A more productive approach to big oil
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John Harvey
Published: August 7, 2008
Among a spate of negative TV ads released by John McCain in the last couple of weeks, one tells us Barack Obama is somehow responsible for the high prices at the gas pump because Obama realizes that we cannot drill our way out of our energy problems.
McCain’s ad implies that the whole problem would magically disappear if Obama would just let us spend our vacations swimming between oil derricks at Virginia Beach, Ocean City and the Outer Banks.
Then, this week the oil companies had to report their profits for the last calendar quarter. Oops. Exxon reported a profit of $11.68 billion for the period of April-June 2008; that’s a profit (not gross income,
but absolute profit) of $89,133.09 PER MINUTE. “Poor” Chevron had a profit of only $5.98 billion, or $45,634.92 PER MINUTE. (I know some people who don’t make that much money in a whole year).
Obama proposes cracking down on oil speculators, imposing an excess profits tax on the biggest oil companies, ending tax breaks for the oil and gas industry and using the money obtained from all this
to develop alternative energy sources.
Big oil’s profits for the last quarter indicate that Obama’s ideas, which offer solutions rather than just attacking his opponent, might be a more productive approach.
JOHN HARVEY
Manassas
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Posted by ( RonCharest ) on August 10, 2008 at 8:54 am
As a comment on opening up more offshore leases for Big Oil: The oil companies already own millions of acres of of shore leases, available to them for drilling. These leases were obtained years ago when oil was much less expensive than it is now; meaning the price of the leases reflected the then current price.
The royalty structure to oil companies for extracting resources from public lands was rigged years ago to charge the oil companies a fraction of what other countries would charge. This means less tax revenue than we the American public should be receiving for our property.
The estimated oil contained in those leases is an asset that the oil companies can use to prop up their stock values and borrow against. In effect, giving away more off shore leases jacks up the net assets of the oil companies - with no additional tax revenue in return.
Sweet deal, if you can get it.
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Posted by ( jVA ) on August 08, 2008 at 7:54 pm
“Man you must be getting a little nervous about the Presidential Election. The race is virtually tied which is amazing “
Tied? What have you been smoking? You must have me confused with somebody else. I’m not nervous at all.
Not sure if you know this or not, but we elect a President by electoral college. How close do you think McCain is right now?
http://www.realclearpolitics.com/epolls/maps/obama_vs_mccain/
http://www.electoral-vote.com/
270 votes wins it, smart guy. Better hope McCain can win Florida, Ohio, Michigan, Pennsylvania AND Virginia. Guess we’ll see in about eighty days.
“That little Chicken won’t even go on Fox News to debate. “
Good. I don’t want any Democrat to go on Fox ever. Why pretend Fox is a real news channel? Its news for people who think patriotism is slapping a flag sticker on their Hummer. yee-haw.
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Posted by ( RonCharest ) on August 08, 2008 at 4:55 pm
As I’ve already posted on another thread; The oil Exxon is selling today is from wells drilled back when oil was $30 / barrel or less.
The price of oil is set by the global markets, not any single oil company. Those wells were profitable at $30 / barrel, and now the oil being extracted is selling for > $120. Thats the reason for sudden astronomical profits.
Despite all that profit, Big Oil is not actively searching for new oil reserves, not opening up new wells in the millions of acres of offshore leases they already hold, and not investing in alternative energy sources.
If they don’t do this, I see not problem with the federal government doing it for them through a windfall profits tax.
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Posted by ( cobra ) on August 08, 2008 at 3:48 pm
Ray,
I know you said that in jest but I don’t work for big oil. I work for a non-profit who assists minority business owners with getting established to support Government Prime Contracts. I work closely with the SBA to ensure the process is fair for all. I currently have about 7 cases that involve small Hispanic owned Business that are trying to get a share of the Federal Contracting Pie. I show no bias to any of the companies that I assist. We assist them with hiring practices such as compliance with E-Verify. I get about a 2% raise each year but the work is very rewarding when I see contracts awarded by the Federal Government to these small minority owned firms. I am just against any demonization of a legitimate American Company who supplies a vital product to the American People. Not saying they are perfect but I don’t buy into all the conspiracy theories about big oil.
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Posted by ( cobra ) on August 08, 2008 at 3:12 pm
JVA,
Based on your posts, have serious doubts that you can even count to eight so give it a rest. Typical lib missing the point. If you hate the oil companies so bad then quit buying gas. Go ahead and boycott the product. Get your bicycle out and start peddling. It’s is libs who have turned the light out on Americans demand to tap into our own resources. Old Stretch Pelosi left town to promote her new book leaving Americans to again question her leadership. Just the party of NO. Man you must be getting a little nervous about the Presidential Election. The race is virtually tied which is amazing considering the effort put forth by the main stream media to get BHO elected. That little Chicken won’t even go on Fox News to debate. That idiot even made the following statement at a recent gathering. “My Friends, we live in the greatest nation in the history of the world. I hope you’ll join with me as we try to change it”. Need I say more?
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Posted by ( raywilliams ) on August 08, 2008 at 1:22 pm
First, you have to understand cobra works as a shill for Big Oil, so he is getting paid to support the industry. Note no spelling errors or grammer problems with these oil postings.
Second, Congress should simply require Big Oil invest their profits in drilling in the leases THEY ALREADY OWN. Why grant new fields when they won’t drill in fields already approved? They DON’T WANT to find more oil, they want to up the price on existing oil. More profits, more bonuses for the big wigs. You don’t see Dick Cheney concerned about the price of Coke. He’s getting his slice of the oil pie.
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Posted by ( jVA ) on August 08, 2008 at 11:29 am
“I also want to investigate Pepsi, Coke, Budweiser, and Deer Park Water to name a few. A gallon of Coke now costs over $8.00.“
This is like the eighth time Cobra has posted this comment in the past two days, so he must think he’s making some brilliant point.
Nobody has to buy a gallon of Coke to get to work. Our entire economy isn’t tied to the cost of a bottle of Pepsi.
This is like comparing the cost of cancer medicine to the cost of a Snickers bar.
“Also the government already gets plenty of taxes from the oil industry “
I don’t disagree with you guys that the windfall profits tax might not be the way to go. But NewsJunky this is one statement I’m not sure I agree with. If I remember correctly, the energy bill congress passed in 2005 gave Exxon and the rest something like $14.5 billion in tax breaks.
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Posted by ( NewsJunky ) on August 08, 2008 at 10:15 am
11.7 Billion in profit compared to the revenue of 138 Billion only gives you an 8% return. Really not all that impressive it’s just dealing with a really high volume of product. On a smaller scale you could say a lemonade stand that made $.80 profit with revenue of $10 which comes out to the same 8% return should pay the government a windfall profit tax, now that’s just silly! Also the government already gets plenty of taxes from the oil industry not to mention taxing consumers on every gallon; this is just a socialistic money grab that would kill any incentive to be successful. Plus this wouldn’t solve the underlying issue of supply one bit and more than likely the oil industry would have to find a way to pass this money grab onto the consumer and in the long run further hurt the consumer. One of the greatest things about this country is the fact that there is no limit to success and something like the socialistic concept of windfall profits would kill that spirit altogether.
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Posted by ( cobra ) on August 08, 2008 at 10:02 am
I also want to investigate Pepsi, Coke, Budweiser, and Deer Park Water to name a few. A gallon of Coke now costs over $8.00. Deer Park Water is also about the same costs for a gallon of water. None of those companies has to research/find/drill/refine their product before it comes to market. Just want someone to tell me what is an acceptable profit margin for oil. They only make $.09 per gallon. Federal Government gets twice that through taxes. Come on Libs, are you with me??? Let’s get all those companies executives up on Capital Hill to see what the hell is going on. I want cheap Coke and I want it now.
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Posted by ( pwanon ) on August 08, 2008 at 7:36 am
You do realize, of course, that if you tax these “excess” profits the oil companies are making, they’re not simply going to accept less revenue, right? No…what they’ll do is simply raise the price of gasoline to compensate for what the government takes out of their profits. I know that saying “we’re gonna go after big oil’s profits” is a nice bit of socialist propaganda…and I’m sorry you’re a fool enough to fall for it…but it’s simply not going to get us anywhere.
Of course, we wouldn’t be in this mess if our leadership in both parties had the slightest bit of foresight to allow us to continue to explore for new sources of domestic oil, while at the same time developing technology for alternative sources of energy. But since we, as a nation, haven’t made a commitment in either direction (or both) for quite some time, the American consumer gets to pay for it now.
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