Congress gets confused, thinks it's Parliament

Jensenman wrote: Um, it ain't Big Government bitching about oil profits. It's Big Media. Gotta keep the crap stirred up to sell papers (delivered with oil byproducts, BTW). Last quarter, ExxonMobil made 11.7 billion on gross sales of 160 billion, or about 7.3 percent net. If our service department made only 7.3 percent net, a certain well known race team owner would send his minions down to shake us up. But of course Big Media screams '11.7 BILLION DOLLARS PROFIT! CHEATING BASTARDS! TAR AND FEATHER THEM!'

You make a valid point.

However, there is a "segment" of BIg Government that uses Big Media to exploit the public's basic economic ignorance and camouflage the root cause.

Just once, I'd love to see a Big Oil exec testify in front of a Congressional hearing and rip the arseholes who grandstand for the cameras (and their ignorant constituents).

That would make headlines, but Big Media would edit everything to make Big Oil appear even more as the "evil empire" than it already has.

oldsaw wrote:

SVreX wrote:

aeronca65t wrote: On President Bush’s Watch, Big Oil Companies...have used those excessive profits to purchase...stock buybacks rather than making serious and significant investments in clean alternative fuels...

So, part of your point is that we should be upset that oil companies haven't invested in alternatives to oil?

Oil companies certainly invest in alternative energies, but until they are financially viable they won't be introduced into the market unless they are profitable.

Yes, I realize you are right- Oil companies do invest in these things. But the expectation that it is somehow their responsibility to do so is a little weird.

Maybe it's not the oil companes' responsibility to invest in alternative energy sources but it makes good business sense.

Think of it this way: right now they are selling a product which will run out. No oil = no income. No income = company goes poof. So what do you do? Why, you invest in research for the replacement for the product that will run out, thus helping to ensure the long term viability of the company.

Of course, given the usual 'we will only worry about the next quarter's profits' way of doing things, there will probably be very few oil companies which actually make (survive?) the transition.

http://www.eyeblast.tv/Public/Video.aspx?rsrcID=2036

I don't know what scariest, that video, Borat, or this:

http://www.somethingawful.com/d/weekend-web/conservative-psychic-dwarves.php

SVreX wrote:

aeronca65t wrote: On President Bush’s Watch, Big Oil Companies...have used those excessive profits to purchase...stock buybacks rather than making serious and significant investments in clean alternative fuels...

So, part of your point is that we should be upset that oil companies haven't invested in alternatives to oil?

That's great way to reduce a complex issue in to an oversimplified sound-bite.

You should be a politician!

According to the commercials I see on TV, oil companies "say" they are looking to the future and are interested in alternative enegry. Do they mean that or are they just feeding us a bunch of crap?

I cannot mandate that "we should be upset". I am just pointing out what I believe is useful information. Use that information as you wish and vote accordingly.

Here's my point of view: I see record profits from companies that are looking for bigger tax breaks at the the same time. As I see it, that's like me winning the lottery and asking for a tax break simultainiously.

And I see oil companies sitting on unused off-shore oil leases (and also many leases on public lands). Why aren't they using them? The same companies say they are being denied the right to drill off-shore. Come on! What's the truth here?

It is my contention that they are using the present mania related to oil prices to "get more" driliing rights even as they do not use present leases. A ruse based on greed.

And I find it really tiresome that these same companies (and politicians who support them) use the "patriot angle" to say we need more drilling. I could make the same argument that this is a Band-Aid and that (long-term) we are being sucked into more dependency on mostly-foreign oil. To me, any way that continues to hold us hostage to oil any longer than neccessary is bad for America and unpatriotic.

For what it's worth, I think off-shore drilling can be a fair idea if done properly (and using exisiting leases). There's a good argument that it may be environmentally better than the risk of sending supertankers across the Atlantic.

I fully understand that oil companies are a part of our economy. I put $50 in my MGB yesterday. So yes, I am part of the problem too. But I would like to see this country move away from oil dependency. I would be very happy to drive an electric car (or ride mass transit) to work. But as long as we keep our focus on oil, we spend less time on areas of technology that are our real future. You mentioned a number of other parts of the economy (such as Big Pharmaceuticals, Big Banks, Big Financial Services, Big IT, Big Telecom and Big Food). You are right: there is plenty of high-jinks in some of those areas too. But the cost of oil has a disproportionate effect those other "Big" parts of the economy too. When I was in fifth grade, and I did something wrong, I would try to get away with it by telling my folks; "Everyone else is doing it". It didn't work for me and it shouldn't work for Big Oil either.

My view is that the oil profits are "excessive" because they are not be used to sustain America.....only the short term gains of big investors (who are more likely to "really" vote instead of "proxy vote", thus having more influence) . And many of the really big investors in oil these days are foreign (especially Chinese banks). Where do you think their patriotic views lie?

I would rather see "modest profits" instead of "record profits" with a system of turning much of that "excess" into sustainable energy. Do you think those foreign investors feel the same way?

By the way, my preference for energy independence would be nuclear. Build lots of nuclear plants. But with this we'd need real security for these added plants and the waste disposal sites. Lots of military-level security, black helicopters, tanks, whatever it takes. Build in the cost of security to the energy cost. More people would have confidence in nuclear energy if security and safety was not done "on the cheap".

aeronca65t said:And I see oil companies sitting on unused off-shore oil leases (and also many leases on public lands). Why aren't they using them? The same companies say they are being denied the right to drill off-shore. Come on! What's the truth here?

i guess i have to post this in every thread about oil prices and offshore drilling.

• the companies drilling the oil have to be able to get enough oil out of the ground to make it economical to go spend $10 million to see if there is oil down there.

• just because a company has a lease, doesn't mean that a) they have to drill it, and b) that there is oil down there. There is a very good chance that a company has a block, and the data they have shows that they don't have what they need to drill a prospect.

there is a 3-prong test (ask billy3 if you need to know what that is) to see if you have a good chance of finding oil

1) You need a trap. this is usually referred to as "3-way or 4-way closure" traps can be structural(faults/folds), or stratigraphic(low sandy area overlaying a shale gets overlain by silt). even if you have a trap/seal, like a fault, the fault can leak, then you're hosed. there's lots of ways to be hosed.

2) you need a source rock. this is your organic stuff that gets cooked to make hydrocarbons. a corollary to this is that you need enough heat to cook, and also for enough time, so if there was an increase in geothermal gradient too recently, you're hosed, if you had heat, but not long enough, you're hosed. there are lots of ways to be hosed

3) you need a reservoir. i know everyone thinks theres just this big pool of oil down there that we just stick a pipe into and pump it out like when the basement floods. thats not the case, the porosity (space between the grains of sand) and permiability (how well fluids can move through the rock) determine the quality of the reservoir. even when the reservoir looks good, you can have other issues, like swelling clay cements, can clog up your poro/perm. then you're hosed. theres lots of ways to be hosed.

this is just a high-level overview of what you need to find oil. there are lots of other factors, like the cost of getting the oil from wherever you find it(more and more likely to be in the middle of nowhere these days) to the refinery, etc. and the cost of getting the drilling equipment to wherever you're drilling. on the gulf coast of louisiana, they've built canals through the swamps, so they can float drilling rigs in rather than drive them.

aeronca65t:

Record volume of profits is not the same as record percentage profits.

When you hear things in the news about "record oil profits", they mean the companies posted huge gross numbers- volume. They don't take into account that the companies are simply enormous companies.

I do some work for a chemical company. Their profit margin is really huge- the boss was explaining the details of one of his products to me today- they purchase $150 in raw materials, cook it in a reactor for 48 hours, and sell it (to our government) for $7000. THAT's a HUGE markup.

Nobody's ever going to mandate a windfall profit tax on them, and you'll never read about their "record" profits in the paper- small company, does about $4 mil in business per year.

If they had spent $5800 for that $7000 sale, it would have been a 20% return, which is not too shabby. As is, it is more like a 4600% return.

And yet, no one complains.

aeronca65t wrote: Here's my point of view: I see record profits from companies that are looking for bigger tax breaks at the the same time. As I see it, that's like me winning the lottery and asking for a tax break simultainiously.

I really think you need a few economics studies. Corporations don't pay taxes- their stockholders do. If a company is providing a needed service that is necessary to the public at large, isn't it normal and appropriate for the government to offer incentives? Would it be preferable that they offer no incentives for energy infrastructure development that is vital to our country, leaving no private company interested in investing the capital? That would make energy infrastructure development a function of government.

Socialized energy infrastructure development. ugh.

Salanis wrote: Yeah, Obama must not really love this country. He just wants to be president because it's such a cushy, well paying, low stress, gig.

This is the most sane thing that's been said in this thread. Some comments:

1. The House of Commons is hilarious.
2. All politicians (Democrat, Republican, or otherwise) are giant children, and are apt to do some dumb E36 M3, as well as generally waste time and do nothing whilst spending other people's money
3. My energy policy is a 21-part plan: the 21 speeds on my bike. I challenge anyone to come up with a better one.

Today in my local scandal rag there was a business article about Blackbaud. If you don't know who they are, they write software for non profits so they can maximize their return on donations.

Blackbaud proudly announced a 33% increase in net profit, due mostly to raising the cost of their 'maintenance services'. Their net hovers around 22%, according to the article. Compare that to the ExxonMobil 7.2%.

Of course, the actual dollar amount of the 33% profit increase is something like 2 million dollars.

Still, they jacked up their billing to NON PROFITS to achieve this jump in profitability. Meaning they took money away from the recipients of the services these non profits supply. Shouldn't there be a special circle in Hell for Blackbaud? Or is that only reserved for the oil companies?

I'm just askin'.

Jensenman wrote: Today in my local scandal rag there was a business article about Blackbaud. If you don't know who they are, they write software for non profits so they can maximize their return on donations. Blackbaud proudly announced a 33% increase in net profit, due mostly to raising the cost of their 'maintenance services'. Their net hovers around 22%, according to the article. Compare that to the ExxonMobil 7.2%. Of course, the actual dollar amount of the 33% profit increase is something like 2 million dollars. Still, they jacked up their billing to NON PROFITS to achieve this jump in profitability. Meaning they took money away from the recipients of the services these non profits supply. Shouldn't there be a special circle in Hell for Blackbaud? Or is that only reserved for the oil companies? I'm just askin'.

For the uneducated, demagogued masses, it's all about the zeroes in front of the decimal point, not the % symbol after the decimal point.

I really think you need a few economics studies. Corporations don't pay taxes- their stockholders do. If a company is providing a needed service that is necessary to the public at large, isn't it normal and appropriate for the government to offer incentives? Would it be preferable that they offer no incentives for energy infrastructure development that is vital to our country, leaving no private company interested in investing the capital? That would make energy infrastructure development a function of government. Socialized energy infrastructure development. ugh.

Ah-h-h. Actually, that statement is incorrect. Corporations don't pay taxes- their consumers do. Corporations collect the taxes in the the cost of their products and/or services.

SVreX wrote:

aeronca65t wrote: Here's my point of view: I see record profits from companies that are looking for bigger tax breaks at the the same time. As I see it, that's like me winning the lottery and asking for a tax break simultainiously.

I really think you need a few economics studies. Corporations don't pay taxes- their stockholders do.

Corporations pay taxes. What would make you think they don't? Actually, corporate income is taxed twice. Look at a statement of cash flows: it's right at the top. After dividends are paid, the share holders incur their capital gains taxes.

Twin_Cam wrote:

Salanis wrote: Yeah, Obama must not really love this country. He just wants to be president because it's such a cushy, well paying, low stress, gig.

This is the most sane thing that's been said in this thread. Some comments:

I will never accuse a president or presidential candidate of not loving this country. I may not agree with that president/candidate's vision for this country, but you have to love this country and believe in it in order to want to take such a crap job.

confuZion3 wrote: Corporations pay taxes. What would make you think they don't? Actually, corporate income is taxed twice. Look at a statement of cash flows: it's right at the top. After dividends are paid, the share holders incur their capital gains taxes.

It is true that corporations right the check, but that money comes from somewhere, and it's the consumer. All taxes are paid by consumers, it's just that different people do the collecting. The IRS collects part of my tax. The SS administration collects part of my tax. ExxonMobile collects part of my tax.

Strizzo wrote:

aeronca65t said:And I see oil companies sitting on unused off-shore oil leases (and also many leases on public lands). Why aren't they using them? The same companies say they are being denied the right to drill off-shore. Come on! What's the truth here?

i guess i have to post this in every thread about oil prices and offshore drilling.................. ........this is just a high-level overview of what you need to find oil.

Thank you. That's all good info.

But I don't know that it relates to my question:

Why do they need More leases if they already have lots of unused leases in the majority of likely areas?

I'm not trying to be facetious....do you understand my point?

me said:just because a company has a lease, doesn't mean that a) they have to drill it, and b) that there is oil down there. There is a very good chance that a company has a block, and the data they have shows that they don't have what they need to drill a prospect.

perhaps you skimmed over this part.

like i said in another thread, the fact that there is "technically recoverable" oil there doesn't mean that it is "economically recoverable". a company isn't going to waste money because thats not what they're in business for. don't you think the oil companies would be drilling the hell out of it if they could make a profit on it?

Like Strizzo said, a lot of those leases aren't really worth much.

If, for example, there is a 92% chance that there is easily recoverable oil in a new area that you don't have a lease for, but you are sitting on leases that have a 17% chance of sitting on oil and they are difficult to access, wouldn't you like a few new leases too?