Neil Cavuto gives us a preview of the kind of idiocy we’ll get from Fox when they launch a business channel.
It is easy to make the oil companies villains, when they’re making dough. It hardly seems to rate when they are not.
The oil companies need no lobby. Sometimes I just wonder if they need something else: a fair shake.
Who, who will stand up for the poor oppressed oil companies? They may not break the record for profits by a U.S. company for the third quarter in a row! And poor Rex Tillerson may not have as much money to dispense into RNC pockets. The tragedy of it all.
I tend to think too that the lack of development and initiative in this country to find alternative sources of energy and fuel is a direct result of the power oil companies have. They don’t want inovation and their nice little government handouts going somewhere else. Plus if there are viable alternatives to oil out there they don’t want the competition cutting into their record profits. I have no sympathy for them whatsoever. Free market nothing. They dominate the entire industry and subversively thwart any attempts at something new coming along and competing. Hell…they don’t even try to increase output and refining capacity because they know if they keep production low and demand goes up they can charge even higher prices with no increase in their overhead. Mo money mo money mo money. Plus there’s the whole issue of the environmental impacts of what their products do. I’m not some greenpeace freak but we can’t ignore that there’s a real problem anymore. Two industries in this country get no sympathy from me. Big Oil/Energy and Health Insurance. These monsters of “business” totally control the markets they are in and have no regard for their action’s consequences on the American people. All they care about is the almighty dollar.
Dugger, I think the problem is that on top of their record profits they get billions of dollars in subsidies, tax breaks, research grants and royalty relief each year. They also get relief or exemptions from many environmental regulations. Not bad for a free market industry, AY Duuger?
Then by your logic, they should stop doing that, right?
Why should a work-from-home, telecommuting, sunbelt worker have to pay so oil companies can provide cheaper oil so cold-climate commuters can drive their SUVs and heat their homes?
LB,
Then the oil supply is equally finite, with all the inherent drawbacks and risks entailed therein, for the existing oil companies.
And being a war profiteer, per se, is not immoral or wrong. It means you make a profit supporting our armed forces - as requested by those armed forces. Re profits: I assume you would rather that we support the troops and that it is unfair to ask companies to go out of business and support the troops.
So perhaps you mean they make excess profits from the war? If so keep in mind most analysts have said that the oil companies profits are the short term result of expanding overseas markets (asia) demand and rising prices - a temporary condition.
And DOD negotiates the very best prices it can for oil and gas on the competitive market, usually long term ordering agreement type contracts with pre-set profit margins. I doubt they are getting gouged.
And if you are mortally opposed to the oil comapnies having a high profit cycle are you willing to pay them subsidies when they have a low profit or a losing quarter? Or are they just Sierra Oscar Lima?
Dugger, It Ain’t That Simple
Dugger,
Maybe because its a finite resource? They can’t just manufacture oil, nor can they simply buy up the land where it is. Why? Cause the other companies have it. J.P. Morgand and Rockefeller perfected it, now Exxon and their ilk is exploiting it.
As for why the’re being treated badly, I think their war profitters. They’re taking an essential substince and jacking up the price due to crisis (Katrina, Iraq, Iran etc.) And if they’re just keeping up with the situation, then why are they posting a record profit. The whole thing stinks like yesterday’s diapers. I’m not against the free market, but at a certain point being a decent human being should have something to do with it.
Mitter, Don’t know if I support the subsidies, though my understanding is that they (subsidies) are for the oil comapnies to do something that, business-wise, is a loser, explore for new oil.
Also the oil business is notoriously up and down. Price has dropped from over $70 in Aug to sixties in Nov. You don’t have fluctuation like that in other markets.
We once had a windfalls profit tax on oil and that didn’t work. Not sure what the answer is.
I still wonder, if it is so easy to do, and oh so righteous, as the left indignantly proclaims, why doesn’t someone on the left open up their own big oil comapny and do it better? Hollywood is making tons o’ bucks. MoveOn and their ilk are having to burn money to handle the storage problem. POB anyone? Progressive Oil of Berkeley. Ben and Jerry’s Cherry Garcia gasoline?? Wonder why not.
Dugger
It might help the oil companies’ position out a little more if they would finally pay the $4.5 billion (plus interest) they owe for the Exxon Valdez cleanup. You know, since they made over 36 billion in profits last year alone. Or even if they stopped lying and said that they’ve cleaned it up when they haven’t. Those poor oppressed oil barons.
As an added bonus, you could check out the last few graphs at the first link - apparently Exxon gets a kickback on any damages that they are forced to pay out in this lawsuit. There’s some compassionate conservatism at work for ya!
I lost all respect for them when they jacked up the price 2 bucks during Katrina and assured us that it was temporary. Yea, sure. And I think that’s got more to do with excess profits than Asia.
How can you say being a profiteer isn’t inherently wrong? There are men and women dying out there, lives have been ruined, New Orleans has been eliminated and these guys are thinking about their next house in the Hamptons. I would have more sympathy if they turned aoorund and gave 1% of the at record profit and bought body armor or rebuilt houses or helped in any way, shape or form.
No, I’m not willing to give ‘em subsidies. Fuck ‘em. My boss doesn’t give me more money if I have a bad month, why should they?
LB
If by profiteer you mean somebody who has a corner on the market and charges an excessive price for excessive profits during war or any emergencey, then I agree thats a bad company. However, if you mean a company who provides something needed by the armed forces and makes a profit , I don’t have a problem. Your company is always free to make the same item and sell it for less. And we have not established the oil companies fit profile number one.
Dugger
The price retreated from historic highs to what until 4 months ago would be historic highs? Basically, anything above $40/barrel is pure profit. Hell $30/ barrel probably yields high profits on 99% of the fields. We are talking record profits here. Huge vast sums of unadulterated cash. Why do we need to give them another $30 billion+ each year in tax payer money? If its a finite resource, it seems the intelligent thing to do would be to pour more alot of that money into research and development of alternate power sources rather than give money to private companies that are doomed anyway.
As for developing new fields and exploration, I am sure if they opened up opportunities for typical investors, plenty of money could be raised. I am sure things similar to RITs could be formed. Basically, that kind of investment is beyond the scope and expertise of typical investors.
But assuming we cede that exploration is important and the government should subsidize it, why should oil companies get royalty relief? The government underwrites their venture to protect them from loss, then basically needs to give them the public’s oil too?
Do I understand you right, Dugger?
A company that uses a no-bid, indefinite quantity contract to enrich itself at public expense is just practicing free enterprise.
But a person who says naughty words about soldiers is “hurting the war effort”?
Holy moley.
punks mostly
Dugger
“Do I understand you right, Dugger?
A company that uses a no-bid, indefinite quantity contract to enrich itself at public expense is just practicing free enterprise.
But a person who says naughty words about soldiers is hurting the war effort ?”
No Quaker, you don’t seem to understand. First of all we were not talking about a contract as you describe. Secondly, possibly you are talkng about a Halliburton type contract. Such contracts are typically established on a time and material basis and can run for several option years and have large ceiling amounts. But the base contracts are competed and then orders, sometimes large orders (which looks to the unitiated look like sole source awards), can be placed against the prenegotiated time and material rates - which also reflect a predetermined profit level % But the base contract was bid and any competent entity could vie for the work.
It might interest you to know that most major DOD contracting firms shun such contracts because they typically lose money (they can only charge a negotiated fixed rate and if their costs rise dramatically - they are usually SOL).
And absolutely, a, say powerful senator, who criticizes soldiers doing their duty fighting a war, and uses a major platform to do so, could easily be hurting the war effort and the soldiers. Now if the criticism were accurate and true and not inflammatory, said criticisms might (MIGHT) be just and necessary (though still harming soldiers). But if they are exaggerated, conjure negative emotional images about our troops (like using Nazi metaphors) and same said powerful senator uses the prestige of his position to make these harmful and unjust criticisms, then he is a first class SOB in my book - an SOB who has helped hurt our soldiers - risking their lives for us.
Dugger
As usual, Dugger has no clue as to what he’s talking about.
It might interest you to know that most major DOD contracting firms shun such contracts because they typically lose money (they can only charge a negotiated fixed rate and if their costs rise dramatically - they are usually SOL).
This is laughably false. I’d ask Dugger to cite one contract where a major DoD Contractor has lost money–but I know he can’t because it doesn’t exist.
The Halliburton contract is an ID/IQ contract which is impossible to lose money on unless you lose the checks on the way to the bank.
http://msnbc.msn.com/id/8646744/
This is the mother of all booms, said Oppenheimer & Co. oil analyst Fadel Gheit. They have so much profit, it s almost an embarrassment of riches. They don t know what to do with it.
What exactly are “record profits”, anyway? Making more money this year than last year? Isn’t that what you’re supposed to do? You may not get a raise every year, but you want one, don’t you?
Quit using the anti - capitalist buzz words, and look at Cavuoto’s very small point: The minute gas and heating oil prices go up, the oil companies are gougers.
This happens with things like milk, fruit, and other commodities. But that term is never used.
When the price of gasoline and heating oil comes down — silence.
Why?
If you type Record Profits in Google you get 44million hits. The first 20 pages are all links to stories on Oil Companies profits.
Exxon Mobil Corp. yesterday reported the highest profit in US history: … In 2005, Exxon Mobil Corp. posted the largest profit ever for a US company. …
I believe largest ever is another way of saying record. So that’s what record profits are.
Jadegold,
You have yet to challenge me successfully and you fail again. Once you challenged me on my service. I offered to send a third party money if you would, and then I would send my AF retirement papers. We strangely didn’t hear from you for a long time. Guess what. You are wrong again. I worked on major programs and I saw contractors lose money, especially on FFP contracts. Contractors also often lose money on R & D contracts - hoping they will get a subsequent production order and don’t. Talk to an adult in the Pentagon next time you are dropping off a pizza and they will tell you more.
However, from Gov. Exec.:
On just one contract - to refurbish the Navy’s P-3 Orion surveillance aircraft used primarily to hunt submarines - Raytheon’s Aircraft Integrated Systems unit reportedly lost as much as $70 million last year because it found the job much more difficult than anticipated
Dugger
those countries with the ability to boost output now have little incentive to do so if they wait and get more money for the same oil in the future.
Dugger, I don’t doubt the validity of your qualifications to speak to these matters.
Perhaps you could explain the significance of the term “IDIQ.” Maybe that would clear things up for me.
Again, Dugger, you’re a fraud. You served in the AF just as much as you’ve hit 700 MLB homers.
Cite a contract of a major DoD contractor that has lost money. I’ll even let you call a ‘major DoD contractor’ be a company that has just $10M in annual revenues.
Since I’m a bit more than passingly familiar with the P-3 program, I’m going to call your bluff. Cite the contract. I’m aware that the P-3 was undergoing SLEP and the costs were rising; the Govt. merely mod’d rthe contract and the contractors came out just fine.
And in reality, that what always happens. Contractors tend to low-ball cost props in order to get their foot in the door. Once they’re in, they realize the Govt. isn’t going to cut them off (unless there’s criminal activity involved) because the Govt. realizes it would take several years to terminate and recompete a contract. By then, the costs would have skyrocketed.
Apparently I understand just fine.
Your tedious explication notwithstanding, my summation stands: a corporation that enriches it’s shareholders at the expense of the Department of Defense and the taxpayers is just practicing free enterprise.
However, someone who tosses out a few unkind words about the military isn’t practicing freedom of speech, he’s putting lives at risk.
Up is down.
This from the MSNBC link
“This is something that Americans regard as their birth right,” he said. “If gasoline prices are still north of $2.25 (a gallon) when we reach the midterm election, there’s going to be an awful lot of outrage.” (my comment — let’s see)
Even as their overall profits have soared, major oil companies are earning a relatively modest 8.7 percent profit margin — the portion of the sale of each barrel that hits the bottom line. (my comment — by the end of the story, “record profits” have become “relatively modest.”)
Quaker: Indefinite Delivery Indefinite Quantity (IDIQ) Contracts
http://www1.va.gov/accessible/proc508/IDIQ-K-05081.htm
spitar: You’re not saying that “record profits” means more than any other company in the US, are you?
Exxon Mobil Corporation said today that its 2005 earnings totaled $36.13 billion, an increase of 42 percent from the previous year. The amount is the largest annual profit ever for an American company.
Google the phrases “record profits” or “largest profits ever” and you’ll get plenty of sources that state the oil companies made more money in one year (2005) than any other companies U.S. History. This isn’t just my opinion or speculation. It’s fact.
I’m not saying it…the press is.
Well, honestly, I don’t care. Maybe the profits of some company somewhere keep you up at night, but not me.
Well good for you. It doesn’t keep me up at night either. But what does bother me is that my tax dollars are going to these companies that do not need it. With millions of people lacking health care, housing and the other basic necessities of life I would much rather see programs that help them getting those tax dollars. Corporate welfare to companies that “have so much profit, it s almost an embarrassment of riches. They don t know what to do with it.” don’t need my money. Some guy who is struggling to put food on the table for his family or some person who needs health care coverage is WAY more deserving of that money.
What does keep me up at night? People who are so complacent that they think government having free reign to do whatever they what at the expense of the people they are supposed to be serving.
Your tax dollars aren’t “going to them.” Maybe they’re not coming from them, but that’s quite a different thing. There’s plenty of money available for your pipe dreams, but it’s Congress that’s the problem, not the oil company.
Sorry I bored you Quakie. I do know this business. Really worked in it. Jadegold mentioned IDIQ contracts - not me. Indef Deliv Indef Quan contracts is a contracting instrument the government uses to buy, at economical prices, large quantities of (relatively low risk - laptops would be an example) items. This type of contract can be competed and usually is - because its common technolog. To date the governemnts use of the instrument seems to be irritating private contractors more than helping them - as the common complaint is that the gov. doesn’t buy enough to let the bidder break even. So some vendors are not bidding on these instruments. Thre are many, many other types of contracting instruments and you don’t know a lot about the poarticualr buy, its very hard to understand, from the outside, why a certtain type instrument was used. Much of that data is very sensitive.
Jadegold, (Why do I bother ). I just gave you a quote on the Raytheon contract. Surely you can research that yourself (check Gov Exec.).
And you are unequivocally 100% wrong to say defence contractors can’t and don’t lose money from time to time on certain contracts. I know from persoonal experience, but just Google. ( “The Lockheed Martin Corp. announced last week that it will take a $110 million charge against fourth-quarter earnings after losing a lawsuit filed to recoup money it lost with the cancellation of a nuclear waste cleanup contract.”)
And I gave you a $100 offer before and you ran away? Want it again? Hm?
Dugger
Dugger: thanks for the tip on GovExec.com — great site