Quote:

Oil Company Execs Defend Profits to Senate
By H. JOSEF HEBERT Associated Press Writer
The Associated Press

WASHINGTON Nov 10, 2005 — Oil executives sought to justify their huge profits under tough questioning Wednesday, but they found little sympathy from senators who said their constituents are suffering from high energy prices.

"Your sacrifice appears to be nothing," Sen. Barbara Boxer, D-Calif., told the executives, citing multimillion-dollar bonuses the officials are receiving amid soaring prices at gasoline pumps and predictions of more of the same for winter heating bills.

There is a "growing suspicion that oil companies are taking unfair advantage," said Sen. Pete Domenici, R-N.M. "The oil companies owe the American people an explanation."

The executives represented five major companies that, along with their global parent corporations, earned more than $32.8 billion during the July-September quarter. Consumers, meanwhile, saw gasoline prices soar beyond $3 a gallon in the aftermath of supply disruptions caused by Hurricanes Katrina and Rita.

Lee Raymond, chairman of Exxon Mobil Corp., acknowledged the high gasoline and home heating prices "have put a strain on Americans' household budgets," but he defended his company's profits. Petroleum earnings "go up and down" from year to year and are in line with other industries when compared with the industry's enormous revenues.

It would be a mistake, said Raymond, for the government to impose "punitive measures hastily crafted in response to short-term market fluctuations." They would probably result in less investment by the industry in refineries and other oil projects, he said.

Exxon Mobil, the world's largest publicly traded oil company, earned nearly $10 billion in the third quarter. Raymond was joined at the witness table by the chief executives of Chevron Corp., ConocoPhillips, BPAmerica Inc., which is a division of BP PLC, and Shell Oil Co., a division of Royal Dutch Shell PLC.

But senators pressed the executives to explain why gasoline prices jumped so sharply in the aftermath of Hurricane Katrina, when prices at the pump in some areas soared by $1 a gallon or more overnight.

Sen. Bill Nelson, D-Fla., asked why the industry didn't freeze prices, as it did after the Sept. 11, 2001, terrorist attacks.

"We had to respond to the market," replied Chevron chairman David O'Reilly.

Raymond said that after Sept. 11 "the industry wasn't concerned about whether there was adequate supply," as it was after this year's Gulf storms. By keeping prices higher, adequate supplies were assured, he maintained.

Democrats said that during the storm some Exxon Mobil gas station operators complained the company had raised the wholesale price of its gas by 24 cents a gallon in 24 hours.

Raymond said his company had issued guidelines "to minimize the increase in price" but added, "If we kept the price too low we would quickly run out (of fuel) at the service stations."

"It was a tough balancing act," said Raymond, who said Exxon Mobil was not price gouging.

A number of Democrats have called for windfall profits taxes on the industry. Other senators, including Majority Leader Bill Frist, R-Tenn., have said it may be time to enact a federal law on price gouging.

Some Republican and Democratic lawmakers have suggested that the oil companies should funnel some of their earnings to supplement a federal program that helps low-income households pay heating bills.

That brought a cool reception from the executives.

"As an industry we feel it is not a good precedent to fund a government program," said James Mulva, chairman of ConocoPhillips.

The head of the Federal Trade Commission said a federal price-gouging law "likely will do more harm than good."

"While no consumers like price increases, in fact, price increases lower demand and help make the shortage shorter-lived than it otherwise would have been," FTC Chairman Deborah Platt Majoras told the hearing.

"That's an astounding theory of consumer protection," replied Sen. Ron Wyden, D-Ore.

Majoras said the FTC recently formally demanded documents and other data from many of the major oil companies in connection with investigations into pricing activities after Hurricane Katrina and into whether companies have manipulated prices by reducing refinery capacity. The refinery investigation was directed by the energy law passed last summer, with a report due to Congress in the spring.

Mulva of ConocoPhillips said, "We are ready open our records" to dispute allegations of price gouging. ConocoPhillips earned $3.8 billion in the third quarter, an 89 percent increase over a year earlier. But Mulva said that represents only a 7.7 percent profit margin.

"We do not consider that a windfall," he said Mulva.

Chevron's O'Reilly attributed the high energy prices to tight supplies even before the hurricanes struck. He said his company is "investing aggressively in the development of new energy supplies."

Shell earned $9 billion in the third quarter, said John Hofmeister, president of Shell Oil Co., but he said the company's investment in U.S. operations over the last five years was equal to its income from U.S. sales.

"We respectfully request that Congress do no harm by distorting markets or seeking punitive taxes on an industry working hard to respond to high prices and supply shortfalls," said Hofmeister.

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

I hope the @!#$ @!#$s choke on exhaust fumes.

Its a load of sh-t!! What I think is cool is how the senate wants the oil companies to
donate some of there record profits or oil to poor families so they don't freeze this winter. Problem is the oil companies look at even Donald Trump and think hes poor by way of comparison.

I say we start hi-jacking some tanker trucks and give away the gas alla Robin Hood style.




Semper Fi SAINT. May you rest in peace.

sounds good to me seeing as how gas just went up 20 cents a gallon here for no f'in reason.

sounds like alot of communist ideals floating around in your government.
what happened to the free market system. your government has no business looking into how much profit the oil companies make.... their only purpose is to make a profit... just like every other private company in the world.
why should they give to the poor just because they are rich? they earned it,,, should you as individuals now have to start paying 20% of your income because you make over 80k a year?

They don't care about making profits they care about theft ( well not really but if its not them doing it it pisses them off ) Supply and demand are one thing but to create a problem in order to jack up the price is illegal. Not 100% sure but I'm thinking this falls under the interstate commerce clause.




Semper Fi SAINT. May you rest in peace.

blurred wrote:sounds like alot of communist ideals floating around in your government.
what happened to the free market system. your government has no business looking into how much profit the oil companies make.... their only purpose is to make a profit... just like every other private company in the world.
why should they give to the poor just because they are rich? they earned it,,, should you as individuals now have to start paying 20% of your income because you make over 80k a year?

Not necessarily. There's nothing wrong with a business making a profit but making a huge profit on a Major natural disaster is disgusting. Home heating costs are doubling or tripling over last winters prices, some people will face either having food or heat when springtime comes around since most places have laws in place that prevent gas and heating oil companies from cutting the supply off if you can't pay your bills during the winter. If they were intelligent they would donate $1billion or more to that low income federal program since they're getting a pretty bad rep in the publics eyes. The government has every right to look into it since they are working for us and we want answers!

blurred wrote:sounds like alot of communist ideals floating around in your government.
what happened to the free market system. your government has no business looking into how much profit the oil companies make.... their only purpose is to make a profit... just like every other private company in the world.
why should they give to the poor just because they are rich? they earned it,,, should you as individuals now have to start paying 20% of your income because you make over 80k a year?

It's not called "profit". It's called "price gouging" and "profiteering". If you let one giant industry do this and get away with it, what is next? A $35,000 stock base model Cobalt? $175,000 Corvette? How about on the level of alcohol. Your Colt 45 or 50 w/e it is, is not $10.00 at the local 7'11. Where would it stop?

You see, when the oil company makes "their profit" the consumer is slammed with the bill. Not just on gasoline, but everything. I personally am not bitching about this. But I am going to use my Suburban as a good point.

May 18, 2004 gas estimate of $1.94 quoted from Money.cnn.com

After Hurricane Katrina: $2.99 (est again, actually higher in places)

Difference: $1.05 per gallon

My suburban has a 31 gallon tank. The cost difference between then and now is $32.55 per tank. So, if a normal person drives this vehicle to work everyday, which some do, can you imagine the increase of cost? Do you know how much food you can get for $32.55. Hell you can even buy a bottle or two of alcohol!


Josh
SLK 32

spikej wrote:Not necessarily. There's nothing wrong with a business making a profit but making a huge profit on a Major natural disaster is disgusting.

How is this different from Ford or Apple profiting from World War II?


______________________________________________________________

ToBoGgAn wrote:we are gonna take it in the ass and like it, cause thats what america does.

Slo2pt2 (Projekt Unknown?) wrote:One my SON is ADHD N.O.S and Autistic Spectrum Disorder. I will nto medicate him he will battle throught this himself and learn to control it.

hey, they didnt create the natural disaster... gas prices are half what they are in europe... how are they charging "too much"? it seems that you are enjoying half-price gas to me.
in a free-market economy they can charge whatever they please and raise prices for any reason they want. in a free market economy it is the consumer who decides the prices. if you chose not to buy fuel at those prices then they would have dropped very quickly as the oil companies would not make any money.

it is not the oil company's problem if you cant afford their product. if you cant afford it, dont buy it!

just remember they have no responsibility to you the consumer. their reason for being is solely to make money.... every company in fact.
unless they are run by the govenment you should not expect them to pander to you, you can speak by not using their product though... but judging by the amount of large trucks on the road with little ladies in them and pseudo-macho guys commuting to work on smooth freeways, it seems you are doing it to yourself.

go ahead and enjoy your half price gas, and remember that soon the prices wil be more like europe.

and buy stock in oil companies lol.

The reason Europe has such high gas cost is government imposed taxes.


Josh
SLK 32

^^^ Wrong, it costs more because they use better Gas, and have less refining ability on the continent. Taxes on gas in europe are no higher than in Canada.

The oil company's CAN'T justify their profits, they're overcharging to the hilt, and are getting heat for it.

They've tried this before, and they'll get swatted as soon as a non-oil interested President gets in power to sell off part of the Strategic Oil Reserve, and start undercutting those crooks.



Transeat In Exemplum: Let this stand as the example.

32.8 Billion? People are freaking out over that? For the love of God and everything Holy 32.8 Billion is nothing in comparison to other companies...think about Microsoft during the whole Y2K scare, I bet they made a hell of a lot more than that duing the August-September quarter of 1999.

And considering that the figure is from 5 international corporations, the US Congress is looking for a scapegoat once again.

I can vouch for the better gas...

The "low grade" in Slovakia is 95 octane.


Goodbye Callisto & Skaði, Hello Ishara:
2022 Kia Stinger GT2 AWD
The only thing every single person from every single walk of life on earth can truly say
they have in common is that their country is run by a bunch of fargin iceholes.

Quote:

Gas Prices in Europe - European Gasoline and Diesel Prices
Your Guide, James Martin From James Martin,
Your Guide to Europe for Visitors.
FREE Newsletter. Sign Up Now!

Oct 6 2005
Find current gas prices in Europe and learn how to save money on gas
One of the big questions for budgeting a European vacation is the price of gas. In short, European prices are considerably higher than they are in America, about 2.3 x higher.

Make no mistake: the price of the raw gas is about the same as the U.S., but Europe taxes gasoline at a higher rate. At the moment, taxes in France make up about 70 percent of the pump price. For comparison, the U.S. federal gasoline tax of of 2005 was 18.4 cents per gallon, with each State adding between 10 and 33 cents of tax, according to Widipedia. That makes the maximum gasoline tax rate 17% in the U.S.
How do I determine the current price of gas in Europe?

The U.S. Energy Information Administration tracks International Energy Prices weekly via graph of the data, showing data from 6 European countries. You'll find the following resources:

Really GAM? It may be better quality but 70% tax?


Josh
SLK 32

Also read this link, just another example.


Josh
SLK 32

blurred wrote:sounds like alot of communist ideals floating around in your government.
what happened to the free market system. your government has no business looking into how much profit the oil companies make.... their only purpose is to make a profit... just like every other private company in the world.
why should they give to the poor just because they are rich? they earned it,,, should you as individuals now have to start paying 20% of your income because you make over 80k a year?

I think you're wrong there. Companies have every right to make profit on what they sell, that's the basis of our economy. But, when it comes to certain things that the population needs to survive, gas and oil being two of them, there needs to be a cap on the price that can be charged for the product. If people want to pay $5000 for a wide-screen HDTV, fine, if they can afford it then they should spend the money for it. That's a luxury. Gasoline, heating oil, natural gas, milk, etc are necessities. People need to buy gas for their cars so they can get to work, they need to heat their homes this winter, we have no choice. When companies start charging very high prices for basic necessities then the government needs to step in and maybe put some controls on the companies, if they can't control themselves.

or at least use the capita to create more jobs,

But we're shipping those out to Third World countries (The Ozarks).




Goodbye Callisto & Skaði, Hello Ishara:
2022 Kia Stinger GT2 AWD
The only thing every single person from every single walk of life on earth can truly say
they have in common is that their country is run by a bunch of fargin iceholes.

Whore: You're applying France's tax on gasoline (which is about the highest on the continent) to the all other countries... Bad Idea. Holland (okay, okay, Netherlands) has a 13% state tax on petrol (and that gets abated if you have a truck that is over a certain height), but because there are very few real roads outside of highways, it's not a big issue.

Also, look at the rest of the post, Europe has less refining capacity, and less storage capacity. Europe is fed by pipelines, but:
#1: Higher grade fuel = More refining = $$$
#2: More refining = More refinaries = More land in a limited space = $$$

You also don't see in the articles you linked to, that there are Tax incentives for Gas users that drops the rate of taxes on Gasoline (not Diesel fuel, but that's always cheaper per litre) by about 35%.

Adam: That's $32.8 Billion net in ONE QUARTER, and that's only the top 3 oil Companies doing just that amount. There is no other commodity company or industry pulling down that much extra coin at any given time. The Government needs to throw some sand on that fire unless you really want to mortgage your house everytime you want to buy a tank of gasoline.




Transeat In Exemplum: Let this stand as the example.

but, the government has also made some comments about the "rich feeding the poor".
whether or not they are "gouging" their customers is inconsequential in a free market. however they should not be subsidizing those same customers who cannot afford their product. for a country that seems staunchly anti-socialist, it sure seems a little bit hypocritical.
microsoft makes alot of money from seeling software. should they give me money because i can't afford it? its fair to say that computers are as much a neccesity as gasoline for the private individual. because they arent neccessary for survival. they are nice to have, but simply arent a neccessity of life.
and gasoline isnt much more refined in europe. diesel is, but gasoline is almost the same as here, simply with less sulphur, but that is changing alot wiht north american companies reducing sulphur amounts closer to europes. octane is almost the same with europe using a different system for calculating octane ratings. their 98 is similar to our 93/94.
oh well your citizens will benefit from the new socialist ideals of some of your governent i'm sure. i guess something good came out of the cold war after all.
whats next? how about a dicatatorship instead of that democracy thing you seem to love so much.

The gas companies have the right to charge whatever they want in my mind. WHY? becasue its business. If CHevy wanted to charge 35,000 for a cobalt then don't buy it! The price will go down then. Same thing with gas. The only reason the Gov't has a problem with it is because they use so much Fing fuel THEY don't want to pay the prices. rest assured people if the Gov't didn't have an "intrest" there would be no such thing as gouging. The companies would be alowed to charge whatever they please. as they should. if we don't like it we have other options! Welcome to the USA and the world of commerce as it should be.




(Insert really cool picture of my car with some catchy name or slogan here)

blurred wrote:for a country that seems staunchly anti-socialist, it sure seems a little bit hypocritical.

America is a highly diverse country. Myself and many of my friends would welcome socialism. In a socialist society you can support higher costs of living, because the basics of life if not available are provided by the government. A ghetto in Norway is like a Middle class suburb in America if you want a comparison.

Also Europe has a far better public transportation system than america. Many times a car is not an option but a necessity.

blurred wrote:microsoft makes alot of money from seeling software. should they give me money because i can't afford it?

Bill Gates, the man, and his company Microsoft donate Millions to charity every year. Gates understands strongly the benefits. Educational and non-profit discounts make the software more affordable to those who need it to learn and help society. Many throw a stone at M$ but for all the money they make they give a hell of a lot of it back to the community in donations and charities, not just in discounted software sales

Oil companies do charge too much. They've got the hottest product on the market.

Yes prices do fluctuate, but NOT in a matter of hours. The only reason demand for gas increases is because people are afraid the price will rise, so they jump out to pay $3.00 a gallon. I live 3 miles from work so I was able to make the choice of not purchasing gas for a week, but most americans do not have that luxury.

In a free market prices are derived from demand, NOT the anticipation of it. Guess which one the oil companies use...


-Chris

The better question is why doesnt the government let them build more refineries, there hasent been one built in over 25 years.

Everyone is fast to complain when prices go up, and how its hurting your pocket book. If you fill up once a week, and it costs 5 more dollars to fill up. So over a month an extra 20 bucks, if that is causing you to have a major crunch on your bills, I think its time for a second job.

Frankly if you want to complain about them making so much money, hey buy a more fuel efficient car, slow the hell down on the highway and not almost run me off the road. Do some basic car maintenance.

Actually foreign oil producers in the middle east on more than one occasion have offered to help the US oil producers build better more efficient refineries. But the us producers refused the offering.


-Chris

blurred wrote:just remember they have no responsibility to you the consumer.

Actually they do because without the consumer they would be out of business.

blurred wrote:but, the government has also made some comments about the "rich feeding the poor".
whether or not they are "gouging" their customers is inconsequential in a free market. however they should not be subsidizing those same customers who cannot afford their product. for a country that seems staunchly anti-socialist, it sure seems a little bit hypocritical.

The problem is that there is not a viable alternative for energy. They can charge whatever they want, and we MUST pay it, it's called a monopoly for a reason, they have an open market, but the ask-bid prices are usually within a dollar of each other, and there is no sustained downward price trading. If there was an alternative like, say, Biodiesel (which the petroleum industry heavily lobbied against, don't forget) or a more economical electrical powered vehicle, then the point would be moot. However, at this point:
- over 80% of goods are transported by Diesel-Electric Trains, Diesel or Gas burning Trucks
- 90% of all consumers that have a vehicle, have a gasoline burning engine.

You pay on the front end (more money for the fuel to get you to buy products) and you pay on the back end (with higher prices on goods because of higher fuel costs).

It has to end somewhere. There's such a thing as a "free-market" collusion scheme, and that's what's happening, unless you're utterly blind.

Quote:

microsoft makes alot of money from seeling software. should they give me money because i can't afford it? its fair to say that computers are as much a neccesity as gasoline for the private individual. because they arent neccessary for survival. they are nice to have, but simply arent a neccessity of life.

Bad logic: if you need software from a company, you buy it ONCE. You use it as often as you like, and it's a capital expenditure from which you can derrive as much use as you like. Fuel on the other hand, is something you must keep paying for as long as you need it, otherwise known as a recurring expense.

Quote:


and gasoline isnt much more refined in europe. diesel is, but gasoline is almost the same as here, simply with less sulphur, but that is changing alot wiht north american companies reducing sulphur amounts closer to europes.

Again, incorrect. To get the sulphur OUT of the oil, you need to process it. Either on site at the point of extraction, or at a depot before distribution. Either way, it's the same oil as the US gets in most cases.

Quote:

octane is almost the same with europe using a different system for calculating octane ratings. their 98 is similar to our 93/94.

Quote:



Their regular fuel is comparable to our 91 octane fuel. Theirs goes up into 100+ octane fuel, ours caps out at 94 (in most places).

Quote:

oh well your citizens will benefit from the new socialist ideals of some of your governent i'm sure. i guess something good came out of the cold war after all.
whats next? how about a dicatatorship instead of that democracy thing you seem to love so much.

How about acquainting yourself with a balanced approach to a market strategy first, and can the misnomered idioms about political ideals you have little concept of.



Transeat In Exemplum: Let this stand as the example.