The Big Oil Company Scam
We are all feeling the prices at the pump and the ramifications of increased oil prices throughout our economy, so why are the big oil companies still making record profits? Not only are these big oil companies reaping in record amounts of money while consumers suffer, they are also still receiving federal subsidies. What’s up with that?
Personally, I don’t understand how the oil companies can justify passing the entire burden off on the American people of the rising cost of gasoline considering our current economic recession. Exxon Mobil Corp., BP America Inc., Shell Oil Co., Chevron Corp., and ConocoPhillip know high fuel prices are hurting consumers, but on Tuesday they defended their profits of $123 billion last year as in line with other industries. “Our earnings, though high in absolute terms, need to be viewed in the context of the scale and cyclical, long-term nature of our industry as well as the huge investment requirements,” said J.S. Simon, Exxon Mobil’s senior vice president.
“On April Fool’s Day, the biggest joke of all is being played on American families by Big Oil,” said Rep. Edward Markey, D-Mass. Markey wants oil companies to invest 10 percent of their profits to develop renewable energy, as well as relinquish up to $18 billion in tax breaks over 10 years. This money would then be used to support renewable energy and conservation. The oil companies’ response to this proposal is that they have already spent $3.5 billion over the last five years on renewable fuels, and they reject any tax increases. That may be, but it hasn’t been enough, or all of our cars would be getting at least 50 mpg. Without government intervention, the oil companies will continue to gouge the American consumer while making record profits. “These companies are defending billions of federal subsidies … while reaping over a hundred billion dollars in profits in just the last year alone,” stated Markey, chairman of the Select Committee on Energy Independence and Global Warming. The House of Representatives has already approved legislation that will end tax breaks for big oil, while using this revenue to support wind, solar and other renewable fuels. The Senate has yet to pass this legislation.
According to AP writer H. Josef Herbert, “Recently oil prices reached a peak of $111 a barrel. While declining a bit in recent days, the price remains above $100 and there’s talk of $4 a gallon gasoline in the coming months.” Oh yes, the threat of $4 a gallon; I paid $3.99 a gallon today. I have always felt that American gas prices were too low prior to the Bush administration — that these prices did not adequately reflect the value of this limited resource. Now that we are experiencing high gas prices, I can’t help but wonder what I am paying for when oil companies are making record profits and the “supplies of both gasoline and oil seemed to be adequate.” I wouldn’t mind paying the current price for gasoline if the oil companies’ profits were slashed in order to bring about new developments and change in American energy use.
Levying higher taxes on oil companies only reduces the amount of money that they can invest in finding more oil (among other things). Many oil companies have fantastic R&D departments and I think it would be better to force them to research renewable fuels, rather than take the money from them and give it to the government who tends to use it inefficiently. Politicians only pay attention to the whim of the moment and don’t consider long term goals. Ex. Biofuel subsidies are getting misused at the taxpayer expense:(http://www.treehugger.com/files/2008/04/subsidizing-palm-oil-splash-and-dash.php)
Another example of political whims, adding Ethanol to fuel was a huge mistake. Sure, ethanol is cleaner burning that gas, but it is much less efficient. Due to the extremely high octane rating of ethanol, oil companies are reducing the amount of octane that they add to the gas to compensate. This makes it cheaper per gallon for oil companies and less efficient for consumers (in terms of mpg). This means you create less emissions, but you have to fill up your tank more ( = more emissions). It’s all a wash…
If you ask me, I’d rather not give money to the gov’t to waste, I’d rather leave it with oil companies but mandate that they spend it on R&D for renewable energy.
Why is gasoline high?
Government taxes it 50 cents to oil company profits of 8 cents per gallon.
Government regulates the oil industry that further adds cost per gallon.
Environmentalists lobby politicians to prevent oil retrieval in ANWAR and in the Western USA.
Environmentalists have successfully lobbied politicians to prevent new construction of refineries and nuclear power plants that would significantly lower costs.
Did you know?????
that the oil shale in the Western USA contains 5 times more oil than the oil in Saudi Arabia, AND this oil can be retrieved in situ for less than $80 a barrel !!!!
That’s how Capitalism works! Just because my widgets are selling more than your gizmo’s doesn’t mean I have to share profits with anyone! What it does mean is that I made sound and timely investments while you were out buying flashy cars and mammoth houses or whatever. I bought a bike, and oil stocks, I bet on oil, I won fair and square.You didn’t. Next time around, make better judgments and you can join me in the winner’s circle. I’ll give you a little tip, just so you won’t feel too jaded. Buy Uranium stocks, nuclear is going to be big next, but it too, won’t last forever, so when you see a good profit to be made, jump to something else, like solar, if nothing else comes along in the meantime.
P.S. Always buy low, sell high.
I’m a student in Houston, one of the biggest energy cities in the world. We are home to major headquarters for such giants as Exxon/Mobil, BP, and some of the biggest names in oil exploration and drilling. At the University of Houston, where I currently attend, the entire curriculum for Chemistry, Chemical Engineering, Mechanical Engineering, and Business is custom made so that we can be the next generation of cogs in the oil industry.
With all of that said, I can tell you a thing or two about the oil industry. Yes, they do in fact receive the highest tax breaks of any industry, but not just on the federal level. Houston and the surrounding cities actually resort to paying THEM money to stay in and around the area, thus fueling our economy. On top of all of this, they are making record-breaking profits, and I’m not just talking about profits in the here and now; I’m talking about the history of mankind.
What do they do with these profits? I honestly can’t tell you what they do with them. My school is going to pot. Our buildings are falling down and our sidewalks are crumbling, all the while we beg these companies to give us a tiny sliver of their record-breaking profits. There is no mass transportation to speak of in Houston, and what little there is involves archaic bus lines that are not uncommonly packed to 120% capacity. As a whole, Houston has the second highest commute time, the second worst pollution levels (we just dropped a spot this year), and has one of the highest rates of car ownership of any major city (a family of 3 typically has 4-5 cars). Oh, and don’t get me started on the Texas attitude towards large trucks and SUVs.
I’m sick of people defending this industry. When railroads and electricity corporations gouged consumers, we had federal intervention that *gasp* resulted in electricity at a reasonable price for all consumers, as well as a decrease in steel prices and a boost in the economy as a whole! What a concept!!
The time for the government to get involved was 10 years ago. Every second that goes by is a second too long that these corporations have to screw the consumer and the world market as a whole.
“Many oil companies have fantastic R&D departments and I think it would be better to force them to research renewable fuels, rather than take the money from them and give it to the government who tends to use it inefficiently.”
By forcing the first you arrive at the second. Why do you think governmental coercion is any different than governmental taking or any more effective?
The find of an oil reserve in South Dakota, maybe North Dakota, in the early 1950s is estimated to hold as much as 200 billion barrels of oil. Recovery of the oil became cost effective when oil went above forth dollars a barrel. Hundreds of millions of dollars are now being spend developing that oil reserve.
As a reference, that oil reserve may be as much as ten fold larger than the current Saudi oil reserves.
Currently there is some discussion about crude oil being abiotic instead of a fossil fuel. Some scientists believe that crude is constantly produced by some process within the earth that I’m not entirely familiar with.
Real Deal
“What do they do with these profits? I honestly can’t tell you what they do with them. My school is going to pot. Our buildings are falling down and our sidewalks are crumbling, all the while we beg these companies to give us a tiny sliver of their record-breaking profits.”
Simple economics indicates the profits go to the share holders. That includes millions of working people who have 401k plans invested in some portion of the oil industry.
The oil industry and buildings falling down or sidewalks crumbling in Houston are unrelated. Those problems are usually the result of poor city government. As for you school crumbling, that certainly isn’t the fault of the oil industry. It easily could be the result of poor administration or a reluctance on the part of state government to fund the school to a higher degree.
I think you would be surprised at the amount of money your school receives from the oil industry and other industries.
What do you expect the government to do if it gets involved in the oil industry? It’s government’s refusal to allow oil drilling in much of the U.S. and off of our coasts that has made us so reliant on foreign oil and driven up the price of crude oil by limiting the supply to nations who wish to see the United States fall, excluding Canada.
Do you really want the government deciding what type of vehicle you may drive and how many vehicles you may own? Government is too involved in the lives of American citizens now.
As inefficient as business is, it is far more efficient than government. That is the result of the profit motive.There is no incentive for a government to be efficient.
I don’t doubt for a moment that Houston gives tax breaks to all forms of business. The reason is to keep the jobs in Houston. Cities vie constantly to woo large corporations away from one location to another.
If the tax payers of Houston are willing to pay for effective mass transit they will have it. It’s done through taxation. I would very much enjoy mass transit where I live but tax payers don’t want to foot the bill, therefore, we don’t have it.
Don’t beg for something you have no right to. Bust your back side and get rich yourself, but don’t ask for a hand out.
Relying on the government makes one lazy and needy. It destroys you character and ambition. Government is to be watched closely at all time, but not relied on.
Am I in the right place? I thought this was Red,Green, & Blue. But after reading these comments, I’m not so sure.
Timothy, I agree… it looks like the BigOil investors got to this article first and commented- BigOil actually has full time people scouring the Internet for articles that demote oil and promote solar and the like- and they hop right in and start posting their propaganda. These people are sick and greedy, they have lied to us and ripped us off since the first people in government had their own oil companies way back when- they have manipulated the government with their profits to keep them from getting clean and cheaper alt energy off the ground. Why would they want some other company collecting energy as it falls from the sky (solar/wind) when they can pump it and charge so much more, even if they do push us to war over it and pollute our skys and risk our health and rip us off and keep us dependent and steal from our tax dollars so the can search for even more of it.
If you ask me, this article is watered down. America has only just begun to wake up to the evils of Oil and Coal and is not nearly as infuriated as they should be. THE ROOT OF THE MAJORITY OF ALTERABLE EVIL ON THE WORLD TODAY IS OIL. Wars, lies, rip offs, scum on the air, maybe global warming, stealing our tax money, corruption to no end- it is sick and I think these CEOs should be ripped out of their positions and put in prison- no one working for any oil company should be forgiven, they all carry the blame, every last oil and gas employee and investor- greedy sick people of a time that is quickly coming to pass. The next war- is the WAR ON OIL.
Here’s a great start explaining how Solar can power 90% of the US:
http://gas2.org/2008/03/25/how-solar-panels-could-power-90-of-us-transportation
Patrick;
Watch out for the black helicopters and the blue helmets also. Can you substantiate one thing that you posted? Your ramblings sound like the wild conspiracy theories of the fringe right in the 1990s.
I found this site through Firefox stumble.
If you want to Stop the Rocketing Oil Price And US Occupation in Iraq and Afghanistan, please spread this article to your friends:
To read and sign the petition, click:
http://www.petitiononline.com/OilPrice/petition.html
Petition Stop the Rocketing Oil Price And US Occupation in Iraq and Afghanistan!
To: US Congress and US Government
VOA news said that US Congress call 5 biggest oil companies due to the rocketing oil price while the oil companies’ profit reach US$ 123 billions.
There is one oil company profit US$ 40 billion while its investment cost only US$ 100 millions. The profit is 40,000%!
The Oil Companies argue that the rocketing price caused by the high of International Oil Price that reach more than US$ 100/barrel. On the other hand, Oil Companies such as Exxon Mobil, Chevron, Unocal, etc are the Cartel who controlled all oil from its sources all over the world including Arab and Indonesia (except Iran). That is why the rocketing “International Oil Price” is caused by the Cartel: The US Oil Companies which operate all over the world.
The US Oil Companies’ Monopoly increased after 2 biggest oil exporter countries: Iraq and Afghanistan fall into US occupation. These 2 countries’ oil is monopolized by the US Oil Companies.
President George W Bush and Vice President Dick Chenney are working in oil field. That is why the US Oil Companies get a strong support from the US Government.
To stop the rocketing oil price, the monopoly of US Oil Companies’ Cartel should be stopped. Stop US occupation in Iraq and Afghanistan so the oil monopoly by the US Oil Companies that make the rocketing oil price end here.
Stop the US Occupation in Iraq and Afghanistan now!
Sincerely,
The Undersigned