No Profits, No Oil

If a product is in short supply and if you really wanted more to be produced quickly, would you want companies to think that they could earn a lot of money making it?

You would think that the answer is pretty obvious: No profits, no oil. To encourage more production, companies need to think that there are more profits to be made. With all the anger over high oil prices, more production to lower prices would seem to be a high priority.

But outside of most congressional Republicans, particularly those in the Senate who successfully filibustered a new wind-fall profits tax on oil companies, no one wants to admit what profits do.

Unfortunately, both the Democrat and Republican presidential candidates are both attacking oil company profits. Barack Obama promises, "We've got to go after the oil companies and look at their price-gouging. We've got to go after windfall profits." John McCain says, "I am very angry, frankly, at the oil companies. Not only because of the obscene profits they've made, but their failure to invest in alternative energy to help us eliminate our dependence on foreign oil."

Not to be outdone, congressional Democrats are just as upset. New York’s Senator Chuck Schumer claimed: "Oil companies are racking up obscene profits left and right while American families are stretched to the limit by skyrocketing gas prices. It's time for Big Oil to pay its fair share . . . ."

John McCain says, "I am very angry, frankly, at the oil companies. Not only because of the obscene profits they've made, but their failure to invest in alternative energy to help us eliminate our dependence on foreign oil."

McCain, you dweeb, they are OIL companies. While it may be in their best interests to help develop alternate energy sources, there is no mandate. Their expertise is in oil and its derivatives.

Would you expect Orville Redenbacher to invest in fish sticks?

“Higher profits increase production, driving down both prices and profits.”

The way to maximize profits is to keep supplies tight and prices high. Not said so clearly is that this talk about reducing gasoline prices means: reduce the price of crude and reduce the profit to OPEC and all oil producing nations and all oil producing corporations.

Where’s the incentive to produce more and drive down record profits? There are disincentives to increase production all over the place. Just opening up new areas for exploration won’t necessarily reduce energy costs in the future. Producers would have to add enough to the world supply to bring down crude prices.

We won’t see any long term reductions in crude prices unless the US adopts an energy policy that mandates that we explore and find new reserves domestically, and have the capacity to produce ___ million barrels per day, or some percentage of our 21 million barrel (and growing) per day usage.

Some government involvement, but only to the extent of opening areas for exploration, letting the leases, then requiring that the lessee corporations put on line certain amounts of found reserves for production. Gov’t might have to subsidize unused production capacity costs for a time, but we’ll never move toward independence in crude and energy production without some requirement that we build toward an amount of productive capacity.

The market incentives just aren’t there to increase production as much as needed. We’d have to treat this (on line productive capacity) like a standing armed forces, something we need and must maintain whether or not it’s always used.

Alternatives also would play a part, but it’ll be primarily petroleum for a good numbers of years to come.

The market has been manipulated to restrict supply on and off. It’s time to manipulate it by increasing supply from US domestic sources.

“the oil company gets about 8 cents (or so I thought).”

I think that is a bit of disinformation being thrown around and often snapped up by talk show hosts who may or may not understand what they’re passing along.

That 8 cent per gallon profit is only for gasoline at the retail level. It says nothing about what an integrated corporation like Exxon has made on pumping the oil at the well, on transportation, on refining, and all the steps that precede the retail sale.

Exxon just announced that they plan to sell off the retail service stations which they still own. Not enough profit, or return, but they’re sure not getting out of the oil business. They make their money on the price of crude oil, and on the many products other than gasoline.

This 8 cent per gallon at retail talk is just a diversion. That’s not where oil companies make their profits.

Of course, there are small companies all along the route from the oil well to the service station playing a role, but the big, integrated companies are making profit every step of the way until it hits your vehicle’s gas tank.

They are making more than a .25 cents a gallon. There profit Margin is a little over 10%. So if you have a $4 a gallon then you are looking at .40 a gallon profit.so if they sell a typical 12 gallons or so per tank. They make $4.80 per tank full per profit.

Now the government,that have done nothing, get just over 25% (more than one government). So they make about $1 per gallon or $12 per tank. However, the government bitches about profits. Unbelievable...

They are making more than the Oil companies in profit, and at the same time they are complaining about greed. Only a stooge would fall for this BS.

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