ExxonMobil earns Record $10 Billion Profit in Quarter

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The President and Congress (The Government) may not be responsible for the high prices, but the Government is responsible to look into it when there is the possibility that many companies acting together or one company are artificially inflating prices to increase profits. There are laws in the US governing that type of activity. But the people that look into those types of things must have the desire to do it. I don't see anyone in Washington that looks even mildly interested.



Think about it?



Who are the biggest buyers of oil futures? Big oil companies. Who has the most traders on the commodities markets? Big oil. Who supplies the most oil/gasoline to the commodities market or is involved in supplying the oil/gasoline? Big oil. Who is in the best position to manipulate oil/gasoline prices on the so-called free market? Big oil.



Who is making money on BOTH ends of the deal? Big oil.



Who isn't even mildly interested in looking to see if there is anything fishy going on with oil/gasoline prices? The US Government (Congress and President both.) Who gave those very same companies huge tax incentives during a period when those companies were making record profits? The US Government. Who got huge donations to their election campaigns from those companies that are making record profit AND getting huge tax breaks? The elected members of the US Government.



If it looks like a skunk, walks like a skunk, sounds like a skunk and smells like a skunk it's probably a skunk. At the very least you should check to make sure and not just assume it's a black cat that got sprayed by a skunk after walking under a highway striping machine.

 
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There are two groups to blame for the price of gas --



1. OPEC -- they are the reason that oil and gas are NOT traded in a free market. They are a cartel. All the free market and economic rules are thrown out the window.



2. Environmentalist Hippies -- who have not allowed a new refinery to be built in the US in nearly 20 years. The supply of oil is not the problem, it is turning it from crude into gas that is the bottleneck.
 
Wake up - refineries need to run at 90%+ capacity to maximize profits. Companies are interested in making the most profit. Under normal condicitons the current refineries are capable of producing more gasoline than we currently need. Building more refineries will reduce efficiency, lowering profit. No company builds capacity for emergencies. They plan for the normal, not the abnormal.



There is no incentive to build more refineries.



If the oil companies wanted to build more refineries over the last 20 years, they could have easily done so right over the border in Mexico where environmental laws are almost non-existent. Why haven't they? They didn't see any profit in it. If they had, those refineries would be up and running right now.



No company will build more manufacturing capacity until the demand exceeds the current capacity by enough that the new capacity won't cause a glut of product, reduced profits and inefficient manufacturing overcapacity.



Blaming "environmentalist hippies" is and always has been an easy cop-out answer for something that would not have been done anyway.

 
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Rocco,



I completely disagree. There is plenty of demand to fill additional refineries. The high demand is exactly the reason the price is up. Do you really think if there were extra refineries that gas would sit unsold? And the oil companies would love to add capacity because they can sell more volume. Demand is not going down anytime soon -- in fact it is continuing to rise. Those companies want to be at the leading edge of demand so they can get a jump on competition -- not lagging behind.



Also, the Mexico arguement for the most part doesn't make sense. I live in Michigan, the cost of transporting the gasoline from Mexico to here would increase the price dramitically, making the refinery in Mexico useless to me. Fuel in Michigan comes from refineries in Illinois and the surrounding state. The same is true in other parts of the countries. And it does no good to build in Canada, as their environmental laws are at least as restrictive than ours, if not more so.
 
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MTU: gasoline can be transported over pipeline... that is relatively cheap to move around compared to trains or tanker trucks.
 
MTU



There has not been a gasoline shortage. Nor has the supply been too close to the demand. The supply has consistently exceeded the demand. Chinese demand (another reason I've seen floated) has caused the price of crude to rise some, but not as much as people would like us to believe.



The main driving force on increased oil (and lately, gasoline) prices is speculation on the commodities market. That speculation is driven somewhat by expected demand, but it also involves a lot of greed (people looking for a quick buck), some manipulation, and a large dose of FUD (Fear, Uncertainty, Doubt).



And I know of no large companies that will increase manufacturing capacity until they are sure the demand will be there once the manufacturing facility is ready to produce, or until the demand already exists. It may have been they would plan ahead at one time, but there are a lot of things in business that have changed over the last 35 years - and this is just one of them. Companies look to the next quarter, not to the next 5 years.



Think about this: at one time, gas stations didn't raise prices until they got a delivery. Now they do it to meet expected costs six months down the road - hence two and three price increases in a single day in response to what is happening to gasoline futures.



The old paradigms have been and are being replaced by newer ones. And the newer ones do not allow for "uneeded expenditures" - ie: anything that doesn't result in "instantaneous" profit. In most ways, big business has become reactive rather than proactive. This, IMO, is not a good thing. (The small outfits are still proactive, but in oil they are getting fewer and fewer every year.)



And, Buck, I am all for capitalism, but I am realistic and understand there are greedy, dishonest people that will not engage in capitalism, but in exploitation. (Enron anyone?) This is what I think the Government should be looking into. They may find nothing, which would be fine, but they should at least take a look.



Beady-eyed, uncaring, greedy capitalists (i.e. conservatives)... Gotta love them.



Not!

:D
 
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Re: pipelines -- Environmentalists have the same issues with pipelines as they do refineries. Plus, pipelines work great for transporting crude from the port to the refinery, but refineries are sending gasoline to many different places (closer to point of sale). Pipelines won't work well for that. I am all for trying to limit damage to the environment, but that has to be balanced with economic well-being.



Re: Rocco's Discussions on business shifts -- This I will agree with you on -- Big business is way too reactionary. This is why the Japanese automakers are kicking the snot out of the domestic ones. I do disagree with you about the supply and demand for fuel -- especially since I have seen gas stations in the last week that were out of fuel.



As for gas stations changing their price several times a day -- that's a completely different topic. I think there are many different arguements that can be made about that -- both capitalist and explotive.



By the way, I consider "capitalist" a compliment, so thanks. Just don't call me a Republican or a Democrat -- I have problems with each party.
 
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Gas stations were running out of fuel in GA due to a broken pipeline limiting the fuel supply - not a refinery problem, mind you.



Elsewhere stations ran out of fuel because people would fill up when they didn't need to - over-reaction by consumers very similar to what happened during the oil embargo in 1972-73. There were unusual demands on the distribution system, even though there was plenty of supply they couldn't deliver it fast enough. Not the same as a supply shortage, but the same end result. But in this case, unlike '72-73, the effect was limited to a few areas and not widespread. And quickly rectified with the next delivery truck.





 
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Nelson - no offer to sell or give me KY first...LOL



What did Cheney get for leaving Halliburton as their CEO... 31M! So, that he could run for VP. Hmmm...do you think he has some loyalty to the industry?





 
As a vice-president, Cheney has no ability to pass any laws. He may have influence over others, but on his own he can not enact any changes or create policies.



Also, regarding Halliburton -- I have dealt with their main subsidiary (Brown and Root/Vinnell, Brown and Root). The company provides logistical support for overseas locations. In many cases, they are one of few companies that will even consider providing these services in very hazardous locations. Starting wages for US citizens are in the six figures ($100,000+) for even blue-collar jobs, because the work environment is so hazardous. Considering the wages they must pay to get workers, the price of their services would seem reasonable.



What isn't reasonable is the situation that caused us to get into this situation in the first place. The services that Halliburton provides used to be provided by active duty military personnel. A previous administration decided that it is cheaper to contract those military duties to the private sector. Therefore, we are now paying a contractor ($100,000) to drive a fuel truck in Iraq, when we could have a Private driving the same truck for $25,000. Further, if things get too hot, the contractor can just pack up his bags and quit. This has already happened, and so now the Army is grabbing qualified drivers from the Air Force to move their fuel.
 
I bet when all settles down around the nation, price of gas will drop drastically. We may even see .96 a gal at some point before we are slammed again.



it happened after the 70's Trucker strike and it also happened in the mid 80's in the early 90's.



It's almost like the oil companies gives us one week of great prices every 10 yrs.



Like they are saying "Um, ..here.. here is a a bonus for um...raking ya over the coals, um sorry, but..it's not going to last long "



:)



 
Nelson said:



The services that Halliburton provides used to be provided by active duty military personnel. A previous administration decided that it is cheaper to contract those military duties to the private sector.
Click to expand...



It wasn't necessarily "a previous administration" - it's the new way of thinking in the entire government (and private business as well) that says it's cheaper to outsource things (read my "Hertz sold" posts) or "the private sector can do things more efficiently (cheaper) than a government agency" ideas that are now prevalent (and where did that originate, I wonder..?) that caused this situation. Besides, a lot of this is driven by Congress not the President. (In who's district is Haliburton's head offices located, I wonder?)



IMO, there are some "government" things that should be done by the private sector, some that should be outsourced and some that should be handled internally (in the case Nelson provided, the government.) The trick is figuring out which is which and acting accordingly. And that is something I don't think any President or Congress in the last 50 years has been capable of doing at even a 20% success rate. In fact, when they do get it right I believe it is a total accident! Politics and money skew things so badly it is almost invariably the wrong decision.



:D



GM,

We will never see sub $1.50 gas prices again. Right now we are already conditioned to think anything under $2 is a great price! I bet the lowest it ever goes again is around $1.80.



 
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