Big Oil Profit and Big Government Gouging

There is a lot in the news and blogs today surrounding the 8.5 Billion 3 month profit at Exxon just announced. Here are a few sources:


LA Sunsett at Political Yen/Yang showcases a writeup from Neal Boortz' Neal's Nuze about the oil profit broo-haha. Two snippets show some important points: 1) The government take of 50 cents per gallon is a lot more than the 12 cents per gallon earned by the gasoline retailers. And the gas retailers provide a steady gasoline supply and employment opportunities 2) The profit per dollar of revenue from the gas companies is less than pharmeceuticals and banks while on par with household goods and cosmetics companies.

According to this Gas Buddy Gas Price Map some Americans pay a lot more for gas than other Americans. California is paying almost $1 more per gallon than Wyoming, Montana, Utah and Idaho. Do you think that says something about why gas prices are so high? California has the most stringent requirements on the gas blends for environmental impact. Hmmm.

You can see in this FoxNews Story that Neil Cavuto makes my Illinois Senator Dick Durbin look like a fool. It has the whole interview where Cavuto hammers home that big oil companies make 9 cents of profit per gallon of gas compared to the already mentioned 50 cents per gallon government take. Durbin wants to focus on the 9 cents, but only in terms of the 8.5 billion in profit that he interestingly rounds off to 10 billion. This cavelier "what's 1.5 billion" attitude is what gets this country into financial trouble.

Mike's America Blog also discusses the Big Oil / Government profits and includes a nice graph. This graph shows his point: "Oil Profits Go Up and Down, Gas Taxes Only GO UP!"

The Mimmem Blog gives a nice summary about supply and demand, corporations and profit, and a nice challenge to walk the short hops instead of burning fuel.

The Powering Down Blog has some great links on the subject and discusses how since oil spiked, US oil imports went down by 15% (since 02/10/06). There is also a good section debunking the notion that big oil companies are getting together and setting prices. A 9-0 Supreme Court decisions adds some good support.

Finally, the Oil Drum has a very interesting article explaining why big oil is making a lot of money right now and why that is not obscene. It starts out examining the path of oil from the ground to your gas tank: "Oil companies sell to refiners. Refiners sell to distributors. Distributors sell to retailers." and how "At every level of these distribution chains, people are trying to buy low and sell high." There is an excellent section of why it would not help if "Exxon Mobil wanted to make a gesture of good faith. Could they sell the crude for cheaper in hopes of lower prices at the pump". Grab some coffee or a soda and camp out on this for awhile. It is a great read.

So, the summary of this is that Democrats are taking advantage of public ignorance to denounce $8.5 Billion in profit while hiding the $17 Billion the government takes. The Democrats also try to sweep under the rug their culpability in keeping us from tapping into more oil sources and preventing more oil refineries from being built. Nobody likes paying these gas prices, but the cheap political points trying to be scored when their fingerprints are all over the limited fuel supply requires an educated look. Hopefully these links and commentary add to that needed education.