NationStates Jolt Archive

I have always been wary of people who say it's "not fair" that oil companies are making record profits. I chalked it up to being a business owner and possibly being biased, I mean if people are going to pay me, and then whine later.......it's just silly. However, oil is needed for a lot more than gas, it's needed make-up, water bottles, those plastic tubey things I get my I.V. meds through, probably 90% of the product I use in my everyday life.

Even if I cut down on driving......I'm not exactly cutting my consumption of oil. So, I wondered, how much am I getting screwed on this deal?

Not much according to an oil exec.

"I saw someone characterize our profits the other day in terms of $1,400 in profit per second. Well, they also need to understand we paid $4,000 a second in taxes, and we spent $15,000 a second in cost," Tillerson told ABC News' Charles Gibson. "We spend $1 billion a day just running our business. So this is a business where large numbers are just characteristic of it."

http://abcnews.go.com/Business/story?id=5574568&page=1
Well, what do you guys think?

I agree with you, Smunkee... but you know what people are gonna say...

"Big Oil is teh ebil!"

Well, what do you guys think?
I think it's a smokescreen. It's a diversion aimed at hoping to confuse people on the issues. An attempt at "Look how much money we pay! how can you begrudge us these profits, when those profits are tiny in comparison to our expenses?"

Which would be a valid point, if we were talking about income, not profits. But we're talking about profits. Which means those huge tax bills? They've already made it back. Those development expenses? Covered. Those gigantic investments in research and development? Taken care of.

It's disingenuous and dishonest to try and argue "but we have all these huge expenses" when you're MAKING A PROFIT. Making a profit means that, no matter what your expenses are, you're still covering them. You're still meeting your obligations. And you're still making tremendous profits.

Yeah you might spend a billion a day running your business. But you make more than a billion. So you can't really complain about your operating expenses, when your income far more than offsets your debt.

I have always been wary of people who say it's "not fair" that oil companies are making record profits. I chalked it up to being a business owner and possibly being biased, I mean if people are going to pay me, and then whine later.......it's just silly. However, oil is needed for a lot more than gas, it's needed make-up, water bottles, those plastic tubey things I get my I.V. meds through, probably 90% of the product I use in my everyday life.

Even if I cut down on driving......I'm not exactly cutting my consumption of oil. So, I wondered, how much am I getting screwed on this deal?

Not much according to an oil exec.



http://abcnews.go.com/Business/story?id=5574568&page=1
Well, what do you guys think?
I'd say that once(if) we start taxing away any profit at all, energy companies will be short on motivation to provide energy. That would suck worse than allowing them to make money when times are good.

According to that guy's figures, that's somewhere between 6 and 8% profit, which is a pretty high margin.

I think it's a smokescreen. It's a diversion aimed at hoping to confuse people on the issues. An attempt at "Look how much money we pay! how can you begrudge us these profits, when those profits are tiny in comparison to our expenses?"

Which would be a valid point, if we were talking about income, not profits. But we're talking about profits. Which means those huge tax bills? They've already made it back. Those development expenses? Covered. Those gigantic investments in research and development? Taken care of.

It's disingenuous and dishonest to try and argue "but we have all these huge expenses" when you're MAKING A PROFIT. Making a profit means that, no matter what your expenses are, you're still covering them. You're still meeting your obligations. And you're still making tremendous profits.

Yeah you might spend a billion a day running your business. But you make more than a billion. So you can't really complain about your operating expenses, when your income far more than offsets your debt.

Is it bad for a company to turn a profit? Should they all opperate in the red? If not, how much of a profit is acceptable?


When I worked at Taco Bell it cost us about 12 cents to make a taco supreme, we charged 89 cents for it though. Is that an outrageous profit?

I think it's a smokescreen. It's a diversion aimed at hoping to confuse people on the issues. An attempt at "Look how much money we pay! how can you begrudge us these profits, when those profits are tiny in comparison to our expenses?"

Which would be a valid point, if we were talking about income, not profits. But we're talking about profits. Which means those huge tax bills? They've already made it back. Those development expenses? Covered. Those gigantic investments in research and development? Taken care of.

It's disingenuous and dishonest to try and argue "but we have all these huge expenses" when you're MAKING A PROFIT. Making a profit means that, no matter what your expenses are, you're still covering them. You're still meeting your obligations. And you're still making tremendous profits.

Yeah you might spend a billion a day running your business. But you make more than a billion. So you can't really complain about your operating expenses, when your income far more than offsets your debt.

You're making it sound like they don't deserve to make a profit at all. The fact is that the Government reaps a greater share of profit from the companies without doing a damn thing to help produce the product. The profit margin from Oil Companies is much thinner than it is for a lot of other companies.

The real smokescreen is the propagation of the idea that somehow these companies don't deserve to make money. This is a rallying cry against big business and in turn, against Republicans because they're always cast as the ones who are under the influence of Big Corporations.

Reality: BOTH parties are guilty of this.

When I worked at Taco Bell it cost us about 12 cents to make a taco supreme, we charged 89 cents for it though. Is that an outrageous profit?

Does Taco Bell want to destroy pristine wilderness like Alaska to make a buck?



No seriously, I have no idea. Do they?

Neo Art makes an important point. Companies routinely try to justify or downplay profits by referring to expenses, as if those expenses have to be paid out of the profits, hoping people will forget that profit comes AFTER expenses are already paid. It is what's left over.

Normally, I do not begrudge any company any profits they can realize legally, but in this particular instance, I do begrudge it because I see a strong pattern of war profiteering and other unfair and illegal business practices in it.

EDIT: That's in reference to the oil companies' profits. In general, I am also getting sick to shit with hearing various corporations brag about their profits and their massive executive compensation packages while I am all too aware of how badly they are doing whatever the corporation supposedly exists to do, and how ready they are to declare bankruptcy, loot the 401K's and scarper off to the Caymans.

I stand by my statement that drilling in alaska will never lower gas prices as quickly as drilling in the heads of oil execs.

Does Taco Bell want to destroy pristine wilderness like Alaska to make a buck?
I'm sure if they thought the caribou would buy tacos, they'd be building.

No seriously, I have no idea. Do they?
The exploit immigrant workers.

My question has little to do with ethics and is purely "how much profit is too much?"

Is 8% too much?

Does Taco Bell want to destroy pristine wilderness like Alaska to make a buck?

They would if they needed to. All corporations are amoral.

Is 8% too much?

If anything, it's a little disappointing.

Does Taco Bell want to destroy pristine wilderness like Alaska to make a buck?

No seriously, I have no idea. Do they?

:facepalm:

Neo Art makes an important point. Companies routinely try to justify or downplay profits by referring to expenses, as if those expenses have to be paid out of the profits, hoping people will forget that profit comes AFTER expenses are already paid. It is what's left over.

Normally, I do not begrudge any company any profits they can realize legally, but in this particular instance, I do begrudge it because I see a strong pattern of war profiteering and other unfair and illegal business practices in it.

The point of comparing those other expenses is to give an idea of the proportions, not make it sound small by itself. 1,400 bucks a day sounds like a lot until you look at the scope of how much business this company does. In actual percentages, they're not at the top of the ladder.

The fact is that the Government reaps a greater share of profit from the companies without doing a damn thing to help produce the product. Aside from creating the framework in which the profit is made, you mean.

When I worked at Taco Bell it cost us about 12 cents to make a taco supreme, we charged 89 cents for it though. Is that an outrageous profit?

That hardly factors all the variables. What is the rent on the building? The wage? The cost of machine maintenance? How much of that 89 cents is going to pay off existing debt, or secure new debt?

I'm not saying businesses shouldn't be allowed to make a profit. Profit is what funds our economy. I'm saying that oil execs shouldn't be dishonest by trying to claim their record setting profits are somehow less than they are by talking about their expenses, while ingoring the fact that inherent in the idea of profit is the idea that all those expenses are already met and exceeded.


Just because you have high expenses doesn't mean that your profits are somehow less, as he is trying to imply.

Is it bad for a company to turn a profit? Should they all opperate in the red? If not, how much of a profit is acceptable?


When I worked at Taco Bell it cost us about 12 cents to make a taco supreme, we charged 89 cents for it though. Is that an outrageous profit?

Not all of that is profit. You have to take into consideration wages paid, supplies and such needed, waste, energy costs to keep the place running, etc and so forth.

For instance, at the Grocery store I work at, I work in produce. We have 30% markup on what it cost us vs. what it costs the store(Except bananas, which we only mark up 2 cents above cost). However, with waste and such, that markup drops considerably.

My oil stocks are doing great, if I was smart enough to invest in some oil stocks. Other persons, private organizations, 401 Ks have investments in oil stocks. They are the smart ones.

Aside from creating the framework in which the profit is made, you mean.

You mean a free market? That's what you have when the Government stays out of the way. It's not due anything for that.

:facepalm:



The point of comparing those other expenses is to give an idea of the proportions, not make it sound small by itself. 1,400 bucks a day sounds like a lot until you look at the scope of how much business this company does. In actual percentages, they're not at the top of the ladder.
AFTER expenses. If the $1400/day is profit, then it is not offset by anything except the juggling of accountants.

That hardly factors all the variables. What is the rent on the building? The wage? The cost of machine maintenance? How much of that 89 cents is going to pay off existing debt, or secure new debt?

I'm not saying businesses shouldn't be allowed to make a profit. Profit is what funds our economy. I'm saying that oil execs shouldn't be dishonest by trying to claim their record setting profits are somehow less than they are by talking about their expenses, while ingoring the fact that inherent in the idea of profit is the idea that all those expenses are already met and exceeded.


Just because you have high expenses doesn't mean that your profits are somehow less, as he is trying to imply.
The 12 cents covered the cost of rent/utilities/wages. The rest was profit. It was a franchise. We made a LOT of tacos. (upwards of 3000 a day, the profit margin on burritos and such was smaller)

AFTER expenses. If the $1400/day is profit, then it is not offset by anything except the juggling of accountants.

AFTER expenses I make a 30% profit. Should the government tax me for a "windfall" or something?

:facepalm:


Hi.

*waves*

It's called humour.

AFTER expenses. If the $1400/day is profit, then it is not offset by anything except the juggling of accountants.

I understand that. That still isn't the point. The point is that they get less profit form their own investments and efforts than the Government gets. The point is that compared to operating costs and expenses that number isn't that high.

It's a matter of proportions.

1,400 bucks a day sounds like a lot until you look at the scope of how much business this company does.

When talking profit it doesn't matter what business you do, that's the point. $1,400 profit is $1,400 profit.

You mean a free market? That's what you have when the Government stays out of the way. It's not due anything for that.

yeah, good luck having that free market without any government. A truly free market will never work.

You mean a free market? That's what you have when the Government stays out of the way. It's not due anything for that.Incorrect. Without the government being in the way, there are no property rights, and therefore no market.
The free market requires a massive amount of government interference, and therefore costs a lot to sustain.

Hi.

*waves*

It's called humour.

Is that what we're calling it? ;)

When talking profit it doesn't matter what business you do, that's the point. $1,400 profit is $1,400 profit.

So what? These companies are HUGE! Your profit margin SHOULD be proportional to the size of your business.

Unless you're suggesting that total profits from Exxon Mobil should be, in dollars, the same as a mom and pop grocery store on the corner...

AFTER expenses I make a 30% profit. Should the government tax me for a "windfall" or something?
If you read my first post, you'll see where I said that I don't begrudge any company any profits they can realize legally. If you run your company properly, then higher profits are just a sign of how good a business person you are.

But if you skirt, manipulate or abuse the law to do it, if you keep false accounts and move funds around illegally to hide profits or artificially inflate the appearance of costs, then you should not be hit with a windfall tax. You should be jailed.

EDIT: Also, if you inflate short-term profits by essentially looting your own company, or if you remove expenses or obstacles to profit by corrupting the political system that regulates your industry, then you might not get jailed for that, but you deserve and will get no respect from me.

yeah, good luck having that free market without any government. A truly free market will never work.

Incorrect. Without the government being in the way, there are no property rights, and therefore no market.
The free market requires a massive amount of government interference, and therefore costs a lot to sustain.

Do other businesses pay a proportional amount of tax? Do you think a tax rate that results in almost $4 going to the Government for every $1 of profit is reasonable?

If your paycheck had a tax rate that high could you afford to live?

Is that what we're calling it? ;)



:facepalm:


(Hah! Gotcha!)

So what? These companies are HUGE! Your profit margin SHOULD be proportional to the size of your business.

Are they? Do you have figures that suggest what the oil company profit, in percentage of their expenses are, compared to others?

When talking profit it doesn't matter what business you do, that's the point. $1,400 profit is $1,400 profit.

Not really. $1,400 profit on $14,000 turnover is good, while $1,400 profit on $14,000,000 turnover is bad. The ratios are what's important, not the figure.

Do other businesses pay a proportional amount of tax? Do you think a tax rate that results in almost $4 going to the Government for every $1 of profit is reasonable?

It's unlikely that that's an accurate figure.

I understand that. That still isn't the point. The point is that they get less profit form their own investments and efforts than the Government gets. The point is that compared to operating costs and expenses that number isn't that high.

It's a matter of proportions.
Who gives a shit what the government does? Anything the government skims off a corporation's income is an expense and, therefore, has nothing to do with that corporation's profits.

Also, no shit the number amount of profits is lower than the number amount of costs/expenses. Who cares about that, either? Profit is still profit, and regardless of how much went in and how much went out, if you have $1400 left in your hand at the end of the day, nothing will reduce that amount.

Are they? Do you have figures that suggest what the oil company profit, in percentage of their expenses are, compared to others?

As a matter of fact I was looking at a bar graph just the other day. I'm working on finding it again now.

:facepalm:

(Hah! Gotcha!)

Touche', PM. Touche'.

Do other businesses pay a proportional amount of tax?I would assume, yes.
If not, it would likely to be due to the lower amount of environmental degradation done by those other businesses compared to the amount done by drilling oil.

Do you think a tax rate that results in almost $4 going to the Government for every $1 of profit is reasonable?Absolutely.

If your paycheck had a tax rate that high could you afford to live?It would depend on what I was getting from the government in exchange for the taxes I paid.

Who gives a shit what the government does? Anything the government skims off a corporation's income is an expense and, therefore, has nothing to do with that corporation's profits.

Also, no shit the number amount of profits is lower than the number amount of costs/expenses. Who cares about that, either? Profit is still profit, and regardless of how much went in and how much went out, if you have $1400 left in your hand at the end of the day, nothing will reduce that amount.

Yeah and a high tax rate further shrinks the end profit as a function of the ratio between expenses and profits. This is a bad thing. And I do give a shit what the Government does because the more taxes the Government slaps on those companies the higher the costs will be to the consumer in order to make up the difference. This is a standard business practice that is hardly unique to Oil Companies.

And again, 1400 is an arbitrary number. What matters is how that compares to the size of the company. To a mom and pop grocery store, that's a shitload of money. To Exxon Mobil, it's a drop in the bucket.

I would assume, yes.
If not, it would likely to be due to the lower amount of environmental degradation done by those other businesses compared to the amount done by drilling oil.

Actually I would say it had more to do with politics. Think about it. How many politicians have been saying crap like this:

"I will punish those big greedy Oil Companies for you by taxing the hell out of them. Just vote for me!"


Absolutely.

Really? Why?


It would depend on what I was getting from the government in exchange for the taxes I paid.

So you're okay with someone else controlling your money and needs. Interesting. Do you really trust the Government to know how to spend money you earned better than you?

I understand that. That still isn't the point. The point is that they get less profit form their own investments and efforts than the Government gets. The point is that compared to operating costs and expenses that number isn't that high.

It's a matter of proportions.
Proportions only matter if you are rating a company's past and/or ongoing profitability for the purposes of annual reports and/or valuation analyses.

If you are talking about real dollar amounts, then the proportions do not matter. Profit is profit, and expenses do not affect it.

Do other businesses pay a proportional amount of tax? Do you think a tax rate that results in almost $4 going to the Government for every $1 of profit is reasonable?

If your paycheck had a tax rate that high could you afford to live?
If the tax rate on oil companies is really so insupportable, then how did they manage to be so profitable in recent years?

Once again, no matter how you try, you can't use expenses to reduce profits. Arthur Anderson couldn't do it. Neither can you.

Yeah and a high tax rate further shrinks the end profit as a function of the ratio between expenses and profits. This is a bad thing. And I do give a shit what the Government does because the more taxes the Government slaps on those companies the higher the costs will be to the consumer in order to make up the difference. This is a standard business practice that is hardly unique to Oil Companies.

And again, 1400 is an arbitrary number. What matters is how that compares to the size of the company. To a mom and pop grocery store, that's a shitload of money. To Exxon Mobil, it's a drop in the bucket.
I've addressed this in my previous post.

Actually I would say it had more to do with politics. Think about it. How many politicians have been saying crap like this:

"I will punish those big greedy Oil Companies for you by taxing the hell out of them. Just vote for me!"Possibly.

How many other types of businesses receive subsidies on the scale that the oil companies do?

Really? Why?For several reasons. At the very least you're only comparing profit to the tax, and not the total amount generated by the company to the tax rate.
By this guy's figures it's not even 20% that's taxed.

So you're okay with someone else controlling your money and needs. Interesting. Do you really trust the Government to know how to spend money you earned better than you?The money that is taxed isn't my money, as I never had any right to it.
I don't particularly trust the government at all, but what it does with its money isn't wholly up to me, though I do make my opinion known by voting.

I dont think most people (myself included) are annoyed that oil companies make a record profit. Thats fine. Companies are there to make money. Its the American and/or nationality-of-your-choice way.
What gets people mad is that, while making a record profit, the price of gas has a tendency to skyrocket at the least provocation. And comes down very slowly.
Imagine a toad on the moon. With a little toad space suit, if you will, to prevent implosion.
Here, for example, gas was around $3.80 (rather cheap compared to the rest of the country, I know) a two months ago. In the wake of the total lack of a massive oil shortage, fire, explosions and apocalyptic horsemen, speculation on oil prices has calmed down a bit, and local gas stations dropped their prices, rather reluctantly, over two months, down to $3.50.
Considering that when somebody at a refinery in Saudi Arabia accidentally knocks over a barrel of oil and spills a couple gallons the price tends to shoot up ten cents in a day, its rather understandable that the uneducated masses get a bit upset.
(For those about to demand source, that was hyperbole.)

Rather than this whole confusing mess of government both giving and taking money from the oil companies, how about we simplify it. Government takes overall control, and takes a set proportion of profit directly, determined by an independent commission of equal numbers of industry experts and representatives of consumer groups. They could then take less if a company takes steps to reduce its impact on the environment or more when there are high prices so that the oil company has a motive to find as much oil as possible or if they can't find enough shift focus to their renewables branches.

Proportions only matter if you are rating a company's past and/or ongoing profitability for the purposes of annual reports and/or valuation analyses.

If you are talking about real dollar amounts, then the proportions do not matter. Profit is profit, and expenses do not affect it.

That's silly. It's like saying if Mom & Pop Grocery only clears $1,000 in profits each week then neither should Exxon Mobil.


If the tax rate on oil companies is really so insupportable, then how did they manage to be so profitable in recent years?

By raising prices. Unfortunately we can't do that with our paychecks.


Once again, no matter how you try, you can't use expenses to reduce profits. Arthur Anderson couldn't do it. Neither can you.

We're not using expenses to reduce profits. We're using expenses AND profits to define the scope.

Possibly.

How many other types of businesses receive subsidies on the scale that the oil companies do?

Pharmaceutical companies, Farms, Auto manufacturers, airlines...


For several reasons. At the very least you're only comparing profit to the tax, and not the total amount generated by the company to the tax rate.
By this guy's figures it's not even 20% that's taxed.

Imagine what would happen if it were more...


The money that is taxed isn't my money, as I never had any right to it.
I don't particularly trust the government at all, but what it does with its money isn't wholly up to me, though I do make my opinion known by voting.

Never had any right to it? Are you serious? By extension you're saying basically you don't really have the right to keep the money you earn, since the tax rate could go up at any time.

Just curious: Are you a Socialist?

I dont think most people (myself included) are annoyed that oil companies make a record profit. Thats fine. Companies are there to make money. Its the American and/or nationality-of-your-choice way.
What gets people mad is that, while making a record profit, the price of gas has a tendency to skyrocket at the least provocation. And comes down very slowly.
Imagine a toad on the moon. With a little toad space suit, if you will, to prevent implosion.
Here, for example, gas was around $3.80 (rather cheap compared to the rest of the country, I know) a two months ago. In the wake of the total lack of a massive oil shortage, fire, explosions and apocalyptic horsemen, speculation on oil prices has calmed down a bit, and local gas stations dropped their prices, rather reluctantly, over two months, down to $3.50.
Considering that when somebody at a refinery in Saudi Arabia accidentally knocks over a barrel of oil and spills a couple gallons the price tends to shoot up ten cents in a day, its rather understandable that the uneducated masses get a bit upset.
(For those about to demand source, that was hyperbole.)

For that, we can blame OPEC. (And we should.)

For that, we can blame OPEC. (And we should.)

But most people dont buy their gas from OPEC. Its much more fun to blame somebody more visible.

But most people dont buy their gas from OPEC. Its much more fun to blame somebody more visible.

true dat

Pharmaceutical companies, Farms, Auto manufacturers, airlines...It would not be unreasonable for those types of companies to pay a comparable tax rate to what the oil companies pay.

Imagine what would happen if it were more...Probably not much. As long as there is profit to be made, someone will seek it.

Never had any right to it? Are you serious? By extension you're saying basically you don't really have the right to keep the money you earn, since the tax rate could go up at any time.If the tax rate did go up, then yes, I wouldn't have the right to it. This is because my earning the money comes within the framework that the government provides. Without this framework, there is no earning done.

Just curious: Are you a Socialist?'Communist' is probably a better word.

That's silly. It's like saying if Mom & Pop Grocery only clears $1,000 in profits each week then neither should Exxon Mobil.
No, it isn't because you are again conflating percentages with real dollar amounts.


By raising prices. Unfortunately we can't do that with our paychecks.
So then you seem to be saying two things:

1) That the tax rate does not actually hurt the oil companies' ability to make profit; and

2) That your "what if that was coming out of our paychecks!?!?! :eek2:" comparison was meaningless because our paychecks and their business practices are actually not comparable.

We're not using expenses to reduce profits. We're using expenses AND profits to define the scope.
WE ain't doin' jack, white man. And as I've been saying, your "scope" is irrelevant.

It would not be unreasonable for those types of companies to pay a comparable tax rate to what the oil companies pay.


I'm thinking a simpler solution would be to reduce taxes AND subsidies.


Probably not much. As long as there is profit to be made, someone will seek it.

Until the cost of business becomes so high that it cannot be sustained.


If the tax rate did go up, then yes, I wouldn't have the right to it. This is because my earning the money comes within the framework that the government provides. Without this framework, there is no earning done.


This is where you and I philosophically disagree. I believe that the role of Government is to stay out of the way as much as possible, and any earnings I make are, ideally, between myself and my employer alone. (I am a Libertarian.)


'Communist' is probably a better word.

Okay. After I posted the question I realized I should have said Communist and not Socialist. Again, as a Libertarian my views are almost diametrically opposite yours, so we'll probably have to leave it as an agreement to disagree in philosophical terms :)

No, it isn't because you are again conflating percentages with real dollar amounts.

And I'd say you're fixating on dollar amounts and ignoring the overall picture.


So then you seem to be saying two things:

1) That the tax rate does not actually hurt the oil companies' ability to make profit; and

Depending on market conditions. There is a breaking point at which they can't sell product at such high prices and the market collapses.


2) That your "what if that was coming out of our paychecks!?!?! :eek2:" comparison was meaningless because our paychecks and their business practices are actually not comparable.


I'll concede that.


WE ain't doin' jack, white man. And as I've been saying, your "scope" is irrelevant.

(I don't get the reference.)

Scope is not only relevant, it's the core of the issue. People seem to take issue with the 1400/day amount of profit without any regard for the sheer size of the company and the number of shareholders partaking of that profit.

And I'd say you're fixating on dollar amounts and ignoring the overall picture.
I'd say you are deliberately ignoring what I'm saying in order to keep repeating what you want to say rather than respond to me.

My original point concerning profits was this: Profit comes AFTER expenses, so any time a company attempts to make its profits look lower by citing expenses, they are being disingenuous, if not outright dishonest.

Now if a company wanted to defend a claim that its profit margins or its evalutation of its own profitability (i.e. its ability to generate profit) were not that great because the percentage of profit versus the cost of doing business was this or that, that would be an entirely different matter.

But to claim or in any way attempt to make it seem that $1400 profit is anything less than $1400 profit is just bullshit.

Depending on market conditions. There is a breaking point at which they can't sell product at such high prices and the market collapses.
And when that breaking point is reached, then it will matter. Until then, the problem does not exist.

I'll concede that.



(I don't get the reference.)
It wasn't a reference, except to the extent it implied that you and I are not members of the same group. I was being snarky about your use of the word "WE". It seems to me that you are the only one harping on about "scope."

Scope is not only relevant, it's the core of the issue.
I would think it should be pretty clear that I disagree.

People seem to take issue with the 1400/day amount of profit without any regard for the sheer size of the company and the number of shareholders partaking of that profit.
Weren't you the one who said that you cited $1400 as just an arbitrary number to use as an example for the sake of conversation? Now you seem to think I really expect Exxon to divvy up only $1400.00USD among all its shareholders. Please, really, do try to focus on what the topic actually is.

I'd say you are deliberately ignoring what I'm saying in order to keep repeating what you want to say rather than respond to me.

My original point concerning profits was this: Profit comes AFTER expenses, so any time a company attempts to make its profits look lower by citing expenses, they are being disingenuous, if not outright dishonest.

Now if a company wanted to defend a claim that its profit margins or its evalutation of its own profitability (i.e. its ability to generate profit) were not that great because the percentage of profit versus the cost of doing business was this or that, that would be an entirely different matter.

But to claim or in any way attempt to make it seem that $1400 profit is anything less than $1400 profit is just bullshit.


Okay it seems you're missing what I'm getting at. They're not saying 1400<1400 because of expenses. They're saying $1400/day is not a lot of money given the size of their business operations.


And when that breaking point is reached, then it will matter. Until then, the problem does not exist.


It wasn't a reference, except to the extent it implied that you and I are not members of the same group. I was being snarky about your use of the word "WE". It seems to me that you are the only one harping on about "scope."


That's because somebody needs to. People seem to be going "Holy shit! $1400 a day is a lotta money something must be done!"


I would think it should be pretty clear that I disagree.


Abundantly. So?


Weren't you the one who said that you cited $1400 as just an arbitrary number to use as an example for the sake of conversation? Now you seem to think I really expect Exxon to divvy up only $1400.00USD among all its shareholders. Please, really, do try to focus on what the topic actually is.

The condescending approach really only works when you have a better understanding of what's going on.

Who gets the profit?

Some of it goes to shareholders. Some of it gets reinvested in order to expand the business. Some of it has to purchase inventory when the prices of such inventories rise. (This is NOT included in expenses when you're having to spend against future increases in price. This is why prices at the pump, where independent retailers sell the fuel, rise faster than the cost of a barrel of crude. It's because their profit margin is so razor thin they have to charge more for the higher cost of inventory and that comes out of their profits.)

What, in your opinion, is a reasonable amount of profit for Exxon Mobil to make, given the size of the company, the cost of expansion, the number of shareholders, and the scope of the enterprise?

This argument was silly the last time it came up, but as I am pro-numeracy I must point out that "$1400 per day in profit" was not what was quoted in the article. The oil exec referenced $1400 per second.

So I would agree with Neo B that $1400/day net profit isn't a big deal for XOM, but that's because they're clearing 86,400 times more than that.

I'm thinking a simpler solution would be to reduce taxes AND subsidies.I support the idea of reducing subsidies. Eliminating them overall wouldn't be practical, sometimes certain things need to be subsidized.

Until the cost of business becomes so high that it cannot be sustained.In which case there are no more profits. ;)

This is where you and I philosophically disagree. I believe that the role of Government is to stay out of the way as much as possible, and any earnings I make are, ideally, between myself and my employer alone. (I am a Libertarian.)

Okay. After I posted the question I realized I should have said Communist and not Socialist. Again, as a Libertarian my views are almost diametrically opposite yours, so we'll probably have to leave it as an agreement to disagree in philosophical terms :)Oh, I'm sure that we'll have to agree to disagree. My point was that a market system is not what occurs when the government "stays out of the way", and therefore that taxation to support the government that creates the market system is just.

In my mind, Mobil is different from Apple. You dont need an Apple computer and their product is an optional item to be purchased with discretionary spending.

Mobil on the other hand has the entire fate of the economy wrapped around its product in every conceivable way both directly and indirectly. Hence more attention needs to be paid to profit margins to prevent demogogery. Look what damage companies like Enron did to the average electric consumer in California because they had an unfettered lock on energy.

I think it's a smokescreen. It's a diversion aimed at hoping to confuse people on the issues. An attempt at "Look how much money we pay! how can you begrudge us these profits, when those profits are tiny in comparison to our expenses?"

Which would be a valid point, if we were talking about income, not profits. But we're talking about profits. Which means those huge tax bills? They've already made it back. Those development expenses? Covered. Those gigantic investments in research and development? Taken care of.

It's disingenuous and dishonest to try and argue "but we have all these huge expenses" when you're MAKING A PROFIT. Making a profit means that, no matter what your expenses are, you're still covering them. You're still meeting your obligations. And you're still making tremendous profits.

Yeah you might spend a billion a day running your business. But you make more than a billion. So you can't really complain about your operating expenses, when your income far more than offsets your debt.

Damn you for your logic and basic accounting. I curse you with a plague of locusts you anti-American bastard. :)

I have always been wary of people who say it's "not fair" that oil companies are making record profits. I chalked it up to being a business owner and possibly being biased, I mean if people are going to pay me, and then whine later.......it's just silly. However, oil is needed for a lot more than gas, it's needed make-up, water bottles, those plastic tubey things I get my I.V. meds through, probably 90% of the product I use in my everyday life.

Even if I cut down on driving......I'm not exactly cutting my consumption of oil. So, I wondered, how much am I getting screwed on this deal?

Not much according to an oil exec.



http://abcnews.go.com/Business/story?id=5574568&page=1
Well, what do you guys think?

The profits are lower than Wal-Mart, and are not that impressive in terms of percentage. They have massive costs and pay massive taxes.

Neo Art makes an important point. Companies routinely try to justify or downplay profits by referring to expenses, as if those expenses have to be paid out of the profits, hoping people will forget that profit comes AFTER expenses are already paid. It is what's left over.

Normally, I do not begrudge any company any profits they can realize legally, but in this particular instance, I do begrudge it because I see a strong pattern of war profiteering and other unfair and illegal business practices in it.

EDIT: That's in reference to the oil companies' profits. In general, I am also getting sick to shit with hearing various corporations brag about their profits and their massive executive compensation packages while I am all too aware of how badly they are doing whatever the corporation supposedly exists to do, and how ready they are to declare bankruptcy, loot the 401K's and scarper off to the Caymans.

You see, that's the whole point. They make these huge profits off political unrest around the globe. They get to go bankrupt and the government then bails them out. People complain about giving welfare to starving families but when it's time to bail out Bear Sterns... So let me follow the logic here. If a company is making huge profits it's just the American Way. If the same company is losing money and they decide to raid their pension system (that the employees have been paying into) it's just managing their finances. To hell with the people who were basically ROBBED of their money. The company then declares bankruptcy after stealing their employees pensions and the government bails them out. That type of welfare is just Fing grand, but the employee that lost their job as a result of this corporation is denied the assistance they need to feed their 2 kids and spouse. That's why stuff like this pisses people off. If corporation were responsible to their employees as they seem to think the employees should be to them, then perhaps there would be an equal playing field. As it is now, the people who make the big $ just want to keep making them regardless of who they have to kick to the ground.

i dont know enough to decide if exxon-mobil's profits are obscene or not. (im not in favor of a windfall profits tax though)

it just annoys me when you guys keep saying $1400 per DAY.

its $1400 PER SECOND.

I don't think anyone's mentioned the fact that the value of the US$ Dollar has dropped. (just look at the US$ Dollar to EU€ Euro conversion rat). Therefore, the oil companies profit might seem to be a lot, but is lacking actual worth.
But that doesn't mean that the oil companies aren't looking to cash out on the dependence for oil. The oil companies will milk this for all it's worth, then leave the economy high and dry while they leave billionaires. IMO, a free trade market is just an excuse to loot the economy.

yeah, good luck having that free market without any government. A truly free market will never work.

A truly free market is what resulted in huge trusts and the Great Depression. A free market without any regulation will never be successful. It will do wonders for creating an even bigger divide between the haves, have not's, and have more than they can Fing think of to spend. As a matter of fact, the haves disappear in that system. It winds up being a fuedel type system with the wealthy as the new aristocracy.

it just annoys me when you guys keep saying $1400 per DAY.

its $1400 PER SECOND.

indeed. the profits we are talking about here are so ridiculous that people cut them by a factor of 86400 and still found it debatable whether that was too much money to be just.

note to self: invent time machine, get in on ground floor of oil company

If you read my first post, you'll see where I said that I don't begrudge any company any profits they can realize legally. If you run your company properly, then higher profits are just a sign of how good a business person you are.

But if you skirt, manipulate or abuse the law to do it, if you keep false accounts and move funds around illegally to hide profits or artificially inflate the appearance of costs, then you should not be hit with a windfall tax. You should be jailed.

EDIT: Also, if you inflate short-term profits by essentially looting your own company, or if you remove expenses or obstacles to profit by corrupting the political system that regulates your industry, then you might not get jailed for that, but you deserve and will get no respect from me.

Ah HA! What he said. You have the right to make money as long as you do it responsibly.

Do other businesses pay a proportional amount of tax? Do you think a tax rate that results in almost $4 going to the Government for every $1 of profit is reasonable?

If your paycheck had a tax rate that high could you afford to live?

They get taxed at %400. Really?

This article from 2005 says you are wrong.

NEW YORK (CNN/Money) - Even as oil profits have soared on higher energy prices, the tax rate paid by many of the nation's largest oil companies are falling, according to a published report.

The Wall Street Journal reported Monday that almost one large oil company in four saw its global tax rate decline over the last 12 months, according to the companies' third quarter earnings reports.

The report derived tax rates by dividing the amount of income tax paid by taxable income for 87 publicly traded oil companies with a market capitalization of more than $1 billion.

Among those paying a lower tax rate Royal Dutch Shell's (Research) tax rate fell to 37 percent from 41 percent, BP's (Research) declined to about 27 percent from more than 30 percent, and Burlington Resources (Research) dropped to about 33 percent from 37 percent.

A Shell spokesman told the paper the company wouldn't discuss why its tax rate changed because the information was "commercially sensitive." Burlington spokesman James Bartlett told the paper the drop in the company's tax rate "could well be reversed in the fourth quarter." A BP spokesman declined to comment, according to the report.

All told the paper reported that 21 of the 87 companies examined had lower tax rates for the 12-months ending in the third quarter.

Oil and gas companies in the Standard & Poor's 500 index saw their third quarter earnings rise about 62 percent to about $25.9 billion, according to earnings tracker First Call, and full-year profits are expected to be up nearly 50 percent to $97.7 billion, according to current forecasts.

The paper reports that a company's tax rate can rise or fall because of tax credits, settlement of tax cases, changes in currency values, reinvestment strategies and operating losses.

For example, a spokeswoman for Murphy Oil Corp. (Research), an energy producer and retailer based in El Dorado, Ark., told the paper that its tax rate declined from 38 percent to 36.9 percent due changes in exploration costs related to its efforts in Africa and in deep water off Malaysia. Even with the lower tax rate the company paid $131 million in taxes in the third quarter, or $50 million more than a year earlier.

Still the report of lower tax rates at many companies come as a politically sensitive time for the oil industry. On Nov. 9 top executives from five oil companies, including BP and Shell, appeared before a joint Senate hearing looking at oil prices and profits, facing sometimes hostile questions and comments from the senators. Some senators suggested that tax cuts passed earlier this year for smaller refiners as part of the nation's energy bill should be rolled back in the current environment.

Some senators have voiced support for a so-called "windfall profit tax" on the recent rise in oil company income, or have called on the oil companies to voluntarily contribute more to funds that are designed to help the poor pay heating bills this

http://www.americanprogressaction.org/issues/2008/pdf/oil_tax.pdf

Hmm, that article says that the corporate tax rate was only 35% and McCain want to lower them to 25%. It just so happens that I pay more than that in taxes. So corporations that make billions should pay less in taxes than my wife and I.

I have always been wary of people who say it's "not fair" that oil companies are making record profits. I chalked it up to being a business owner and possibly being biased, I mean if people are going to pay me, and then whine later.......it's just silly. However, oil is needed for a lot more than gas, it's needed make-up, water bottles, those plastic tubey things I get my I.V. meds through, probably 90% of the product I use in my everyday life.

Even if I cut down on driving......I'm not exactly cutting my consumption of oil. So, I wondered, how much am I getting screwed on this deal?

Not much according to an oil exec.



http://abcnews.go.com/Business/story?id=5574568&page=1
Well, what do you guys think?

Yes of course big bussiness pay big tax, and big costs, and big wages etc..., yet isn't profit the amount of money they have made after all running costs etc.. have been caculated?

Hmm, that article says that the corporate tax rate was only 35% and McCain want to lower them to 25%. It just so happens that I pay more than that in taxes. So corporations that make billions should pay less in taxes than my wife and I.

McCain also wants to lower income taxes as well so you may end up paying less under such a system, although the actual realities of such tax cuts are unlikely anyway.

Do other businesses pay a proportional amount of tax? Do you think a tax rate that results in almost $4 going to the Government for every $1 of profit is reasonable?

If your paycheck had a tax rate that high could you afford to live?

Uh, yes. For most people they don't have that much over and above their cost of "doing business". After all of the various benefits packages, facilities costs, stock, etc., that a family spends their money on, 8% profit would be AWESOME for almost any family and taxes are certainly MUCH, MUCH more than that.

It just so happens that I pay more than that in taxes. So corporations that make billions should pay less in taxes than my wife and I.

How many people do your wife and you employ? How many products that support the economy do you make?

How many people do your wife and you employ? How many products that support the economy do you make?

I often walk down the aisles of Walmart knocking crap off the shelf. Then I take a big crap in the middle of another aisle.

I increase employment through my services. If not for me being a pig while I spend money at Walmart, Walmart would need less janitors. You may thank me now.

I increase employment through my services. If not for me being a pig while I spend money at Walmart, Walmart would need less janitors. You may thank me now.

And one would reasonably assume that the money your spending in Walmart was earned from a company of some sort somewhere right? Now you get why lower corporate tax rates have led to increased federal revenue. Say what you want about Bush, and hes screwed up plenty of other things, but his corporate tax breaks worked.

They get taxed at %400. Really?

This article from 2005 says you are wrong.



http://www.americanprogressaction.org/issues/2008/pdf/oil_tax.pdf

Hmm, that article says that the corporate tax rate was only 35% and McCain want to lower them to 25%. It just so happens that I pay more than that in taxes. So corporations that make billions should pay less in taxes than my wife and I.

You are naive if you think that "corporate tax" is the only tax a corporation pays.

I would like to know where you live that you pay more than 35% on your income tax.

And one would reasonably assume that the money your spending in Walmart was earned from a company of some sort somewhere right? Now you get why lower corporate tax rates have led to increased federal revenue. Say what you want about Bush, and hes screwed up plenty of other things, but his corporate tax breaks worked.

Actually, much of what I make was made from the government. But, hey, nice way to simply pretend my argument didn't happen. Let me know when you'd like to actually reply.

You are naive if you think that "corporate tax" is the only tax a corporation pays.

I would like to know where you live that you pay more than 35% on your income tax.

IL

And he didn't say income tax. He said taxes. As you pointed out, income tax isn't the only tax there is.

IL

And he didn't say income tax. He said taxes. As you pointed out, income tax isn't the only tax there is.

And corporations pay more than 35% tax. :p

But, hey, nice way to simply pretend my argument didn't happen. Let me know when you'd like to actually reply.

Thats because you dont have an arguement. Im not sure how you creating a mess helps the economy, your just causing a store to spend money to clean up after you and it gets no return for the money it spent wiping your ass. Thats hurting the economy and making it less efficient not helping it. Spending money in Walmart certianly helps the economy but noone is disagreeing with that point. I cant respond to your argument because i have no idea what your point even is, unless your asserting that people cleaning up after you on their dime is good for something other then for you.

Thats because you dont have an arguement. Im not sure how you creating a mess helps the economy, your just causing a store to spend money to clean up after you and it gets no return for the money it spent wiping your ass. Thats hurting the economy and making it less efficient not helping it. Spending money in Walmart certianly helps the economy but noone is disagreeing with that point. I cant respond to your argument because i have no idea what your point even is, unless your asserting that people cleaning up after you on their dime is good for something other then for you.

Creating a mess creates a need for a job. Just like any other inefficiency. We shouldn't actually prevent me from fucking things up because I'm providing jobs, right?

That's the same argument you made.

And corporations pay more than 35% tax. :p

Mine didn't. Not relative to our income. Of course, we get to write everything off, like the cost of rent, the cost of expenses, every operating cost.

If you compared your household income taxes to the money you have left after your operating costs, what the percent tax you're paying then be? Hint: it would be a hell of lot more than 35%.

Mine didn't. Not relative to our income. Of course, we get to right everything off, like the cost of rent, the cost of expenses, every operating cost.

If you compared your household income taxes to the money you have left after your operating costs, what the percent tax you're paying then be? Hint: it would be a hell of lot more than 35%.

You didn't pay employment taxes, or taxes on the vehicles for the business, or sales tax or property tax or any of those taxes?

Here's Exxon for example for '07

http://www.hoovers.com/exxon-mobil/--ID__10537,period__A--/free-co-fin-income.xhtml

They payed about $30B in taxes on an income of $70.5B. That's just about 42%. See the problem with this is that's calculated AFTER they write off all of their operating costs. The actual amount is more like $171.7B, the gross profit, which would be equivalent to my regular income, since I don't get to write off my rent, or my car, or any of the other things I put into my household.

And what's 30/171.7? That's less than 18% in taxes.

And, actually, Smunk, no, I didn't, but we're an exception. I agree corporations pay that. Just like families pay property taxes and vehicle taxes and social security(which, let's face it, is a tax) and sales tax, etc.

And if your counting the sales tax on the things they sell, they don't pay that. The consumer pays the sales tax. Yes, they pay sales tax on things they consume, just like you do.

You'll notice that after all the taxing, they make a 10%. I bet you'd love it if every year you had 10% of your gross left.

If you dont like the price of petrol dont pay for it. Use alternative means of travel. :O I know its shocking. There are travel options other than the car. WHY HASNT THE PRESS REPORTED IT????

At the moment I drive about 20km a week. I walk, ride my bike and catch the bus far more often. Im sorry if the sugestion of travelling by a different method is painful to people

If you dont like the price of petrol dont pay for it. Use alternative means of travel. :O I know its shocking. There are travel options other than the car. WHY HASNT THE PRESS REPORTED IT????

At the moment I drive about 20km a week. I walk, ride my bike and catch the bus far more often. Im sorry if the sugestion of travelling by a different method is painful to people

Oh, and don't buy makeup, or plastic, or any food. See, you can't just avoid oil, my friend. It affects EVERY aspect of our (US) economy. We transport most of our goods by truck. We use oil in many of our products.

And *gasp* most of the US doesn't have good mass transit. And I'd love to see you ride a bike from LA to Temecula every day. I know, I know, then sell your house and move, no? Except the housing market is depressed and many people are underwater on their homes as well. Not to mention the existence of spouses who oftentimes don't work in the same area you do.

And, of course, none of that weighs in on whether or not one would be able to ride their bike 20km, seeing as that's not a particularly easy task, and it does require quite a bit of time (I used to do it when I lived in MN).

Here's Exxon for example for '07

http://www.hoovers.com/exxon-mobil/--ID__10537,period__A--/free-co-fin-income.xhtml

They payed about $30B in taxes on an income of $70.5B. That's just about 42%. See the problem with this is that's calculated AFTER they write off all of their operating costs. The actual amount is more like $171.7B, the gross profit, which would be equivalent to my regular income, since I don't get to write off my rent, or my car, or any of the other things I put into my household.

And what's 30/171.7? That's less than 18% in taxes.

And, actually, Smunk, no, I didn't, but we're an exception. I agree corporations pay that. Just like families pay property taxes and vehicle taxes and social security(which, let's face it, is a tax) and sales tax, etc.

And if your counting the sales tax on the things they sell, they don't pay that. The consumer pays the sales tax. Yes, they pay sales tax on things they consume, just like you do.

You'll notice that after all the taxing, they make a 10%. I bet you'd love it if every year you had 10% of your gross left.

I'm not talking about what they get to "write off" I'm asking about what they pay. Is it reasonable to guess they pay more than 35% before all the "writing off" happens? Yes.

I get to write off my groceries on my taxes, it doesn't mean I don't have to pay for them at some point.

Also, Joc. you don't pay taxes on your gross income, you don't even pay it on your adjusted gross income, because you do get to write things off, like your standard deductions and exemptions, you could file long form and deduct more if you spend enough.

My tax rate (without hubby's income) was 25% but my effective tax rate (what I actually paid) was only 9% and yes, I paid car tax and fuel tax and self employment tax and employment tax for my employee, but I still came out ahead. Funny how that works. :rolleyes:

I'm not talking about what they get to "write off" I'm asking about what they pay. Is it reasonable to guess they pay more than 35% before all the "writing off" happens? Yes.

I get to write off my groceries on my taxes, it doesn't mean I don't have to pay for them at some point.

Also, Joc. you don't pay taxes on your gross income, you don't even pay it on your adjusted gross income, because you do get to write things off, like your standard deductions and exemptions, you could file long form and deduct more if you spend enough.

My tax rate (without hubby's income) was 25% but my effective tax rate (what I actually paid) was only 9% and yes, I paid car tax and fuel tax and self employment tax and employment tax for my employee, but I still came out ahead. Funny how that works. :rolleyes:

And so do corporations. The fact is that the oil companies are coming out ahead after paying all that and asking to keep hand outs from the government while coming further out ahead than ever before.

Honestly, did you forget what you were arguing, because "coming out ahead" was what you were arguing isn't relevant?

Meanwhile, I'm not talking about righting off "things". I'm talking about righting off everything that is the cost of running your home (which is what would be comparable to what corporations do). Your effective tax rate is highly unusual in the US. Most people are paying much more than that and you know it. I make a poor example. Clearly, so do you.

Are you fuckwads talking shit to one another again? Don't you get enough of that over at GM?

And so do corporations. The fact is that the oil companies are coming out ahead after paying all that and asking to keep hand outs from the government while coming further out ahead than ever before.
So, lets quit subsidizing them. You don't honestly think I like that do you?

Honestly, did you forget what you were arguing, because "coming out ahead" was what you were arguing isn't relevant?
That's incoherent, rephrase please.

Meanwhile, I'm not talking about righting off "things". I'm talking about righting off everything that is the cost of running your home (which is what would be comparable to what corporations do). Your effective tax rate is highly unusual in the US. Most people are paying much more than that and you know it. I make a poor example. Clearly, so do you.
Most every business gets to write off the running of their business. Your problem is with the oil companies or with the tax code?

Are you fuckwads talking shit to one another again? Don't you get enough of that over at GM?

:( Apparently not.

Here's Exxon for example for '07

http://www.hoovers.com/exxon-mobil/--ID__10537,period__A--/free-co-fin-income.xhtml

They payed about $30B in taxes on an income of $70.5B. That's just about 42%. See the problem with this is that's calculated AFTER they write off all of their operating costs. The actual amount is more like $171.7B, the gross profit, which would be equivalent to my regular income, since I don't get to write off my rent, or my car, or any of the other things I put into my household.

And what's 30/171.7? That's less than 18% in taxes.

You'll notice that after all the taxing, they make a 10%. I bet you'd love it if every year you had 10% of your gross left.
You - and the bigwig oil exec in the OP - are also forgetting the billions Oil gets in subsidies and tax breaks from the US govt: around $18 Billion a year. Part of the reason their profits are so high is that they're allowed to do LIFO accounting, where the cost of the dearest input is used when calculating expenses and tax owing (this alone saves them $5 Bill in tax). So for this entire year, their expenses (as reported to the US tax dept) will report $147 /barrel. It's currently $110, meaning that extra $37 is pure tax-free profit.

Oil companies effective tax rate is around 13% - the average for the largest companies is 18%.

I get to write off my groceries on my taxes, it doesn't mean I don't have to pay for them at some point.Really? Is that because of your dietary needs, or could anyone (potentially) do it?

They payed about $30B in taxes on an income of $70.5B. That's just about 42%. See the problem with this is that's calculated AFTER they write off all of their operating costs. The actual amount is more like $171.7B, the gross profit, which would be equivalent to my regular income, since I don't get to write off my rent, or my car, or any of the other things I put into my household.

Well, that makes sense. Speaking from a financial accounting perspective, the goal of write-offs and other non-cash losses is to encourage corporate investment by mitigating some of the risk involved. In the event that you suffer a huge loss of goodwill on a given acquisition or that an investment ends up being a financial mistake, the effects of writing down that acquisition or depreciating the asset helps offset the blow by providing a shield for some of your cash flow.

Unless you want to seriously discourage business investment, those write-offs are necessary to stimulate the kind of multi-billion dollar expenditures made by companies like Exxon. Ironically, oil might be quite cheap then if only through the complete and utter collapse of the global economy.

Nowhere is the need for write-offs truer than in oil and gas. In fact, they have their own rules designed to encourage investment by providing certain methods for accounting for successes and failures; depending on the company, they may end up capitalizing all of their exploration costs or expensing the failures. Either way, it is meant to encourage investment by providing either a considerable immediate or long-term shield for cash flows associated with exploration.

Also, if gross profits were used to deicde tax paid rather than net profits a firm could conceivably make a loss on the year by having a gross profit and a net loss and then get taxed to make their losses even heavier.

Possibly.

How many other types of businesses receive subsidies on the scale that the oil companies do?
agriculture subsidies dwarf oil subsidies.
which has secondary effect on leather garment industries, foot wear industry.
Cola industry. junk food industry.
Been a massive bail out for the automotive industry.
Banks also receive massive subsidies. screw up and the government comes in and pays your debt.

what you describe is not unique to oil.

Creating a mess creates a need for a job. Just like any other inefficiency. We shouldn't actually prevent me from fucking things up because I'm providing jobs, right?

That's the same argument you made.

You clearly have no understanding how business works. Creating a mess does not create a need for a job, its creating an unnessesary expence to the business owner, this is not a benefit its a COST. Do you understand the difference between a benefit and a cost? If that business owner has to pay for more janitors to clean up after you, and pay yet another employee 30k a year, maybe they may decide the business is no longer profitable due to high labor costs and shut the whole business down. Then you havnt created jobs youve just got a dozen other people fired. Congradulations on your labor plan.

Labor for the sake of labor to create jobs is not creating anything. If it did then we could have legions of people digging and refilling the same holes all day for a paycheck.

Your not creating jobs by being messy, your just transferring the same money from the business to the janitor. You have created nothing and just caused damage that the business has to pay for thus making everyone lose. Including customers who must now pay higher prices to help cover the new expences you have created.

8% profit margin? That's obscene for such a risk-free investment as oil. Tesco, a supermarket chain in the UK, has a 4.8% margin and considering some of the markets it targets I would hazard that it is in a more risky business (That is it sells many luxury and financial products as well).

8%?! That's ludicrous!

agriculture subsidies dwarf oil subsidies.
which has secondary effect on leather garment industries, foot wear industry.
Cola industry. junk food industry.
Been a massive bail out for the automotive industry.
Banks also receive massive subsidies. screw up and the government comes in and pays your debt.

what you describe is not unique to oil.

banks and the automotive industry are interlocked with oil. roadbuilding and maintainence subsidises all three, along with paving and road building and maintainence contractors of course.

as for those other compairisons, none split the pie in as small a number of pieces, so while total subsidy to them as and industry might be greater, it is a largess that gets devided into MUCH smaller pieces. oil there are really only seven or eight major players, to split the WHOLE pie.

at any rate, back to my origeonal point. as long as railroads have to pay taxes that build roads while having to build and maintain their own right of way, turn about to create a level playing field is fair play, for oil company taxes to pay for public transportation of all forms, including rail and other guideway based.

8% profit margin? That's obscene for such a risk-free investment as oil. Tesco, a supermarket chain in the UK, has a 4.8% margin and considering some of the markets it targets I would hazard that it is in a more risky business (That is it sells many luxury and financial products as well).

8%?! That's ludicrous!




Lolz at the UK. the average profit for the S&P 500 is 8.5% so oil is less profitable then other industries in the US. seems even when we are in a recession our companies can turn a better profit. average for energy companies over all is 9.7%. so oil companies are below average net profit earners in the US and make considerably less profit then other sources of energy.

also supermarkets tend to have lower profit margins then most companies because it is very competitive and food ranks higher then oil on needs list. you can save oil by taking the bus to work. you can only skip food by not eating and starving to death.

8% profit margin? That's obscene for such a risk-free investment as oil. Tesco, a supermarket chain in the UK, has a 4.8% margin and considering some of the markets it targets I would hazard that it is in a more risky business (That is it sells many luxury and financial products as well).

8%?! That's ludicrous!

http://i61.photobucket.com/albums/h57/texasrainmaker/ProfitsOilVsOtherIndust3rdQ2005.gif

As you can see, its above average but not particularly unusual. The data is 3 years old but the margin for oil is still the same and I doubt that the margins for the other industries have changed that much, except for banks in this last few months.

http://i61.photobucket.com/albums/h57/texasrainmaker/ProfitsOilVsOtherIndust3rdQ2005.gif

As you can see, its above average but not particularly unusual. The data is 3 years old but the margin for oil is still the same and I doubt that the margins for the other industries have changed that much, except for banks in this last few months.


Something doesnt add up. Oil companies have smashed previous earning records in a very short period of time. Consumption and supply has remained at least thumbnail stable during that timetable yet profits have soared. The only possible mathmatical conclusion is that the oil companies profit margins have dramaticaly increased from what they were a year or two ago even. Im suggesting that consumers were more comfortable with the oil companies profit % before (which was still considerable) then the new levels of profit they're receiving now. Since oil is in essence a matter of national security and not just a market economy, people arnt comfortable with paying such high profit margins on an absolute nessesity.

They say grocery stores only profit a few % points from food but attempt to make their money on volume. I dont think consumers tolerate a high profit rate on life sustaining absolutly nessesary for life items. The oil companies are trying to establish a new higher acceptable level of profit from the socially agreed apon old profit levels and people are complaining.

also supermarkets tend to have lower profit margins then most companies because it is very competitive and food ranks higher then oil on needs list. you can save oil by taking the bus to work. you can only skip food by not eating and starving to death.

The cost of food and oil are intertwined and impossible to separate. And your not avoiding using oil by taking the bus, youve just changed the shape of the container thats burning oil to haul you around.

Something doesnt add up. Oil companies have smashed previous earning records in a very short period of time. Consumption and supply has remained at least thumbnail stable during that timetable yet profits have soared. The only possible mathmatical conclusion is that the oil companies profit margins have dramaticaly increased from what they were a year or two ago even. Im suggesting that consumers were more comfortable with the oil companies profit % before (which was still considerable) then the new levels of profit they're receiving now. Since oil is in essence a matter of national security and not just a market economy, people arnt comfortable with paying such high profit margins on an absolute nessesity.

They say grocery stores only profit a few % points from food but attempt to make their money on volume. I dont think consumers tolerate a high profit rate on life sustaining absolutly nessesary for life items. The oil companies are trying to establish a new higher acceptable level of profit from the socially agreed apon old profit levels and people are complaining.

ExxonMobil's profit margin only increased from 9.7% to 10.0% between 2005 and 2007. I'm sure you would find similar increases at the other big oil companies.

The currently increasing profit levels are not being made because of increases in the price of refined products - the things that consumers and businesses buy. The record profits are being made by selling crude oil to refineries. I'm sure you're aware that crude oil is selling at record levels but that is not something that oil comapnies can control.

The downstream part of the operations are suffering under the high price of oil, as it becomes an input cost in refining to produce petrol and other oil products. It would be unfair to accuse the oil companies of exploitation here as they make relatively small profits and even losses when they sell refined products.

The cost of food and oil are intertwined and impossible to separate. And your not avoiding using oil by taking the bus, youve just changed the shape of the container thats burning oil to haul you around.

i am not buying the oil. just a ride. since the city governments subsidizes many of the buses the price for that ride stays much more steady then oil for as prices go up the city ends up buying the oil.
also the ones in my city run on LPG.

banks and the automotive industry are interlocked with oil. roadbuilding and maintainence subsidises all three, along with paving and road building and maintainence contractors of course.

as for those other compairisons, none split the pie in as small a number of pieces, so while total subsidy to them as and industry might be greater, it is a largess that gets devided into MUCH smaller pieces. oil there are really only seven or eight major players, to split the WHOLE pie.

at any rate, back to my origeonal point. as long as railroads have to pay taxes that build roads while having to build and maintain their own right of way, turn about to create a level playing field is fair play, for oil company taxes to pay for public transportation of all forms, including rail and other guideway based.


Roads are not a subsidy they are a public good. Unless you think you can get to the hospital in 5 minutes by subway. When my grand dad had a heart attack it was roads that allowed the ambulance to get to our home and get him to the hospital in enough time to save his life.

And taxes on Rail roads don't even cover the money the government gives to amtrak every year. Also last time I checked gas stations have to pay property tax as well.

Lolz at the UK. the average profit for the S&P 500 is 8.5% so oil is less profitable then other industries in the US. seems even when we are in a recession our companies can turn a better profit. average for energy companies over all is 9.7%. so oil companies are below average net profit earners in the US and make considerably less profit then other sources of energy.

also supermarkets tend to have lower profit margins then most companies because it is very competitive and food ranks higher then oil on needs list. you can save oil by taking the bus to work. you can only skip food by not eating and starving to death.Lolz at the UK? You like getting ripped off by the companies you buy from?

The stability of supply and demand in the oil industry suggests that they could operate at much lower profit margins. However, the companies refuse to compete more heavily than they currently do, because there is so little risk from another competitor emerging to attack on their profit margins.

It's not like the oil companies are constantly having to release new products and having the worry about the possibility of the products failing.

So yes, I believe oil profit margins should be at 5% or less. They have no honest reason for aiming higher.

Lolz at the UK? You like getting ripped off by the companies you buy from?

The stability of supply and demand in the oil industry suggests that they could operate at much lower profit margins. However, the companies refuse to compete more heavily than they currently do, because there is so little risk from another competitor emerging to attack on their profit margins.

It's not like the oil companies are constantly having to release new products and having the worry about the possibility of the products failing.

So yes, I believe oil profit margins should be at 5% or less. They have no honest reason for aiming higher.

How do you propose they lower their profit margins?

How do you propose they lower their profit margins?Are you really asking that question...? *blinks*

Are you really asking that question...? *blinks*

Yes, I believe I am. Are you going to answer it?

Yes, I believe I am. Are you going to answer it?I just don't see how the question is pertinent. You either increase expenses or reduce revenue.

I just don't see how the question is pertinent. You either increase expenses or reduce revenue.

I'm sure the shareholders will have something to say.

Here in the US, if you have any sort of retirement fund (IRA, Mutual fund, 401K) you probably hold 20 to 30% of that in the form of funds invested in the oil industry.

You see, it's not a few oil barons who make the profit. It's investments by middle class as well as upper class Americans.

I'm sure the shareholders will have something to say.

Here in the US, if you have any sort of retirement fund (IRA, Mutual fund, 401K) you probably hold 20 to 30% of that in the form of funds invested in the oil industry.

You see, it's not a few oil barons who make the profit. It's investments by middle class as well as upper class Americans.

Which is why ExxonMobile stock is at its highest point int he last year! No, wait, it's at its lowest.

I'm sure the shareholders will have something to say.

Here in the US, if you have any sort of retirement fund (IRA, Mutual fund, 401K) you probably hold 20 to 30% of that in the form of funds invested in the oil industry.

You see, it's not a few oil barons who make the profit. It's investments by middle class as well as upper class Americans.As opposed to the shareholders of more competitive companies?

If companies fail to compete to the best of their abilities then they should be broken up to stimulate competition in the market. And since ExxonMobil were forced to split once before, why shouldn't it happen again.

That extra 3% could and should be used to fund research into alternative energy sources or used to reduce prices.

Lolz at the UK? You like getting ripped off by the companies you buy from?
if you consider walmart food prices getting ripped off. more then likely the higher profit margins are from better management. something like one half what you pay for food in the UK.


The stability of supply and demand in the oil industry suggests that they could operate at much lower profit margins. However, the companies refuse to compete more heavily than they currently do, because there is so little risk from another competitor emerging to attack on their profit margins.

It's not like the oil companies are constantly having to release new products and having the worry about the possibility of the products failing.

So yes, I believe oil profit margins should be at 5% or less. They have no honest reason for aiming higher.

not all good profit margins come from screwing the consumer over. look at walmart in the food industry. highest profit margins in the industry but also the lowest end consumer cost.

besides at current oil prices that would be what 9 cents cheaper a gallon while noticeable it would undue price increases. and falls short of what the government gets in taxes on gas. ( about 58 cents a gallon)

Which is why ExxonMobile stock is at its highest point int he last year! No, wait, it's at its lowest.

It's a good investment.

As for the Infinite Dunes saying that they should be forced to lower their profits, please go back to business school. That's like saying, "lawyers should be forced to lose some of their cases if they are too successful".

And Exxon does spend money on alternative energy (they own most of the solar patents now, because they bought up most of the successful US solar companies, and own the entire nuclear fuel cycle in the US).

If gas ever goes away, they'll already be sitting in charge of the next energy cycle.

As for the Infinite Dunes saying that they should be forced to lower their profits, please go back to business school. That's like saying, "lawyers should be forced to lose some of their cases if they are too successful".

No, it's almost exactly like saying that lawyers should be encouraged take on reduced fee or pro bono work for the good of the community.

And wouldn't you know it, the American Bar Association and the Model Rules of Professional Conduct agree.

No, it's almost exactly like saying that lawyers should be encouraged take on reduced fee or pro bono work for the good of the community.

And wouldn't you know it, the American Bar Association and the Model Rules of Professional Conduct agree.

Nope, not the same thing at all.

The sign of a lawyer's success should be how many cases they win. After all, their clients are only interested in winning.

An oil company, on the other hand, is really a vehicle for making money for stockholders, and their success is how much money they make.

Nope, not the same thing at all.

The sign of a lawyer's success should be how many cases they win.

No, law, like any other business, measures success in terms of dollars. A successful law firm builds a reputation, and is thus able to attract clients, and thus increase profit, but law is no more or less a business than any other. Winning cases is a means, not an end.

A law firm seeks to make money. An oil company seeks to make money. A law firm makes money by attracting clients. An oil company makes money through the purchase, resale, and refinement of oil. Successful law firms don't represent clients out of the goodness of their hearts, any more than exxonmobile hands out free barrels of oil. Law firms, like oil companies, do their respective business to make money. They represent clients, for money. They bill clients, for money. They win cases for those clients so that client will return in another time, and pay money, and he will tell his friends how good the firm did, so that the firm can have them as clients, for money.

The goal of the law firm is not to win, it is to profit. Zealously representing your client serves two interests: it builds a reputation, and conforms to the requirements of the profession. If you think law isn't just as much a business as any other you have a skewed perspective of most legal work.

No, law, like any other business, measures success in terms of dollars. A successful law firm builds a reputation, and is thus able to attract clients, and thus increase profit, but law is no more or less a business than any other. Winning cases is a means, not an end.

A law firm seeks to make money. An oil company seeks to make money. A law firm makes money by attracting clients. An oil company makes money through the purchase, resale, and refinement of oil. Successful law firms don't represent clients out of the goodness of their hearts, any more than exxonmobile hands out free barrels of oil. Law firms, like oil companies, do their respective business to make money. They represent clients, for money. They bill clients, for money. They win cases for those clients so that client will return in another time, and pay money, and he will tell his friends how good the firm did, so that the firm can have them as clients, for money.

The goal of the law firm is not to win, it is to profit. Zealously representing your client serves two interests: it builds a reputation, and conforms to the requirements of the profession. If you think law isn't just as much a business as any other you have a skewed perspective of most legal work.

The best law firms I've seen won without having to go to court. They won during the discovery phase, and forced the other law firm and their client to settle for crumbs.

Of course, for a defense law firm in toxic tort, this means not making a lot of money - to make a lot of money, they would let it go to trial (like an idiot) where it's up to a judge or jury whether they win or lose. More hours on the case means more money.

But defense firms don't like to win by going to trial. They make less money (especially less than most plaintiff's firms). They get a reputation by winning. And that gets them more cases, more customers, and in the end, money.

But winning is the priority.

So yes, I believe oil profit margins should be at 5% or less. They have no honest reason for aiming higher.

Yes, they do. It's called the rate of return expected by investors based upon historical trends in the industry. If they don't hit that level, they are not operating at their most profitable potential and correspondingly their stock price will decline and they will have difficulty obtaining financing for future projects.

I just don't see how the question is pertinent. You either increase expenses or reduce revenue.

Reducing revenues by reducing prices is out of the question. If the oil firms reduce downstream refined product prices they will be selling petrol products massively below cost which is illegal under predatory pricing regulations. If they sell their oil below market price another firm will buy it and then sell it at market price for a handsome profit. All that does is transfer profits from one firm to another leaving industry margins at the same level.

As fpr increasing costs, I wouldn't want to be the CEO who has to tell the shareholders that profits were lower this year because they decided to pay extra for materials or hire unnecessary staff.

So without breaking the law or having the board sacked at the next AGM, how do oil firms reduce their profit margin?

So without breaking the law or having the board sacked at the next AGM, how do oil firms reduce their profit margin?

Maybe they can unilaterally cut the price of their oil...you know, like Mobil did back in the 1950's. I seem to recall a bunch of oil producers forming an organization known as OPEC in retaliation, although who cares what they think?

if you consider walmart food prices getting ripped off. more then likely the higher profit margins are from better management. something like one half what you pay for food in the UK.I blame the French. They insist on the CAP which mainly goes to subsidise big business and not the little guy as originally intended. But that's another discussion.

not all good profit margins come from screwing the consumer over. look at walmart in the food industry. highest profit margins in the industry but also the lowest end consumer cost.No, in Walmart's case it comes from screwing the employee and the producer who are in less of a position to do something about their grievances. It's very definitely good business practice.

besides at current oil prices that would be what 9 cents cheaper a gallon while noticeable it would undue price increases. and falls short of what the government gets in taxes on gas. ( about 58 cents a gallon)There's something wrong with the grammar of that sentence and I can't understand what you're trying to say.

It's a good investment.

As for the Infinite Dunes saying that they should be forced to lower their profits, please go back to business school. That's like saying, "lawyers should be forced to lose some of their cases if they are too successful".

And Exxon does spend money on alternative energy (they own most of the solar patents now, because they bought up most of the successful US solar companies, and own the entire nuclear fuel cycle in the US).

If gas ever goes away, they'll already be sitting in charge of the next energy cycle.I'm not saying forced to lower profits, but if the market is not functioning properly then there's no use blathering about an invisible hand. The government should step in and ensure that the conditions that are needed for competition to take place.

Lobbying against renewable energy and then getting other people to take the risk of investing and them buying them out the successful ones is hardly a risky business strategy. And a monopoly is nothing to trumpet about.

Yes, they do. It's called the rate of return expected by investors based upon historical trends in the industry. If they don't hit that level, they are not operating at their most profitable potential and correspondingly their stock price will decline and they will have difficulty obtaining financing for future projects.So if profit margins were 20% and had been 20% throughout the past historical trends then that would make it alright? Who's that poster who has the sig that says 'Tradition just means it's broke and we ain't fixing it'.

Besides, investors hardly look at just RoI. They consider the risk of the investment as well -- and big oil is no risk. Indeed, it's what it's famed for.

Do other businesses pay a proportional amount of tax? Do you think a tax rate that results in almost $4 going to the Government for every $1 of profit is reasonable?

If your paycheck had a tax rate that high could you afford to live?

This is a bit late I suppose, but regardless, if oil companies are making a dollar in 'profit' for every four dollars in tax, they have nothing to complain about. Many people, and many businesses, make zero or even have a loss in comparison to what they pay in tax. Most of America is in the red, and those that aren't are happy to be in the gray.

Do other businesses pay a proportional amount of tax? Do you think a tax rate that results in almost $4 going to the Government for every $1 of profit is reasonable?


When it takes a fleet of Government paid Aircraft Carriers and Battleships and god knows what else floating and flying in the Persian Gulf and the bases to maintain them all just to keep shipping lanes open for your product then why yes it seems quite reasonable.

A bit off topic but i always felt that from the very beginning other countries should have been responsible for transportation and security of thier own shipping lanes. They couldnt keep fighting over shipping lanes forever because eventually thier products must be sold to someone or everyone loses. Believe me, these countries would find a way to get their oil to market even if they had to strap 55 gallon drums on the backs of an army of camels with swim fins. We should only pay for oil that rolls up on our shores and we pay at the pump so to speak. The attitude of Middle Easterners regarding the US would be completly different today if we had that policy from the start. Think of all the people we wouldnt have alienated.

When it takes a fleet of Government paid Aircraft Carriers and Battleships and god knows what else floating and flying in the Persian Gulf and the bases to maintain them all just to keep shipping lanes open for your product then why yes it seems quite reasonable.

A bit off topic but i always felt that from the very beginning other countries should have been responsible for transportation and security of thier own shipping lanes. They couldnt keep fighting over shipping lanes forever because eventually thier products must be sold to someone or everyone loses. Believe me, these countries would find a way to get their oil to market even if they had to strap 55 gallon drums on the backs of an army of camels with swim fins. We should only pay for oil that rolls up on our shores and we pay at the pump so to speak. The attitude of Middle Easterners regarding the US would be completly different today if we had that policy from the start. Think of all the people we wouldnt have alienated.
I can see a couple problems with that...
1) The supply would be unreliable. If a refinery didn't know what it was going to have arrive for the next month, or so, how does it schedule work?
2) Those super-camels are going to cost a hell of a lot more than super-tankers to deliver the oil.

I can see a couple problems with that...
1) The supply would be unreliable. If a refinery didn't know what it was going to have arrive for the next month, or so, how does it schedule work?

They will manage somehow.

2) Those super-camels are going to cost a hell of a lot more than super-tankers to deliver the oil.

But not nearly as much as Aircraft Carriers and supporting military bases.

Aside from creating the framework in which the profit is made, you mean.

Hush, don't remind them of the necessity of having educated workforce, roads or traffic control in order to have profits from oil industry.

They will manage somehow.



But not nearly as much as Aircraft Carriers and supporting military bases.

Not much of a business planner, are we? "...somehow" is not a business strategy. I know, you own a refinery along with those 120 rental units...

And I doubt the Defense budget would change if the CVBGs were relocated to the Indian Ocean or to the South Pacific.

When it takes a fleet of Government paid Aircraft Carriers and Battleships and god knows what else floating and flying in the Persian Gulf and the bases to maintain them all just to keep shipping lanes open for your product then why yes it seems quite reasonable.

A bit off topic but i always felt that from the very beginning other countries should have been responsible for transportation and security of thier own shipping lanes. They couldnt keep fighting over shipping lanes forever because eventually thier products must be sold to someone or everyone loses. Believe me, these countries would find a way to get their oil to market even if they had to strap 55 gallon drums on the backs of an army of camels with swim fins. We should only pay for oil that rolls up on our shores and we pay at the pump so to speak. The attitude of Middle Easterners regarding the US would be completly different today if we had that policy from the start. Think of all the people we wouldnt have alienated.

The Middle East shipping lanes aren't being secured for the sake of the oil companies. American oil exploration is limited in the Middle East with most of the oil produced by the national oil companies. No, the purpose of keeping the shpping lanes safe is to prevent the catastrpohic effects that a disruption would have on the entire economy, not the profits of a few oil firms.

I have always been wary of people who say it's "not fair" that oil companies are making record profits. I chalked it up to being a business owner and possibly being biased, I mean if people are going to pay me, and then whine later.......it's just silly. However, oil is needed for a lot more than gas, it's needed make-up, water bottles, those plastic tubey things I get my I.V. meds through, probably 90% of the product I use in my everyday life.

Even if I cut down on driving......I'm not exactly cutting my consumption of oil. So, I wondered, how much am I getting screwed on this deal?

Not much according to an oil exec.



http://abcnews.go.com/Business/story?id=5574568&page=1
Well, what do you guys think?

I forget if I heard that oil companies make about 8% or 8 cents of profit per gallon. Either way, this seems very reasonable. Espescially when you think of all of the risk that they take in oil exploration. I think some folks (like Barak Obama) are liberals and do not trust markets to do their job of efficiently distributing scarce resources. These folks like to "blame" big companies for their problems or for the problems that they share with the rest of the world. I am unconvinced that even an 8% profit is price gouging or an price collusion. Your typical liberal does not know much about anything other than what they read in bumper stickers anyway. Wow I am grouchy today.

I blame the French. They insist on the CAP which mainly goes to subsidise big business and not the little guy as originally intended. But that's another discussion.

so you advocate shifting the screwing over from the companies to the government like in Europe? seems to be screwed over by companies is less of a screwing over then the government.


No, in Walmart's case it comes from screwing the employee and the producer who are in less of a position to do something about their grievances. It's very definitely good business practice.

which i would be more then happy for them to do. except the supplier OPEC wont let that happen. and 2 too many of their employees require college educations to screw them over.


There's something wrong with the grammar of that sentence and I can't understand what you're trying to say.

yeah looked that over. I meant for the last sentence of your quote to be right above it but i forgot to edit it.
so the entire statement was meant to be you calling for a reduction of profit margins from 8 to 4 % and me pointing out that would save the consumers about 8 cents a galleon 9 at most.

The Middle East shipping lanes aren't being secured for the sake of the oil companies. American oil exploration is limited in the Middle East with most of the oil produced by the national oil companies. No, the purpose of keeping the shpping lanes safe is to prevent the catastrpohic effects that a disruption would have on the entire economy, not the profits of a few oil firms.

As a Captain on Gas (as in hydrocarbon vapour as opposed to gasoline) carriers for "Big oil" I fully concur with your comments. Most oil and gas exploration now has the "local" government as the 51% (or more) shareholder with big and medium oil/gas taking the risk and carrying all the risk. And if the "local" government is not happy and wants a bigger share........... just look at the woes of Shell and BP in Russia. Shell's problems were resolved once the Russians got the 51% stake, BP's are still ongoing and the Russians do not yet have the controlling stake.

The industrialised world needs quantifiable and secure oil/gas supplies more than the producing countries need the income - lets face it, only the top few people in most of the producing countries actually get to see the benefits of that income (think numbered Swiss bank accounts). Thats why the peoples of the Nigerian Delta are so upet and resort to direct action - the oil and gas comes from their land, but they see so little of the profits

I forget if I heard that oil companies make about 8% or 8 cents of profit per gallon. Either way, this seems very reasonable. Espescially when you think of all of the risk that they take in oil exploration. I think some folks (like Barak Obama) are liberals and do not trust markets to do their job of efficiently distributing scarce resources. These folks like to "blame" big companies for their problems or for the problems that they share with the rest of the world. I am unconvinced that even an 8% profit is price gouging or an price collusion. Your typical liberal does not know much about anything other than what they read in bumper stickers anyway. Wow I am grouchy today.

You are very correct. The gas companies like Exxon/Mobil are making about 5 cents per gallon profit, http://www.fool.com/investing/dividends-income/2006/05/24/exxonmobils-400-million-insult.aspxafter they pay all the associated costs (from buying the crude to refining to transporting to the local distributor). Meanwhile, the US government is making 18.4 cents per gallon of gas/diesel fuehttp://www.gaspricewatch.com/usgastaxes.aspl, which is over 250% more than the oil companies make. And just how much is the government spending on producing this product? And let's not forget the state tax that is added. Here in North Carolina, the state makes 26.6 cents per gallon.

And those folks in DC keep talking about the huge profits? Unfortunately, the sheep are not able to figure this out and fall for the mantra of "lets tax them". This is the mantra of the "Let's make them pay their fair share of the taxes" folks in DC. Of course, how many of those members of congress (which is the opposite of progress) are millionaires? http://www.commondreams.org/headlines04/0630-05.htm

Id say its silly that we complain after paying them if we had another product that we could buy...

Unfortunately there's no competing product in the US...I envy Brazil and their ethanol based fuel economy...and am angry that they beat us Americans to it...

I envy Brazil and their ethanol based fuel economy...and am angry that they beat us Americans to it...
Brazil can do it because the economics of making ethanol from sugar cane makes a lot more sense than doing the same with corn. Yes, there was a lot of subsidising and legislating to get the ball rolling, but it pays for itself now and best of all, doesn't seem to be doing nearly as much damage to world food production.

There's scope for more research into ethanol from algae, but even so you're not solving all of the problems. Ethanol still burns and still produces CO2 (not to mention a bunch of other pollutants) and that probably puts it on the back foot a little bit compared to some of the alternatives. That being said, algae of course also absorb a fair bit of CO2 and electric and hydrogen cars are mostly going to be powered by energy produced in conventional power plants so someone needs to be doing the numbers.