Windfall Profits?
Kudos to Jim Romick of Eureka for pointing out something that should be pointed out more often. I've gotten a little tired of hearing about the oil company's supposed windfall profits. They certainly have made a lot of money, but they're still getting the same profit margin they always have which is considerably less than some other industries make.
As an aside, I was as surprised as Leonidas when I saw this graph showing the amount of oil controlled by the various oil companies. The size of U.S. oil companies pales in comparison with those of some other countries.
Such things make me shake my head when I hear Congressman Mike Thompson, and others, saying they need to "Crack down on unregulated oil speculation" as he does in his My Word column in yesterday's Times- Standard. How are we supposed to do that?
It seems to me to be more than a bit arrogant to suggest the United States can crack down on anything in regards to oil when the market for oil is global and we're not even the biggest consumers of the stuff anymore. About the only thing we as Americans can do about oil prices is try and use less of it and drill for more of it.
posted by Fred Mangels @ 12:37 PM
15 comments
15 Comments:
Good point Fred. The number I've heard is that the big five US oil companies control about 5% of the market. That doesn't give them much leverage to exert control over the other 95% and if you remove any kind of profit incentive for them to produce more oil, we become even more dependent on the foreign 95%.
That's why they call it a cartel.
If you got all the marbles, you make the rules.
Mike was absolutely right, but of course, no one around here would ever admit that.
TWO things CAN decide what we pay at the pump- (for OUR oil- not the stuff we import);
1.
The 'oil speculators' as Thompson said.
The other is...drum roll...
2.
The White House!
See, when bushie makes deals with Mexico behind closed doors- it isnt so Americans pay less for oil. Its so his 'pals' pay less, get primo oil leases in Mexico, and everybody is happy!
(At least, everyone who is a rich white guy with millions in stock options, that is)
1:07 PM: "...get primo oil leases in Mexico, and everybody is happy!"
Please name any US individual or company with lease holdings in Mexico.
FYI, ALL foreign extractive industries in Mexico were nationalized in 1937. Since that time the ONLY oil company in that nation is Petróleos de Mexico (PEMEX) a monopoly of the Mexican government. They are the only producer, refiner, exporter and distributor of petroleum products. Due to the socialization and lack of investment in new exploration coupled with the corruption and nepotism in the government and the oil workers union the result has been a steady decline in production. Venezuela is beginning to experience the same decline since Chávez fired all of the oil technicians of Petroleos de Venezuela S.A. (PDVSA) and replaced them with reliable chavistas who don't know the difference between a drill collar and a shit bucket.
Please do not assume all readers of Fred's blog are as ignorant and partisan as you are.
Thompson hit a solid double in his article. He missed some very important componets like peers,etc finding a loop hole to buy oil futures. It would blow your mind if you knew how many $$$$$$ America's teachers unions have spent in this speculation. Good insight from Fred----you're the man!
Chavez is doing quite well, even if Zorba the Greek wishes otherwise.
Oil is a competitive business. The prices have gone up due to demand. How does Mike Thompson propose to stop speculation on a legal commodity? The gas-guzzling public is demanding action from Washington, and since the Congress cannot control the market, they make meaningless gestures.
"About the only thing we as Americans can do about oil prices is try and use less of it and drill for more of it."
Fred,
Americans dont have a national oil company. How can "we" drill for more oil? Are you suggesting that we form a national oil company or are you suggesting that we FORCE existing private oil companies to drill more? thats not a libertarian position in the least.
Oil companies own the oil rights to MILLIONS and MILLIONS of acres of oil fields in the USA right now that they are not using. Giving them rights in ANWAR or other national parks wont force them to drill, it will only give them the option.
When i hear, over and over, how "we" need to drill, all i can think is how fast socialism can take root.
Not sure where you're coming from, 5:06.
Sure, if they have all kinds of land they can drill on, maybe they should. But maybe they aren't because they don't think it would be productive?
ANWR and the West Coast are supposedly known to have potential, but they're off limits.
Like the proverbial broken clock, CPR is occasionally right. Hugo is doing quite well living the good life in the Miraflores Palace in Caracas as is his hero Robert Mugabe in Zimbabwe. It is quite another matter for ordinary Venezuelans. Some reading HERE, HERE and HERE may be instructive for open minds but is unlikely to penetrate the impermeable "progressive" mindset of CPR, Danny Glover, Oliver Stone, Michael Moore or Sean Penn.
5:06 PM "Oil companies own the oil rights to MILLIONS and MILLIONS of acres of oil fields in the USA right now that they are not using."
You have digested the DNC talking points perfectly. They have leases on "millions of acres" that have no oil. The leases expire after 10 years without drilling. The places where oil is KNOWN to exist are OFF LIMITS.
fred,
oil companies will not drill for oil if it costs more than $16 a barrel to extract. that has been the industry stadard for years. the reason that oil companies havent drilled for oil in certain places is because it has not been profitable. with higher prices, oil companies worldwide are already planning drilling to start drilling in harder to reach areas.
when i hear that "we" need to drill for oil, all i hear is socialism. "WE" dont have a national oil company. "WE" are a capitalist country.
While Zorba fixes his links, he might want to ponder the last election in which Chavez lost his bid to extend term limits.
I hope that Zorba thinks of Hugo Chavez lovingly every time he fills his gas tank.
Sorry about the links CPR but the main one on the food lines works. Try THIS and THIS. Meanwhile next time you are forced to haul groceries on your bike, hug a critical mass greenie:o)
" ΛΕΟΝΙΔΑΣ said...
1:07 PM: "...get primo oil leases in Mexico, and everybody is happy!"
Please name any US individual or company with lease holdings in Mexico.
FYI, ALL foreign extractive industries in Mexico were nationalized in 1937. Since that time the ONLY oil company in that nation is Petróleos de Mexico (PEMEX) a monopoly of the Mexican government. They are the only producer, refiner, exporter and distributor of petroleum products. Due to the socialization and lack of investment in new exploration coupled with the corruption and nepotism in the government and the oil workers union the result has been a steady decline in production. Venezuela is beginning to experience the same decline since Chávez fired all of the oil technicians of Petroleos de Venezuela S.A. (PDVSA) and replaced them with reliable chavistas who don't know the difference between a drill collar and a shit bucket.
Please do not assume all readers of Fred's blog are as ignorant and partisan as you are."
As usual - your superior intellect dooms you-
And, as always, its sooo nice to be called 'ignorant' by the likes of you!
Of course mexicos oil has been nationalized for decades!- and Im sure you also believe that between NAFTA and Texas, no 'investments' have been made by certain 'gringos'? C'mon!
When in trouble, When in doubt,
Roll your eyes and jump about.
If the price of gas should climb,
Maybe it will fall, in time.
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