Just recently, ExxonMobil reported record profits for the previous quarter, which makes us all wonder about the outrageous gas prices we've been having. However, even before the lastest outrageous run-up in prices, ExxonMobil's second-quarter earnings were up 35% from the previous year's second-quarter earnings. That's the third-highest reported quarterly profit in the company's history. And the recent quarter has just become their highest. So why are Exxon executives enjoying record-breaking profits, while you're struggling to afford gassing up your car? One word: Greed.
And now, Big Oil is using a national tragedy, Hurricane Katrina, as an excuse to raise gas prices even higher, as well as advocate for drilling off the coasts of California, Florida and North Carolina, and even in the Great Lakes. And let's not forget the Arctic National Wildlife Refuge either.
Plus, instead of investing their monumental profits in renewable energy and technologies, which would save you big bucks in the long run, ExxonMobil is reinvesting in itself. Exxon is spending millions on its own stock. And still, Congress passed and President Bush signed a misguided energy bill that gives oil companies like Exxon more than $14 billion in subsidies.
The United States only has 2 to 3% of the world's oil resources, yet Americans consume 25% of the world's oil. As long as we remain dependent on fossil fuels for our transportation and energy needs, we will never be independent of foreign oil. The only true path to energy independence is to invest in renewable resources, which ExxonMobil does only minimally, calling it "uneconomic."
ExxonMobil spends millions lobbying Congress for the right to drill in our nation's most pristine wild lands. They are the major oil company still questioning the overwhelming scientific consensus of the connection between burning fossil fuels and global warming. And after all these years, they refuse to pay for all the damage they caused through the Exxon Valdez oil spill.
In the past five years, ExxonMobil has spent nearly $37 million on lobbyists. Why? To ruthlessly push the oil company's agenda on Capitol Hill, which includes opening Alaska's Arctic National Wildlife Refuge and now our nation's pristine coastlines to destructive oil drilling and exploration.
So every time someone buys a tank of gas from Exxon, it helps provide the profit for their efforts to destroy one of America's most pristine wildlife refuges and our nation's shorelines. Meaning every tank of gas from Exxon threatens polar bears, manatees, sea otters, wolverines, caribou, and other wildlife.
Using existing technology to ensure our automobiles get no less than 40 miles per gallon would save four times more oil than we will produce drilling in Alaska's Arctic Wildlife Refuge.
A tank full of gas at today's outlandish prices is about $70. Multiply that times 1 million x 52 weeks, and Exxon will get the message.
Don't put a tiger in your tank. The next time you need gas, drive right on by ExxonMobil to another station.
You do know that oil prices have been going DOWN in the last few weeks, right?
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Exxon is spending millions on its own stock.
That doesn't even begin to make sense. Do you mean they're buying shares back from stockholders? be more clear about things.
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In the past five years, ExxonMobil has spent nearly $37 million on lobbyists. Why? To ruthlessly push the oil company's agenda on Capitol Hill, which includes opening Alaska's Arctic National Wildlife Refuge and now our nation's pristine coastlines to destructive oil drilling and exploration.
I think Ultra made a thread about this that basically said all this "destroying nature" crap was bull.
And why does this whole thing sound like a chain e-mail?
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Using existing technology to ensure our automobiles get no less than 40 miles per gallon
Yeah, that's the first thing the oil companies want to do, make sure people buy less from them.
Call me a tree hugger. Call me what you will. But call me someone who cares about the Earth we live on.
Did you know oil companies only get ten cents per dollar from the pump? The prices at the pump are mostly a non-factor when it comes to their profits.
And by the way, did you know caribou herds have tripled in Alaska since the pipeline was built?
So long.
EDIT: And also, what Wonderbat said. Prices have gone from the Katrina levels of +3 dollars per gallon to around 2.49 per gallon. A fifteen-gallon tank would only amount to almost 40 dollars then. A bit of a long cry from 70 bucks, don't you think?
If I could just find that Pwned! picture...
I heard somewhere (though unconfirmed) that there was a measure stuck into a bill permitting drilling in ANWR that would allow oil companies to sidestep environmental laws. It doesn't just make me angry that they want to do this. It makes me scared.
I heard somewhere (though unconfirmed) that there was a measure stuck into a bill permitting drilling in ANWR that would allow oil companies to sidestep environmental laws.
That wouldn't surprise me in the slightest.
You may be correct in the respect that ExxonMobil's profits for the third quarter are almost 10 billion, and that's a record in American corporate history. True.
However, there's one more thing: their profit margin was only 10%.
So yeah.
All that does is make me feel nauseous. Hundreds of billions of dollars are going into oil exploration each year when any responsible person would put even a tenth of that money into alternative-fuel development. By the way, my company's profit margin doesn't look much nicer.
Oh, and I think it's pretty telling that diesel suddenly cost 15-30 cents more than gasoline last summer and hasn't gone down since. I swear this started about five minutes after CNN ran some story on diesel and hybrid cars. Price-fixing, anyone?
Not to return to an obvious point, but corporations only have one function: to make as much money as possible for its owners (you know, the shareholders) while obeying the law. That means buying something for as little as they can and selling it for as much as they can. Any executive who says otherwise is lying.
But hey, Exxon Mobil is the compilation of a number of companies over the years. It has grown so, of course, the company should be making record profits. It is much larger now than ever before. Even so, their profit margin would be akin to them making only around 10 cents per dollar. Those are not 'obscene' profits.
Exxon's profit of nearly $10 billion was the result of record revenues of $100 billion -- which means that if Exxon were owned by a single person he would have gotten less than a 10% return on his investment. That's a nice return, but it is hardly "excessive" in any sense of the word -- and probably not even worth the risk of even being in the oil business, when you consider that the average rate on a fully-secured mortgage is somewhere around 6%.
Most people who know the energy business see these "record profits" and laugh, because they wouldn't touch these stocks in a million years. The real money in this business is made by investing in companies that most people have never heard of.
And for anyone who insists on engaging in this incessant whining about "price gouging," "collusion," "obscene profits," etc., I'd make the following point . . . If oil companies really had the ability to control prices to the extent you think they do, then you've got to be a moron not to quit your job and go work in the oil industry.
Texaco was in bankruptcy proceedings about 25 years ago. The company was hemorraging cash due to negative profits. All of the E&P and drilling dry holes were bleeding. It was the downstream revenues and profits that kept the company afloat. Now suddenly they start reporting bigger profits and they get demonized? The oil companies sell to DISTRIBUTORS who sell to RETAILERS. This is a SUPPLY CHAIN marketing process. Texaco, Chevron, ExxonMobil, etcetera sells at $x.xx per gallon of gas, the distributors market up the price by y%, to the retailers, and the retailers mark it up by z%. It's not rocket science.
When the hurricanes came, the price went up, AT YOUR LOCAL GAS STATION. (Even though the gas they are selling didn't go up in price while it was in the underground tank, or the truck being driven to replenish the tanks).
Now the price has come back down. Even though everyone thought it would go to $3.00 and stay just to give more profit to the oil companies. This profit index that is shown does not include costs for any of the repair that has been going on in the Gulf to their refineries, their tanker hookups, docking facilities, and offshore drilling rigs. It is every middle man along the way between your gas tank and the refinery that is making extra profit by raising the price on stock that was purchased at the lower price.
Think about it.
Finally...what's wrong with making a profit? There's nothing wrong with profit and compared to other industries the petroleum industry's profits are far from the highest.
It's just the scale (9 billion) that makes everyone go 'OMGZTEHPROFITSOILCOMPANIESAREEVIL!!!11one1one!!'.
It's not IF companies that make a profit that matters. It's HOW they make a profit.
Let me add to Ultra Sonic 007's post,
The price of gas in the US has more to do with what the market will bear than any price fixing on the part of petroleum companies.
The UK is a net exporter of petroleum and yet they pay more for gasoline (petrol) than us folks in the US, simply because their export market will pay more than the domestic market.
There has not been a supply problem, only scared consumers willing to pay more for the price of gas.
Jimro
There has not been a supply problem, only scared consumers willing to pay more for the price of gas.
I dunno about you, but using something up faster than you can produce it pretty much qualifies as a supply problem.
They're a business.
Yeah, so am I. I make computers and sell the parts to them, and I try to do so in a manner that is ethical and responsible. I devote more time, care and attention to each machine I build than Compaq or Sony ever would. I fill them with quality components that won't fail at the end of the warranty period. I use power supplies, motherboards and cases that give my customers all the room they'll ever need to upgrade. I don't use bundling to force people to take software and hardware they don't want. On custom builds, I give the customer exactly what they want, nothing more and nothing less. I provide a five-year warranty, and it isn't void the minute they open up the box to take a look or, God forbid, upgrade it. I have a robust return program and encourage customers to return old stuff for reselling or recycling. I recycle all my paperwork. I donate to charity. Is it profitable? No. Is it easy? No. Is it necessary? No. But do my customers think better of me for it? Yes. Do people willingly choose to buy from me when they can more easily have an off-the-shelf computer from Best Buy? Yes. Is it, all things considered, worth it? Yes.
Exxon, on the other hand, is in the business of energy, and they provide this product in a questionable, if not irresponsible, manner. Why? Because they supply energy in the form of oil. Oil is a finite resource. There is not a single peer-reviewed, scientifically accepted paper that disputes this fact. Are they aware of this problem? Yes, of course they are. Does it matter to them that civilization as we know it is pretty much screwed when it runs out? No, not particularly. From a strictly business standpoint, it shouldn't. However, let us consider that if anyone has the ability and the resources to find a viable, renewable alternative to oil, research it, develop it, and end our dependence on oil, they do. In collaboration with governments through public-private partnerships, they could probably do it in a decade. Will they? No. In the immediate future, it is more profitable for them to drill more holes, move more oil (and, of course, spill some while they're at it), burn more gas, and make more money. The oil exploration in Alaska that has you soiling your trousers with glee is a short-term solution to a long-term problem that you have chosen, for whatever reason, to ignore. And this is all to say nothing of the fact that the continued use of oil as an energy source, regardless of its finity, poses a serious threat to the environment on several fronts. Exxon has flatly refused to believe that the burning of fossil fuels has any negative effect on the environment or climate change as a whole, despite these theories being accepted by most of the scientific community.
Without a doubt, it makes perfect, undeniable fiscal sense for Exxon to continue along the path they're on. As far as Lee Raymond's concerned, he's in a pretty good position right now. Oil reserves are big enough that shortages probably won't become a major problem until he's long dead. And besides which, the sooner they do, the better: I bet they'll just love being able to charge $100+ per barrel because there just isn't enough. However, they could also take some -- and when I say "some" I mean a decent amount, not a couple million -- of the money they put into drilling holes, spilling oil, and venting particulates, and instead make some real first steps towards alternative fuel. They, along with the rest of the energy industry, have the money, the power, and the resources to migrate the world to something clean, renewable and cheap. There is enough remaining oil in reserves and in the pre-existing explorations to keep us going for the time it would take to get there. Would it be profitable? Not immediately. Would it be easy? Of course not. Would it be necessary? Not yet. But will we not thank ourselves later on for doing it? Would we not hail those heroic revolutionaries who, using their great power and vast influence, daringly ended our dependence on a finite, costly, dangerous and dirty resource? Would it not, all being said and done, be worth it? Yes. Yes, it would.
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There has not been a supply problem, only scared consumers willing to pay more for the price of gas.
But give it a century or so...
Cycle
There has not been a supply problem, only scared consumers willing to pay more for the price of gas.
I dunno about you, but using something up faster than you can produce it pretty much qualifies as a supply problem.
Would you care to qualify your statement with a fact or two?
I was referring to the current price of gas as a result of Katrina and Rita. What were you referring to?
Jimro
