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pmh1nic Pioneer100© Member 
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In my opinion the media has really blown this way out of proportion. The oil company net profits are running about 6% to 10%. In simple terms for every gallon of gas that is purchased for $4.50 about 27 ~ 45 cents is oil company profit. While this 27 ~ 45 cents has some drain on the economy it isn't the overriding factor. This profit is really not that significant when you're discussing the impact that the increase gasoline prices have had on our economy. If you cut the profit to 3% to 6% (getting rid of the so-called "windfall") and the price was reduced from $4.50 to 4.275 how much of an impact would that really have on helping the economic situation of the average American or the economic situation in the country as a whole? Probably not very much. In addition, where do these profits go? Are they stashed away in the mattresses of oil executives? No, they are reinvested into economies somewhere. I'd also guess that if you have a 401K or some other investment plan a portion is invested in energy stocks. The politicians that are making oil company profits the the focal point are doing nothing more then deflecting the blame from where it rightly belongs, in Washington and at the doorstep of consumers. The politicians have done next to nothing in increasing domestic oil supply and consumers have done next to nothing in shifting our focus from oil to other forms of energy. Businesses will follow where the demand leads them. Consumers create demand. Instead of our government opening the way to develop increased capacity (like we demand from the Saudi's) the government puts up roadblocks. Oil company profits (what a business is in business to generate) are NOT the major issue but rather government and consumers. In fact the government is a product of the "consumer" so ultimately the blame is with us.
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newbiecollector Pioneer100© Member  You can't fake real
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In my opinion the media has really blown this way out of proportion. The oil company net profits are running about 6% to 10%. In simple terms for every gallon of gas that is purchased for $4.50 about 27 ~ 45 cents is oil company profit. While this 27 ~ 45 cents has some drain on the economy it isn't the overriding factor. This profit is really not that significant when you're discussing the impact that the increase gasoline prices have had on our economy. Well said. I work in this business and have for over 35 years. The cost of exploration, drilling and production has gone crazy the last 3-5 years. Some areas have more than tripled. Personally I have no problem with ANY company that has share holders in the public trying to maintain a 8-10% profit. Just one more thing, in many parts of the world gasoline is MUCH higher than in the USA and has been for many many years. It is so because of taxes and "they" can tax it...............cost of gas here is over 87% tax. ....rant over
 Enjoy the pleasure of life Wayne |
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Erinna1112 Original500© Member  Witty clever title pending
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Oil companies are businesses. Businesses exist for one purpose - to make money. IMO, the government stepping in and inhibiting that is bad for the market as a whole, not just the oil markets. It sets a terrible precedent and removes incentive for doing well.
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24HourNut Administrator  Body pillows rock!
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That's a nice part of what makes all the tax subsidies our politicians have been giving to the oil industry so corrupt.
The best human beings start good new topics and vote on the better posts. |
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newbiecollector Pioneer100© Member You can't fake real
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Sorry Frank but I think may have missed the mark a bit there. My thought only of course
Enjoy the pleasure of life Wayne |
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pmh1nic Pioneer100© Member
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24hournut The tax subsidies are miniscule with respect to the dollars involved in the industry as a whole (production, exploration, refining, distribution, etc., etc.) AND are meaningless with respect to the issue of the economic impact of increased gasoline prices. You could get rid of the subsidies tomorrow and the impact would be zilch for the average consumer.
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newbiecollector Pioneer100© Member You can't fake real
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Well I hear you pmh and agree in a way. But I have NO reason to think a comodity -gas- that is used so much and so necessary to so many, can not but help create a serious problem for many when prices jump so high so fast. sorry for the long sentence.......
Enjoy the pleasure of life Wayne |
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pmh1nic Pioneer100© Member
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newbiecollector I'm not questioning that increasing prices are having an impact or that the impact of increasing oil prices effects not only what we pay at the pump but just about every area of life. My point is that the oil companies profit with respect to the all of the factors that contribute to setting the price is really not the most signficant factor and if you cut that profit in half it wouldn't have a dramatic impact with respect to the economy in general.
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wallstreetman Original500© Member Patriot
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pmh1nic wrote: In fact the government is a product of the "consumer" so ultimately the blame is with us. So keep business out of govt! The blame is not with all of us! Vote Democrat!
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sirlamre Pioneer100© Member Official Forum Troublemaker
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"consumers have done next to nothing in shifting our focus from oil to other forms of energy" So PMH, how do we consumer create "demand" for something that doesn't exist? I don't recall having "demanded" the creation of the MP3 player. I didn't go to Sony, et al, and say "I'm going to REFUSE to buy any more CD players, starting NOW! I want an electronic version of the CD player that I can upload songs to from my computer, and I want to be able to download those songs from the Internet." Consumers gain interest in something AFTER it is created and made available at reasonable prices. Everyday Joe Citizen wasn't buying CD players by the hundreds of thousands when they cost $2100 -- only a handful of audiophiles, representing perhaps .05% of the market were. Most consumers were sticking with their $100 cassette decks, and not even considering going out and getting a piece of equipment 100 times more expensive with almost NO media available for it. So - here's the process
That company, Sony, decided that they would make a few test products to see if it worked out as a format. Sony then took that product to industry trade shows around the world, and tried to convince STORES, not consumers, that it would sell. Sony said they'd help MARKET the product with millions and millions invested in advertising. Sony said they'd work very hard at ensuring that record mastering houses would start producing albums on CD, as well as on vinyl. Again, this was NOT a "consumer driven" decision -- because consumers were NOT buying or demanding a product that if it was available, was HUGELY expensive and limited in what it could do. Decades later of course, after MANY companies got involved and THEY took some VERY risky FIRST steps, WITHOUT the consumer demanding the product as yet, we got to the point where consumers WERE actually demanding CDs. It's the same thing with different energy sources--- WHY should Joe Consumer go and pay $39,000 for an electric car, which can only be used in certain places, no one can fix it except the factory, he has to re-fit his house with an expensive charging arrangement? When a gas car is only $18,000, he doesn't have to do anything to get it fixed except drive down to the corner garage, or fix it himself, when there are five gas stations within 1/4 mile of his house. THAT is the problem that we need the oil companies and Detroit to fix -- the SAME way that Sony and the other companies did it-- We need Exxon, Ford, GM, BP and everyone else to PULL THEIR HEADS OUT of the sand, and spend MAJOR percentages of their profits (not just token amounts) on converting to new technologies NOW. The Japanese weren't afraid to do this (almost the entire recording industry is Japanese-product driven) They jumped out there and DID the mass conversion FIRST, merely HOPING that consumers would follow along. They didn't say "But the consumers are only demanding cassette tapes, and we need for them to demand some new product, and then we'll talk about maybe doing that" That's what's missing from this picture--- the spirit of risk and entreprenurship that led Sony into that CD market--- Exxon and BP and Detroit all want to make PROFIT first, middle, and last, and ANYTHING that might harm PROFITS is nowadays facing far more of a struggle uphill than 25 years ago. I think the REAL problem is that the companies have become SO profit oriented that the beancounters and Board members do NOT want to take ANY risks- And so the consumers are not left with REAL viable choices! Sure, there ARE hybrids out there, and there are some other options--- but they are HUGELY expensive as compared to similar vehicles. A hybrid generally costs around 25-40% MORE than a vehicle of the same size and features. That's a LOT of extra cost to expect Joe Consumer to just 'handle' on behalf of the companies. Sony brought the cost of a CD player down to within 5%-10% of the cost of a mid-range cassette deck, and also had helped ensure that thousands of CDs were available, and only THEN they were ready to mass market the thing and seriously expected consumers to pick up for them. Detroit sees no problem with asking us to pay $5000-$8000 MORE for a car that is NOT something your average Joe Mechanic can fix --- thus forcing us back into the waiting arms of the dealer and their higher repair rates. I know we'll get there--- but I do NOT feel that American companies are showing the same degree of willingness to take on product risk/ financial risk as did the technology companies in the 70s-90s. They are asking Joe Consumer to shoulder a MUCH greater portion of the costs, risks, etc --- than ever before in history. And at the same time, people like PMH gleefully say "Companies don't owe us anything for our support, we should horsewhip OURSELVES for every single thing that is wrong with the economy"
Turn thou unto God and say: O my Sovereign Lord! I am but a vassal of Thine, and Thou art, in truth, the King of kings. I have lifted my suppliant hands unto the heaven of Thy grace and Thy bounties. |
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24HourNut Administrator Body pillows rock!
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pmh1nic wrote: 24hournut I didn't make any claim about the financial size of the subsidies. I spoke about corruption. I said: That's a nice part of what makes all the tax subsidies our politicians have been giving to the oil industry so corrupt. I suspect that your reflex to excuse and minimize corruption in the current Administration, or perhaps both Major Parties, sort of made you over-reach and see something I didn't say. Regardless of how big the numbers are, it serves as a fine example of the things to be found when scouring our Government for wholesale corruption. Corporations have a stranglehold on our politicians on various levels, and tax subsidies to oil companies is just one more type of thing worth mentioning when looking through the finds in your net.
The best human beings start good new topics and vote on the better posts. |
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pmh1nic Pioneer100© Member
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Sirlamre "So PMH, how do we consumer create "demand" for something that doesn't exist?" By exercising their purchasing power in ways that motivate manufacturers to change they way they do things. "I don't recall having "demanded" the creation of the MP3 player....Consumers gain interest in something AFTER it is created and made available at reasonable prices." Maybe not you but there were others that purchased the next smaller, lighter, higher capacity players giving the audio developers the idea that if they wanted to enjoy a share of the market they need to innovate. "A business decided they wanted to make a product they thought might sell..." What gives them a hint that something might sell? It is usually demand for a similar product and the business tries to figure out a way to provide that product less expensively or with better features or both. "They didn't say "But the consumers are only demanding cassette tapes, and we need for them to demand some new product, and then we'll talk about maybe doing that" You're looking at this all wrong. Consumers weren't demanding cassette tapes, they were demanding a better way to record music that was cost effective. "WHY should Joe Consumer go and pay $39,000 for an electric car, which can only be used in certain places, no one can fix it except the factory, he has to re-fit his house with an expensive charging arrangement?" Again, the issue is developing a product that will be more economical and efficient at a competitive price. While gas was relatively inexpensive consumers weren't demanding alternatives to gasoline and the automakers had no incentive to produce alternatives to gasoline powered cars. The main point of this thread is that the increase in the cost of gas isn't primarily oil company profits.
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pmh1nic Pioneer100© Member
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24hournut "I suspect that your reflex to excuse and minimize corruption in the current Administration, or perhaps both Major Parties, sort of made you over-reach and see something I didn't say." Again, my main point in the thread is oil company profits. My so-called reflex to excuse the Administration is not excusing but focus on the major problem in all this, consumer demand. This Administration doesn't have the power to do very much about energy policy without Congress. Both the President and members of Congress are elected by the people (consumers). If consumer demand for smaller, light more efficient cars continued to grow the auto manufacturers would have focused on smaller, lighter more efficient cars. "Regardless of how big the numbers are..." It's not "regardless" of our big the numbers are but the idea that we need to focus on the major contributing factors for the rise in gas prices VERSUS focusing on oil company profits. If 75% of Americans called their Congress person tomorrow and told them I don't care about the minimal chance that the mating habits of caribou in ANWAR will be upset if we start drilling, I want you to authorize drill tomorrow, something would happen. If consumers stopped buying SUV's this month the car companies would immediate push forward new designs that were more economical. We, the American population, bear the major blame for the energy situation in this country.
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24HourNut Administrator Body pillows rock!
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Pmh, yes, it is ultimately our responsibility but do know that even the finest responsible people successfully managing a lot of responsibility can be derailed and poisoned by corruption at the Government level. In other words, at some point, there can be a situation where Government is so corrupt and being choked by corporations, it puts the People in a much more difficult place. It's practically a conspiracy - you can't become a candidate unless you play the game and part of the game nowadays is corrupt money, on all levels, due to corporate influence .. ranging from health-care to our energy needs. In addition, our demands or use for oil as consumers would not be an issue if we had actually built new refineries over the years. We would be in better shape if our leaders worked for serious energy reform instead of padding the ass of oil companies. Both major parties are being strangled, don't you see. No one is really willing to do anything radical or against major corporate USA interests because it is hard to be politically viable if you aren't. Ralph Nader is right. So while we are responsible for the energy we consume, something so basic and fundamental to our economy and way of life should not have to suffer attacks of corruption from our own Government. Our own Government, interwoven throughout who knows how many agencies, has worked to not make our energy policy progressive in decades. Some responsibility falls upon the shoulders of those who are hired and elected to protect American interests and stability. Sitting back and watching us get more dependent upon foreign energy and terror oil, especially post 9/11, is obscene. Sure the average American could use a lot more education and participate in voting more - I know we are too complacent and a vigilant guard of freedom includes staying on top of our politicians. That being said, we are also the victims of sabotage and corruption, due to the stranglehold BOTH major parties are hiding and playing along with.
The best human beings start good new topics and vote on the better posts. |
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pmh1nic Pioneer100© Member
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"but do know that even the finest responsible people successfully managing a lot of responsibility can be derailed and poisoned by corruption at the Government level." There are corrupt individuals and systemic problems the feed that corruption. This is one of the reasons that I believe we need a tremendous downsizing of government to take as much money out of the hands of government as possible. Unfortunately the Democrats want to take us in just the opposite direction AND unfortunately the Republicans in recent history haven't done much better. "Both major parties are being strangled, don't you see." Yes I do see. Unfortunately practical options we have going forward are bad (Republicans) and really, really bad (Democrats). Again, if 75% of Americans made the decision tomorrow to vote for smaller government we might see some really change. But the idea that more government is the answer to our problems is being aggressively promoted and accepted by many Americans, and the blame the oil companies profits is used as camouflage.
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