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Obscene Profits!?


What's obscene is the Left's colossal ignorance of the principles of Supply & Demand. What's obscene is for the Left to accuse "Big Oil" of profiteering when Big Government gets a bigger piece of the pie than the companies that explore, research, drill, refine, and pay wages for hundreds of thousands of employees who make gasoline possible. What is obscene is Congress' inability to recognize that THEY are the reason gasoline is nearing $4 a gallon. All because they refuse to allow American oil companies to tap our own very rich American sources of oil and gas....




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15 Comments:

  1. Dan Trabue said...
    But, Eric, aren't the Laws of Supply and Demand the explanation for the increase in price? There is limited supply and increasing demand, therefore, the price goes up?

    Our gas taxes only go to partially pay for the roads that our motorists use, so we can't very well blame the "high" gas prices on taxes. If we didn't pay taxes, then motorists would be receiving even more welfare from the country than they are now (gas taxes come no where near paying for all our roads).

    I agree with you that the profits being gleaned by the oil companies (which also receive welfare assistance from the state) are not the main reason for the high prices. The main reason is, as you stated, Supply and Demand.

    If anything, our leaders are keeping the prices artificially low, don't you think?
    Eric said...
    No one's blaming gas taxes for high gas prices. And the supply is only limited by our refusal to drill the reserves we have, which are in the hundreds of billions of barrels of oil and trillions of cubic feet of natural gas....

    ....but we're not allowed to drill it.

    Congress wants to know why prices are so high? They need only look in the mirror. And yes, perhaps our leaders do keep prices artificially low, but it's obvious they don't realize it, let alone understand it. The very fact that they're blaming the wrong people; threatening to take away profits, as well as a government take over of the oil industry (thank you Maxine Waters-- in her own words,"socialize"), only underscores their colossal ignorance.
    Dan Trabue said...
    Hundreds of billions? I'd need a source. Estimates I've read for ANWR come closer to 10 billion total.

    We go through that much in a few months, globally.

    Oil is a finite resource and the easily accessed oil has reached its peak. IF we drilled in ANWR, that would be a drop in the oil bucket in terms of reducing our independence on oil in any significant way and would only postpone the inevitable by a few years and a few pennies.

    The Motley Fool Economist dude has an interesting review of drilling in ANWR and peak oil in general, if you're interested. It's written strictly from an economist/fiscally responsible point of view, not an environmental one, but it's interesting nonetheless.
    Dan Trabue said...
    US News report says drilling in ANWR could only be expected to drop the price of oil temporarily by .40-1.40/barrel (reducing that $135/barrel price right down to $134/barrel).
    Marshal Art said...
    I just heard today that Brazil has discoverd a deep sea source that could constitute the 3rd biggest reserve. The idea that the easy to get stuff is accounted for isn't off base, but technology makes the harder to get stuff easier than it used to be. And of course, just because we are restricted from off shore drilling and exploration, doesn't do a thing to restrict other countries,
    such as China, do go and drill wherever they want. In the meantime, we keep paying higher prices.

    But Eric's point is on the money. Congress needs to consider their own part in the current situation and stop slamming an industry that is having a period of reaping the rewards of their work. Never should the government chastise success. They like to whine about record profits when it's profit margins that really tell the tale. There, one doesn't see anything over which to get one's panties in a bunch. But the libs don't get how hamstringing the producers causes the problems over which they'll eventually complain.
    Eric said...
    True enough Marshall... there's a world of difference between profit and profit margin.

    "Peak Oil" is a myth Dan. And even if it weren't we haven't been pumping oil to the surface long enough to even make a respectable dent in what the earth might reasonably have to offer. How do you account for Eugene Island 330? Strong evidence points to oil (like coal and natural gas) being "Abiotic" --not the product of long decayed biological matter, but self-replenishing from sources within the earth's mantle.

    All that aside, had Clinton NOT vetoed the bill that would have allowed oil companies to drill in ANWR, we would very likely not be in the position we are today. IF Florida and California would allow drilling offshore we would likely have found the very patches that Cuba and China are now drilling.

    I have trouble taking a report from US News seriously, but in one respect (a very small spectrum thereof) the report is right in that were we to drill TODAY, the price would not go down. It would take ten years before ANWR produced the amount of barrels needed to soften the blow at the gas pump. We'd also have to build refineries. A few more nuclear power plants would be nice too. In the meantime, we could continue to advance the technologies that will eventually replace oil as our primary source of Go-Juice.

    My point is, blaming "Big Oil" for our current woes is deceitful at best. Government's "profits" far outstrip those of Big Oil. And threatening to take over oil interests in America smacks of Hugo Chavez... Were government to do that gas prices would rise even higher, and the only ones guaranteed a continual supply of gas would be politicians and government entities. Were government to even try to steal a publicly held corporation from its investors there would be political hell to pay.
    Dan Trabue said...
    Peak oil is a reality unless you believe that somehow oil is a limitless resource. If you acknowledge the reality that it is a finite resource (x billion barrels in the earth), then at some point, we will have reached 1/2x billion and that will leave the deeper, harder to get stuff. PLUS, having an ever increasing demand for the stuff. Prices will go up.
    Anonymous said...
    The sticking point I have is that the US Gov subsidizes the oil industry. That might have been needed in the 90's when price/barrel were in the crapper. But now oil companies a raking in huge record setting profits. It's time the U.S. stopped paying Exxon, et.al $2-3-billion per year. Lets turn those funds to some other national priority.

    On the issue of sustainability, oil is not a short-term renewable resource. Drilling in America's deposits would be a long term project with small returns in an uncertain future. In ten years scientists could have perfected cheap fusion, or direct gravitational energy. Think about the internet and computer technology ten years ago compared to today. That's the pace of modern scientific advance and research. The best market-driven solution is for the government to take a hands off approach to oil prices or supplies.

    If high prices lead to increased public transportation and carpooling, don't conservatives complain about the death of communities and social interaction? If people stop driving so much, isn't that a boon to road maintenance costs, and local farmers? American society in the 70's eighty's and ninety's transformed because of low oil/energy prices. Now the rest of the world wants what we got. Unfortunately, there just isn't enough supply to suit the demand (right now). We must lower our standards so that the asia and africa and south america can enter the twenty-first century.
    Dan Trabue said...
    The best market-driven solution is for the government to take a hands off approach to oil prices or supplies.

    Here's a case where I largely agree with a market solution. End the oil company/motorist welfare - let each pay their own way without help from the gov't - and that will have the effect of further raising gas prices (which are seriously under their actual costs) and that will have the desired effect of slowing down the rate with which we are currently hyper-consuming oil.

    As someone once said, "If we're going to end welfare, let's begin by ending welfare for corporations, the rich and with all those who can most afford to lose it."

    Or words to that effect.
    Marshal Art said...
    I think there's a bit of a difference in using the term "welfare" for corporations versus individuals. Just as no conservative wants to totally end aid for those individuals truly in need, aid for corps might have a place as well. What I'm saying is that the rule of thumb should be that everyone sinks or swims on their own merit, but there might be other things to consider. How many people would have been without a job if Lee Iacocca didn't get federal help? How would the loss of Chrysler have affected the economy through the impact upon related businesses and industries? Overall, I agree that no one should be eager to pass the hat, but I'd prefer looking at each case individually, whether it's a single person or a corporation. Try to solve it locally first and then move on from there, but don't balk if the best answer is to do nothing and let things play out naturally.

    A rather hurried comment, but I don't believe that those who insist we start with corporations when when talk of ending federal help comes up looks deeply enough at the possible downsides to that attitude. It's far too pat an answer.
    Erudite Redneck said...
    Re, "aren't the Laws of Supply and Demand the explanation for the increase in price?"


    There's an oil bubble on, y'all. Like all bubbles, it'll pop.

    Two more words: Cheap dollar.

    Supply and demand have little to do with this. Refining capacity has more to do with it than plain ol' S&D, although there's no good reason not to drill in ANWR as well as the Gulf now. Politics at the highest levels also has this thing sll gummed up.
    Erudite Redneck said...
    Dang it. I hate it when I agree with MA :-)

    "I don't believe that those who insist we start with corporations when when talk of ending federal help comes up looks deeply enough at the possible downsides to that attitude."

    But, welfare is welfare. I am not against subsidies per se, whether its directly to individuals or to corporations.

    On bashing Oil, (Big or otherwise): Nobody gave a damn about oil companies, or the everyday people who worked for them, or the related companies and their employees, or the towns that dang near dried up and blew away in Oklahoma and Texas in the late '80s almost all the way through the '90s, the "brain drain" that Oil Patch states suffered when young people were forced to leave in droves because oil was sitting at $8.50 and $9 a barrel.

    Forgive us if we don't boo-hoo now. And be ready for Blue Dog and socially lib but pro-business Dems to get right up in anybody's face for slapping Oil around now.
    Eric said...
    Wow! How rationally Conservative of you, ER! You're to be commended!
    Marshal Art said...
    Let's see, that's May 25, 2008. I'll celebrate this day annually! ER agreeing with me. Gee...I'm all choked up. I knew it might happen some day, but you never know how you'll react when it does. I had hoped I'd be stronger. *sniff* *snicker*
    Erudite Redneck said...
    LOL. CONSERVATIVE Dem, when it comes to bidness. Generally. But, still, a Dem.

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