Big Oil's big 'problem'

[xeno2060]

My life fades. The vision dims. All that remains are memories. I remember a time of chaos. Ruined dreams. This wasted land. But most of all, I remember The Road Warrior. The man we called "Max". To understand who he was, you have to go back to another time. When the world was powered by the black fuel. And the desert sprouted great cities of pipe and steel. Gone now, swept away. For reasons long forgotten, two mighty warrior tribes went to war and touched off a blaze which engulfed them all. Without fuel, they were nothing. They built a house of straw. The thundering machines sputtered and stopped. Their leaders talked and talked and talked. But nothing could stem the avalanche. Their world crumbled. The cities exploded. A whirlwind of looting, a firestorm of fear. Men began to feed on men. On the roads it was a white line nightmare. Only those mobile enough to scavenge, brutal enough to pillage would survive. The gangs took over the highways, ready to wage war for a tank of juice. And in this maelstrom of decay, ordinary men were battered and smashed. Men like Max. The warrior Max. In the roar of an engine, he lost everything. And became a shell of a man, a burnt out, desolate man, a man haunted by the demons of his past, a man who wandered out into the wasteland. And it was here, in this blighted place, that he learned to live again

 

[ja1484]

Originally posted by: DisgruntledVirus
When they make how ever many billions in PROFIT they made last year I realized that they weren't going to reduce the price anytime soon without government regulations.

The price increase is mainly due to supply remaining roughly the same while WORLD demand rises. The falling dollar is an additional kick in the nuts as well.

What people seem to not understand is that Big Oil's profit margins haven't changed since the days of cheap gas. They're still making the same percentage profit as they were on cheap gas. It adds up to more absolute dollars now because inflation has decreased the dollars buying power (as it does to all currencies over time), and because more oil is being used than ever before.

In other words, Exxon and ConPhil aren't posting record profits because of ridiculous markups, they're posting record profits because they're selling more of their product than ever.

I don't begrudge them one bit. They're for profit companies providing highly in-demand products. Why SHOULDN'T they be making a ton of money, and why SHOULD the government be called in to stop them?

It seems to me that people who have a problem with that have a very poor fucking grasp on free market principles and economics.

 

[0roo0roo]

Originally posted by: LegendKiller

Originally posted by: 2Xtreme21
The only thing I don't get is why these oil companies need to continuously be granted billions of dollars in subsidies by the federal government as well as remain exempt from many taxes paid by every other multi-billion dollar corporation. Where is that money going other than just the pockets of oil execs?

In April, roughly the same lineup defended their firms before a House committee. The hearing was ostensibly called to ask the executives why they needed some $18 billion in federal subsidies in light of their record profits, but quickly became a Q&A on bigger questions in the energy business.

Link

Do you realize how much in taxes they pay? Exxon alone paid almost $30bn in taxes last year.

That 18bn is jack shit.

that doesn't make subsidies right.

course that also doesn't mean its wrong for them to be making record profits unless they really are colluding with each other. some of the questions i heard asked were frankly anti capitalist

 

[ja1484]

Originally posted by: Fingolfin269
Can someone explain the supply part of the equation to me? In the 70s there was a supply problem. People went to the pump and hoped gas would be there. Today it just seems to be a fabrication that results in speculators forcing the barrel prices ever higher.

Sure. Here are a few bullet points:

- China is using more energy than ever as it modernizes its infrastructure, more and more semi-skilled labor (read: building wal-mart products) gets shipped over there from here in the US, and the standard of living in China rises.

- India is using more energy than ever as it modernizes its infrastructure, more and more skilled IT work gets shipped over there from here in the US, and the standard of living in India rises.

- The big one people tend to forget: OIL. IS. USED. TO. MAKE. AND. DO. EVERYTHING. And I mean everything. The soles of your Nikes? Petroleum product. The plastic wrap your new iPod came in? Petroleum product. The iPod case itself? Petro. The plastic cups and plates at your memorial day BBQ today? Petroleum product. Your polyester fucking shirt? P-e-t-r-o-l-e-u-m product. Plastic in your new Logitech mouse? Crude O. Synthetic foam mousepad? Oil.

So, we need energy to make stuff, and it has to come from oil. Then we need the chemicals derived to make the stuff. Then we need fuel, from oil natch, to ship the stuff to the store. Then we need more energy to keep the store open.

This is why you hear the phrase "energy drives the economy".


Now, before the anti-globalization morons get on their "STOP OUTSOURCING JOBS" high horse and go for a twofer railing against big oil AND outsourcing, let me explain to you why outsourcing is good:

Here's an example: Say we outsource the manufacturing of air conditioners to China, and assume the final quality of the product is equal (not always the case, but getting better). An American loses his job. A little known fact of life is that you cannot pick one skill, start a career in it, and stay in that career forever. That was how it worked up until the 70s. Those days are over now. You have to constantly retool your skills to be an in-demand worker.

So, the American that lost his job to the Chinese factory goes back to community college for a year and becomes an air-conditioning repairman. He is now a lucrative service employee.

Let's look at the results of this outsourcing:

1) Chinese person is employed.
2) Chinese person's standard of living rises, allowing him to buy goods or services.
3) Some of these goods and services might well be produced in America.
4) American guy is still employed after switching jobs.
5) American guy can buy cheaper air conditioning units.
6) Since air conditioners are cheaper, there is a larger market for them AND for air conditioning repair!
7) Since the Chinese standard of living is rising because more chinese are working lucrative jobs, they start buying air conditioning units too!
8) If American guy were to move to China, he would still have job security!


Don't tell me globalization is bad. You're a socialist idiot if you think that's the case. Globalization develops the world, spreads wealth, and makes life at home better, as long as you're willing to adapt your employable skills and not be a lazy ass.