds have assets of $9.45 trillion dollars. That's 45% of the entire market capitalization of the NYSE; the remaining 55% is divided amongst individual shareholders, hedge funds, and corporations.

and?

Who said the war wasn't about oil? A three year old article from the Guardian:
http://www.guardian.co.uk/oil/story/0,11319,947859,00.html

I'm not so left that I feel this is the only reason we went to war but...

The only problem is that the war doesn't add a lot to the price of oil; even the most generous estimates of the "terror premium" (including Iraq but also things like Nigeria/Venezuela/Iran) is only $20, placing oil at a healthy $50 per barrel and gasoline at $70. US and Chinese/Indian demand drive the price of oil, not the war. Also, Iraq's oil production has returned to prewar levels; it's far below its levels before the first Gulf War but back to where it was in 2003. In fact, the amount of production lost in Nigeria alone is equal to 25% of Iraq's oil production, so it's not really coming from that region in the first place.

One of the strategies behind the Iraq war was to have a US-friendly nation with extensive oil supplies that could give us leverage in OPEC; since influence in the group is relative to proven reserves, Iraq's gigantic proven and unproven resources would have given us another Saudi Arabia that could cajole the group in to making decisions friendly to the US. It had nothing to do with profits or business, just geopolitics.

and?

So about 50% of stock is owned indirectly or directly through the middle class. The stock market is far more open to average Americans than it was 30 years ago.

If you're looking for a place where the wealthy dominate, look at commodities. But then again, ETFs are starting to change that as well although it is still a rich man's market.

So about 50% of stock is owned indirectly or directly through the middle class. The stock market is far more open to average Americans than it was 30 years ago.

the numbers i'm looking at are from this decade - apparently the rich-but-not-super-rich have mutual funds. or else the 'middle class' refers to a very tiny segment of the population.

I think we've reached a watershed on NSG, where more people than not understand that a news report of gross revenue doesn't mean the same thing as profit.

Wow!

Either that, or the manga was too absorbing and y'all missed the news.

Or maybe we know that since they control the Government there's nothing we can do by whining about it. Except hate them, which I do often.

The only problem is that the war doesn't add a lot to the price of oil; even the most generous estimates of the "terror premium" (including Iraq but also things like Nigeria/Venezuela/Iran) is only $20, placing oil at a healthy $50 per barrel and gasoline at $70. US and Chinese/Indian demand drive the price of oil, not the war. Also, Iraq's oil production has returned to prewar levels; it's far below its levels before the first Gulf War but back to where it was in 2003. In fact, the amount of production lost in Nigeria alone is equal to 25% of Iraq's oil production, so it's not really coming from that region in the first place.

One of the strategies behind the Iraq war was to have a US-friendly nation with extensive oil supplies that could give us leverage in OPEC; since influence in the group is relative to proven reserves, Iraq's gigantic proven and unproven resources would have given us another Saudi Arabia that could cajole the group in to making decisions friendly to the US. It had nothing to do with profits or business, just geopolitics.
So, the war in Iraq and Bush have nothing to do with 240% increase in the price of oil since 2001?

the numbers i'm looking at are from this decade - apparently the rich-but-not-super-rich have mutual funds. or else the 'middle class' refers to a very tiny segment of the population.

Most of the stock ownership is in the 4th and 5th quintiles; the remaining 60%own almost no stock. The upper middle class owns most of the mutual fund shares while the wealthy invest through direct ownership or hedge funds; hedge funds account for 30% of stock trades on an average day.

So, about 85-90% of stock in any form is owned by the 4th or 5th quintile.

Oil companies don't make profits, silly! :)

Kind of hard when you do things like give one person a 500 million retirement package.

Well, of course they do. It costs the oil companies a much smaller amount than the price to produce a barrel of oil, but they don't control the price of oil any more than we do. If it costs Pledgeria Oil $13 a barrel to get it out of the ground, but I can get $75 on the open market, then hells yeah I'm going to have record revenue.

That being said, it'd be nice if they used some of that record revenue and profit to start building more oil refineries and ethanol refineries.

Yes, such a small number of Americans have any investments or interest in the profits of publicly held companies:

An estimated 53.3 million U.S. households owned mutual funds as of July 2003, down
from 54.2 million in May 2002 (Figure 1).

Household mutual fund owners represented 47.9 percent of all U.S. households in July 2003,
compared with 49.6 percent in May 2002.

Based on a survey of 3,007 randomly selected U.S. households conducted in July 2003. The standard error is +/-1.8 percent at the 95 percent
confidence level. The sample was weighted to match the age distribution of the U.S. population. Survey data were not weighted before 1997.
The number of U.S. households owning mutual funds in 2003 is based on the U.S. Census Bureau’s most recent estimate of 111.3 million
total U.S. households.

Ownership includes mutual funds held in variable annuities.
The number of individuals owning mutual funds declined to 91.2 million in July 2003 from 94.9 million in May 2002 (Figure 2).
An estimated 36.4 million U.S. households, or 32.7 percent of all U.S. households, held mutual funds in employer-sponsored retirement plans.

So, the war in Iraq and Bush have nothing to do with 240% increase in the price of oil since 2001?

Oil's price rise started in 1999 when OPEC began to curtail its production following the price collapse of oil in 1998; notice that oil prices actually fell during the first year of the war when Iraq's oil production took its steepest dive, and the biggest oil price increase was in 1999 at 145%.

1999:+145% OPEC curtails production
2000:+0% World economy slows, oil production soars at over 2x demand due to OPEC production boost
2001:-41% 2001 worldwide recession/9-11 attacks reduce oil demand
2002:+84% Chinese oil demand soars, world/US economy rebounds, oil production falls
2003:-12% Chinese economy slows, oil production soars to record level
2004:+45% World oil demand grows at fastest pace in over two decades, hurricanes damage US platforms, problems in Venezuela and Nigeria
2005:+36% Chinese economy rebounds with double digit oil demand growth, Hurricanes Katrina+Rita cripple Gulf oil production, world economy grows 4.5%
2006:+18% Middle East concerns, Nigerian/Venezuelan production shut-ins, Chinese oil demand hits record, Iraq production returns to prewar levels, OPEC oil production climbs to record, Indian demand accelerates

Notice that the years with the biggest price increases both occured before the war; the effect on world oil production was marginal at best and was quickly absorbed by rising production elsewhere.

World oil demand has risen by an average 1.5% from 1999-2006; however, production has not kept up with demand because of the falling oil prices during the 90's. It can take up to 10 years for a major oil project to come on line, but 10 years ago oil prices were falling and the economics of investment simply didn't justify new projects. We're in a drought of new production that stems from the cheap oil of the 1990's.

That being said, it'd be nice if they used some of that record revenue and profit to start building more oil refineries and ethanol refineries.

They are building oil refineries, just not in the US. However, they do expand existing US refineries, which adds the equivalent capacity of a new refinery each year. Nevertheless, US demand is rising faster than new capacity so we have to import more and more refined products.

It's simply too difficult to do so here due to the laws, regulations and public opposition to such projects; the only new refinery in the US, the Arizona Clean Fuels in Yuma, has been working through permits and regulations for 15 years. They'd rather build gigantic refineries in countries like India, Saudi Arabia, and China than have to go through billions of dollars and a decade of paperwork to build one here.

They are building oil refineries, just not in the US. However, they do expand existing US refineries, which adds the equivalent capacity of a new refinery each year. Nevertheless, US demand is rising faster than new capacity so we have to import more and more refined products.

It's simply too difficult to do so here due to the laws, regulations and public opposition to such projects; the only new refinery in the US, the Arizona Clean Fuels in Yuma, has been working through permits and regulations for 15 years. They'd rather build gigantic refineries in countries like India, Saudi Arabia, and China than have to go through billions of dollars and a decade of paperwork to build one here.
That's good stuff to know, thank you. I honestly don't care where they are built, and I can understand them not wanting to do it in the U.S. It just pisses me off when the response to "high oil prices due mainly to super-tight refinery capacity" becomes "get more oil from Alaska" or something like that.
[/rant]

Oil's price rise started in 1999 when OPEC began to curtail its production following the price collapse of oil in 1998; notice that oil prices actually fell during the first year of the war when Iraq's oil production took its steepest dive, and the biggest oil price increase was in 1999 at 145%.

1999:+145% OPEC curtails production
2000:+0% World economy slows, oil production soars at over 2x demand due to OPEC production boost
2001:-41% 2001 worldwide recession/9-11 attacks reduce oil demand
2002:+84% Chinese oil demand soars, world/US economy rebounds, oil production falls
2003:-12% Chinese economy slows, oil production soars to record level
2004:+45% World oil demand grows at fastest pace in over two decades, hurricanes damage US platforms, problems in Venezuela and Nigeria
2005:+36% Chinese economy rebounds with double digit oil demand growth, Hurricanes Katrina+Rita cripple Gulf oil production, world economy grows 4.5%
2006:+18% Middle East concerns, Nigerian/Venezuelan production shut-ins, Chinese oil demand hits record, Iraq production returns to prewar levels, OPEC oil production climbs to record, Indian demand accelerates

Notice that the years with the biggest price increases both occured before the war; the effect on world oil production was marginal at best and was quickly absorbed by rising production elsewhere.

World oil demand has risen by an average 1.5% from 1999-2006; however, production has not kept up with demand because of the falling oil prices during the 90's. It can take up to 10 years for a major oil project to come on line, but 10 years ago oil prices were falling and the economics of investment simply didn't justify new projects. We're in a drought of new production that stems from the cheap oil of the 1990's.
You might be right and you seem to know more than me on the subject. It just seems dubious to me for obvious reasons.

This is insulting (http://www.conocophillips.com/newsroom/other_resources/energyanswers/gasoline.htm):

Gasoline may seem expensive, but a recent study by the research firm John S. Herold puts gasoline prices in perspective. The study points out, for example, that a popular soft drink sells for the equivalent of about $2.85 a gallon, and a brand name beer about $9.75 a gallon and Visine eye medication about $895 a gallon. The graphic shows how the price of gasoline compares with other processed liquids, based on the EIA's most recent forecast of the average regular gasoline price for the second quarter of 2006.

As if I go to Costco and buy Visine by the gallon. It's used by the drop, so I'd use cost per drop to compare to cost per gallon of gasoline. Usage is a big factor in per capita demand, c.p.

That's good stuff to know, thank you. I honestly don't care where they are built, and I can understand them not wanting to do it in the U.S. It just pisses me off when the response to "high oil prices due mainly to super-tight refinery capacity" becomes "get more oil from Alaska" or something like that.
[/rant]

ANWR is a joke. The amount of oil we can possibly produce from there is nothing compared to the amount we would save from boosting fuel economy, building public transporation, and encouraging alternative fuels/energy and providing funds to research them. The reserve could produce up to 1-2 million bpd; boosting fuel economy to 40 mpg would save 4 million bpd and building public transportation might shave off another 1 million bpd. More telecommuting could even save another few million bpd. From there, alternative fuels and hybrids will eat away at the remaining gasoline demand.

Politicans need to realize that we didn't get cheap oil by drilling our way to it. We got it by conserving and boosting efficiency, and there is no reason why we can't do it again. I see no reason to sacrifice our environment or our remaining reserves for nothing when we can create another Saudi Arabia of oil savings through conservation and alternatives.

You might be right and you seem to know more than me on the subject. It just seems dubious to me for obvious reasons.

Oh, it's dubious but not for the reasons you think. The plans for this war couldn't care less if oil was $10 or $100; oil is oil no matter how cheap it is.

They're not controlling Iraq for profits or to reward oil companies, they're controlling it for geopolitical influence. Iraq has a lot of oil, and if we install a US-friendly regime we gain the voting leverage in OPEC (along with Saudi support) to effectively control 40% of the world's oil production. That control would enable the US to badger a lot of the less enthusiastic governments in to following our geopolitical plans, and that's the motivation for the Iraq war.

My local news reported at noon today that Chevron's profits (their word) were up 36% over last year. Just FYI.

My local news reported at noon today that Chevron's profits (their word) were up 36% over last year. Just FYI.

Oil prices rose about 20% year over year and production rose by 9%, so that accounts for 29% of it. Refined products prices rose about 27%, so that makes perfect sense.

Oil prices rose about 20% year over year and production rose by 9%, so that accounts for 29% of it. Refined products prices rose about 27%, so that makes perfect sense.
Thanks. That's why I just posted what I heard and didn't editorialize. You rock.

BTW, love your sig -- Hedonism-Bot is hilarious, and that was the very last original ep. of Futurama. Here's to it's speedy return.

Thanks. That's why I just posted what I heard and didn't editorialize. You rock.

Earnings releases are too damn boring for most people to read, but I undertook the heroic feat of analyzing the data for the purpose of informing NS General.

BTW, love your sig -- Hedonism-Bot is hilarious, and that was the very last original ep. of Futurama. Here's to it's speedy return.

Thanks, I hoped someone would notice it.:cool:

That was the best episode of Season 4, if not the entire show. There's some great news, however: 13 new episodes and 4 DVD movies are confirmed as being in the pipeline, so Futurama will be back. It's going to air on Comedy Central, so keep an eye out for any news about it.

Oh, it's dubious but not for the reasons you think. The plans for this war couldn't care less if oil was $10 or $100; oil is oil no matter how cheap it is.

They're not controlling Iraq for profits or to reward oil companies, they're controlling it for geopolitical influence. Iraq has a lot of oil, and if we install a US-friendly regime we gain the voting leverage in OPEC (along with Saudi support) to effectively control 40% of the world's oil production. That control would enable the US to badger a lot of the less enthusiastic governments in to following our geopolitical plans, and that's the motivation for the Iraq war.
But there is no connection with the profits Exxon is making? What about the closed meeting with the vice president and the oil executives?

I'm trying to keep the questions basic because it's seriously hard to find information on Exxon without finding information which caters to the two extremes (lovely company and satanic company). What I'm going on is that in every war there are war profiteers. Halliburton is a definite. ExxonMobil seems to be another on the face of it.

When the oil runs out, we'll all be pushed back to the pre-Industrial Revolution era, but we can take solace in watching the oil execs become destitute.

When the oil runs out, we'll all be pushed back to the pre-Industrial Revolution era, but we can take solace in watching the oil execs become destitute.
I doubt it will come to that.

But there is no connection with the profits Exxon is making? What about the closed meeting with the vice president and the oil executives?

It's not unusual for energy companies to be invited to meetings with the President or Vice President; they are allowed and encouraged to give input to any energy policy decisions since those decisions do affect their business. This was to be expected in 2001, when the US was reeling from the natural gas price spike and California energy crises of 2000.

(Actually, if we really want to know who to blame, look no further than GM. It was General Motors that forced lead in to gasoline, ripped out public transportation in major cities, and forced the government to emphasize roads and highways over rails or other mass transit. Our oil dependence was created by car companies, not oil companies.)

I'm trying to keep the questions basic because it's seriously hard to find information on Exxon without finding information which caters to the two extremes (lovely company and satanic company). What I'm going on is that in every war there are war profiteers. Halliburton is a definite. ExxonMobil seems to be another on the face of it.

The only problem is that Exxon doesn't have much to gain from the Iraq war; the rise in oil prices that can be attributed to the war simply isn't big enough to justify their involvement or even their support for it. A $25 billion dollar rise in revenue from the terror premium is dwarfed by the $80 or $90 billion in reconstruction, appropriations, and occupation costs incurred each year as a result of the war. That wouldn't be a bad thing if Exxon wasn't a US corporation; they pay more in taxes than they make in profits off of their US operations, so any jump in spending by the government will inevitably be levied off of them in one way or another.

Also, unlike Halliburton who recieves a share of that $80 billion as part of their contractor work to the military Exxon doesn't get anything; they have no production or exploration rights and no operations in Iraq, so they literally make nothing off of supporting the war other than a small amount off of the terror premium. In fact, the demand destruction caused by high oil prices will ultimately reduce their revenue in the intermediate term; even though demand is still growing, it's growing slower which means less sales and smaller profits.

When the oil runs out, we'll all be pushed back to the pre-Industrial Revolution era, but we can take solace in watching the oil execs become destitute.

Not likely. The only reason we use oil is because it's cheap, not because of some kind of social or economic dependence on it. We waste so much and have so many alternatives right now that we would have to literally try to destroy our economy. Peak Oil will be adapted to, and we will continue to grow and thrive; the only people hurt will be those that refuse to adapt, and I seriously doubt that will be more than a small number of people.

We did it before with coal-to-wood and hunter/gatherer to farmer so we can do it again. Oil is not that abundant a source of energy anymore; it's got a weaker EROEI than coal or wind, and solar, geothermal, tidal and biomass are all catching up. Cellulosic ethanol and algae biodiesel also have huge advantages over oil, and hybrids are taking off; the only barrier to these fuels is that oil is still cheap. Economics rather than energy motivate continued use of oil.

It's far from a powerdown or even a break-even in terms of EROEI.

Well, Vetalia has acquired a new fan... Me. :p

It's not unusual for energy companies to be invited to meetings with the President or Vice President; they are allowed and encouraged to give input to any energy policy decisions since those decisions do affect their business. This was to be expected in 2001, when the US was reeling from the natural gas price spike and California energy crises of 2000.

(Actually, if we really want to know who to blame, look no further than GM. It was General Motors that forced lead in to gasoline, ripped out public transportation in major cities, and forced the government to emphasize roads and highways over rails or other mass transit. Our oil dependence was created by car companies, not oil companies.)



The only problem is that Exxon doesn't have much to gain from the Iraq war; the rise in oil prices that can be attributed to the war simply isn't big enough to justify their involvement or even their support for it. A $25 billion dollar rise in revenue from the terror premium is dwarfed by the $80 or $90 billion in reconstruction, appropriations, and occupation costs incurred each year as a result of the war. That wouldn't be a bad thing if Exxon wasn't a US corporation; they pay more in taxes than they make in profits off of their US operations, so any jump in spending by the government will inevitably be levied off of them in one way or another.

Also, unlike Halliburton who recieves a share of that $80 billion as part of their contractor work to the military Exxon doesn't get anything; they have no production or exploration rights and no operations in Iraq, so they literally make nothing off of supporting the war other than a small amount off of the terror premium. In fact, the demand destruction caused by high oil prices will ultimately reduce their revenue in the intermediate term; even though demand is still growing, it's growing slower which means less sales and smaller profits.
There is really too much information in all of this to wade through. There is no way for me to continue on this track without getting repeatedly schooled by you.

I think I'll just continue to not like ExxonMobil due to their environmental practices and not get myself involved in this part of it. It's giving me a headache.

Politicans need to realize that we didn't get cheap oil by drilling our way to it. We got it by conserving and boosting efficiency, and there is no reason why we can't do it again. I see no reason to sacrifice our environment or our remaining reserves for nothing when we can create another Saudi Arabia of oil savings through conservation and alternatives.
I thought we had cheap oil during the 2001/2 period because of increased OPEC production and decreased Chinese demand. I don't think conservation played much of a part.

There is really too much information in all of this to wade through. There is no way for me to continue on this track without getting repeatedly schooled by you.

Oil and oil companies are one of the things I follow closely because I'm majoring in finance. Also, I'm also a pretty big advocate of alternative energy and Peak Oil awareness so I spend a lot of time reading up on its history.

I think I'll just continue to not like ExxonMobil due to their environmental practices and not get myself involved in this part of it. It's giving me a headache.

There's enough environmental abuse by those guys to last a lifetime. It's disgraceful for a company involved in one of the worse oil spills ever to continue to hire and use single-hulled tankers for their oil. Just because Exxon had nothing to do with Iraq doesn't mean they're anywhere near a good company.

I don't even want to get in to their lies and smear campaigns against alternative energy and the risks of fossil fuel consumption...

There is really too much information in all of this to wade through. There is no way for me to continue on this track without getting repeatedly schooled by you.

I think I'll just continue to not like ExxonMobil due to their environmental practices and not get myself involved in this part of it. It's giving me a headache.

Exxon-Mobil seem to not give a damn about the general areas around their facilities. Their Baytown Olefins plant dumped hundreds of gallons of sludge in a field just in front of a Baytown neighborhood a few years back. And the very same refinery complex pays millions of dollars in fines for polluting far beyond the EPA limits (somewhere in the area of 360,000 pounds per year over).

Why I can still remember the general details I picked up on a very small website one night back in late 2004 is kind of weird. :p

Oil and oil companies are one of the things I follow closely because I'm majoring in finance. Also, I'm also a pretty big advocate of alternative energy and Peak Oil awareness so I spend a lot of time reading up on its history.



There's enough environmental abuse by those guys to last a lifetime. It's disgraceful for a company involved in one of the worse oil spills ever to continue to hire and use single-hulled tankers for their oil. Just because Exxon had nothing to do with Iraq doesn't mean they're anywhere near a good company.

I don't even want to get in to their lies and smear campaigns against alternative energy and the risks of fossil fuel consumption...
Well, it's actually refreshing to hear somebody speak honestly and not have an agenda for or against the company.

I thought we had cheap oil during the 2001/2 period because of increased OPEC production and decreased Chinese demand. I don't think conservation played much of a part.

Well, the recession had a lot to do with it as well. US oil demand was nearly flat off from 2000-2003 but OPEC production rose, pushing prices down.

However, I was referring to the 1980's and the drop in oil demand following the 1979 energy crisis. US oil demand remained below its 1979 peak for 19 years and world demand remained below its peak for 10 years; during that time, the price of oil fell from $40 to $20, and rising production took it from there bringing it to a bottom of $10.80/barrel in December of 1998.

Energy intensity is also a lot lower than it was then, so the economy can tolerate a lot higher prices than it could in the 1970's without slowing.

Well, it's actually refreshing to hear somebody speak honestly and not have an agenda for or against the company.

Having an agenda for any company makes it hard to be a financial analyst.;)

After all, I need to start now if I want to be as impartial as possible for my job once I graduate.

Having an agenda for any company makes it hard to be a financial analyst.;)

After all, I need to start now if I want to be as impartial as possible for my job once I graduate.

I'm guessing there's a literal buttload of money involved in Finance... Would I be correct?

Well, the recession had a lot to do with it as well. US oil demand was nearly flat off from 2000-2003 but OPEC production rose, pushing prices down.

However, I was referring to the 1980's and the drop in oil demand following the 1979 energy crisis. US oil demand remained below its 1979 peak for 19 years and world demand remained below its peak for 10 years; during that time, the price of oil fell from $40 to $20, and rising production took it from there bringing it to a bottom of $10.80/barrel in December of 1998.

Energy intensity is also a lot lower than it was then, so the economy can tolerate a lot higher prices than it could in the 1970's without slowing.
I enjoy reading your analyses. I was just nitpicking -- I couldn't help myself.
You write really well, though. It would be tough making a living at writing an Oil-for-Dummies column, but you need to apply for the next opening.

I'm guessing there's a literal buttload of money involved in Finance... Would I be correct?
Ouch!

I'm guessing there's a literal buttload of money involved in Finance... Would I be correct?

Yeah, that's pretty much correct.

I enjoy reading your analyses. I was just nitpicking -- I couldn't help myself. You write really well, though. It would be tough making a living at writing an Oil-for-Dummies column, but you need to apply for the next opening.

Thanks.:)

Just wait a few years, and perhaps you'll see me on a website or two as a columnist. If you ever see a mention of NS, you'll know it's me.

I'm not convinced we're doing enough research with alternative fuels. Besides, cars can run on ethanol, but can industry or power plants? We could go back to using coal, but is the ecological damage really worth it?

Then they're clearly doing something right. They're invested in an excellent field for making money. I congratulate them.