Big Oil defends profits before Senate panel

Top executives of the five largest oil companies tried to shift anger over high prices to a debate over supplies Wednesday, leading a senator to accuse them of acting like "hapless victims" while racking up ...

[Clear Thinker]

So can someone ask Durbin, Leahy, and Feinstein why this country won't let them drill for more oil? Or increase our use of nuclear energy? Or install windfarms in Massachusetts? Or even build a new refinery? The Congress denies all these measures then wonders why the price of oil is so high?

There is no free market here. What is Leahy talking about? Why doesn't someone ask Congress some hard questions? Oh yeah, this is an AP article and those kinds of questions are out of line since it might embarrass the Senators. The point of AP articles is to embarrass "Big Oil" as the headline states.

[john]

I guess 12.5 million a year is nothing compared to those two who don't even know how much they make. I know how much I made last year and it was nowhere near 2 million. If supply and demand was the cause company profits would stay the same each year. GIVE US A BREAK. This is nothing but greed and the oil company knows it and they know we have to have it and they will keep digging into our pockets as deep as they can until they break us then all their millions will be worthless.

[Carmine]

Why not use a more than 70-year old technology whereby coal is converted into liquid fuel. The process is called Coal Hydrogenation. Since the United States has the largest coal reserves in the world, our dependence on foriegn oil would be zero.

A few years ago, the U.S. Air Force flew a B-52 with fuel developed from Coal Hydrogenation.....Think of how much the airline industry can save by use fuel from Coal Hydrogenation......

[Wake up and smell the oil]

The gas prices are high, yes. As long as demand is high and supply is low, gas prices will remain high. The economics of the oil business is obviously poorly understood. The price of a barrel of oil or a gallon of gas isn't set by oil companies. It's set by the free market (read: market traders. You know, like those buying stocks). The oil companies are making around 10% profit. That's no bloody windfall. Because of the scale of these behemoths, it looks obcene, but it's only 10% profit. You're going to begrudge them 10%????? WE can buy smaller vehicles. WE can reduce wasteful driving habits. WE can slow down. WE can reduce demand and increase supply and let the market react by lowering the prices. WE just don't want to. WE don't want to be inconvenienced. WE are spoiled brats. WE want to make someone else responsible.

[Bob]

Congress can have hearing all day and all night for as long as they want BUT the American people know it is a scam. The hearing will end and nothing will be done.

How about congress asking and getting answers to these questions: Where are the profits going? Salaries for Management, more refinerys, alternate energy, etc. Yea we all know where the money is going and not to reduce the price of gas.

It is time to make big oil answer the tough questions and if answers amount to ripping off the American people for profit then IT IS TIME TO REGULATE THEM AGAIN. When big oil was regulated there was no problem, remember deregulation was done so they would be competive and lower the price, yea sure all they did was grow extremely rich and "because of republican politicans" congress managed to forget about anti-trust laws and the big six merged into the big two..........gotta love greed and politicans. Make no mistake big oil is ripping off America and almost single handedly causing this recession just because of GREED.

[hmm]

Wake up and smell the oil wrote:

The gas prices are high, yes. As long as demand is high and supply is low, gas prices will remain high. The economics of the oil business is obviously poorly understood. The price of a barrel of oil or a gallon of gas isn't set by oil companies. It's set by the free market (read: market traders. You know, like those buying stocks). The oil companies are making around 10% profit. That's no bloody windfall. Because of the scale of these behemoths, it looks obcene, but it's only 10% profit. You're going to begrudge them 10%????? WE can buy smaller vehicles. WE can reduce wasteful driving habits. WE can slow down. WE can reduce demand and increase supply and let the market react by lowering the prices. WE just don't want to. WE don't want to be inconvenienced. WE are spoiled brats. WE want to make someone else responsible.

yes. too bad every idiot out there will ignore the fact that their margin is in line or slightly better than the average. every idiot calling for oil exec heads cant see that

oil price up --> oil company pays more --> consumer pays more

if anyone wants to blame anyone, look at OPEC and ourselves for being so dependent on it. The companies can put more of their money into researchign ways to increase refining capacity, but that would most likely affect their margin. forcing them to do so would make it an altruistic venture at the cost of oil companies... in other words making them pay for our sins as consumers.

yes, the oil companies can invest in alternative energy sources, but that is not their primary business. their massive infrastructure is geared toward fossil fuels (the derricks, the refineries, etc), so why should they invest more $ into something that could compete with them unless it makes financial sense to do so?

That burden should fall on congress to provide incentives to make things like alternative fuels cheaper in the long run. then you will see a whole different industry.

lesson in a nutshell: SCALE. if you take a margin of 10% on $100, its onnly $10. but when you talk about billions, it's obviously going to be larger.

if you want to look at trimming executive pay, look to Wall Street where execs get filthy rich at the expense of sharholders on a regular basis.

Oil execs are just providing us with something we grew dependent on ourselves.

we can be such big hypocrites.

[rgb]

"Wake up and smell the oil" wrote "The oil companies are making around 10% profit. That's no bloody windfall. Because of the scale of these behemoths, it looks obcene, but it's only 10% profit. You're going to begrudge them 10%?????"
Yes I will begrudge them 10% if that is real. First, most major corporations only make 3 to 4%, not 10%. Second, the cost of oil to the oil companies is a small part of the total cost of production. And by everything I've heard the production cost is the largest part of the overall cost of gasoline by far. Third, the profit margin should be set on an approximate dollar value rather than by percentage when there is this kind of fluctuation in the price of the raw material.
You bet your life this is windfall profit. Tax the hell out of them but be sure to collect!! Then cust the tax on the gasoline an equal amount so we don't pay it twice!

[hmm]

rgb wrote:

Third, the profit margin should be set on an approximate dollar value rather than by percentage when there is this kind of fluctuation in the price of the raw material.

can you clarify that a bit? i thnk im looking at it differently. i would think a % would be more responsive to fluctuations since if costs go down their relative profit goes down because it owuld be the same % year-over-year if you are talking about setting a %age.

[EvilBob]

Only fix i can see is to remove all of congress by force if necessary and start over. this country with all it's hight tech gear cannot win a war against itself.