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Tuesday, May 06, 2008
Record oil profits, regular profit margins
Crude oil prices approached a peak of $123 a barrel yesterday and record oil profits continued to inspire populist attacks on Big Oil from the Democratic presidential contenders. "We need to go after the oil companies" says Clinton while Obama contends that they are (gasp!) "pocketing the money themselves." In light of these facts and shocking revelations, perhaps we should be taking a closer look at these oil profits. In this interview with Headline News’ lonely capitalist Glenn Beck, Shell Oil president John Hofmeister has some interesting analysis on the solution to energy woes (more drilling) and the consistency of 1st quarter oil profit margins on capital invested with historical numbers (around 7.5%).
(H/T Wladimir)
Posted by Kalim Kassam on May 6, 2008 | Permalink
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Comments
1. Glen Beck is an idiot. Always has been.
2. Oil is over.
Posted by: joe bleau | 2008-05-07 2:04:16 AM
1. Blow joe is retarded.
2. The world still runs on oil. Turning off the taps would mean certain death for billions of people.
High oil prices will certainly convince people to conserve, which is really our best strategy.
Posted by: dp | 2008-05-07 8:20:45 AM
Beck's show is correct. The sleazy politicians (Shillery and McCain) are spouting a tax break on gas for the summer. Big deal,. They need to start drilling in Anwar and off the coasts, and approve refineries. They just use the oil companies as the bad guys when prices are high. They need to actually do something about getting more oil flowing. Hillary even voted against nuclear power. Guess she expects wind power to supply all our energy. Oh wait, Ted Kennedy won't allow wind turbines to harm his scenic New England view.
Posted by: Markalta | 2008-05-07 10:13:51 AM
the simple mindednes of people like joe blows never ceases to amaze me. You off the grid yet joe?
Posted by: orvict | 2008-05-07 10:43:45 AM
I notice that Joe didn't disagree with anything Beck said, but called him an idiot. So, at least have the courage to go after one of his talking points, Joe. Any child could respond the way you have.
Posted by: abc | 2008-05-07 10:47:11 AM
WOO HOO!!! Canada under investigation by Kyoto committee!
http://tinyurl.com/44unwj
Finally! Something to be proud of! I hope that this "committee" says Canada is the worst 'climate changer' in the entire world.
NOT ONE PENNY is to be used on Kyoto.
Posted by: Zebulon Pike | 2008-05-07 11:03:17 AM
When oil companies make huge prifits we are all better. Many of us have shares in energy companies. And even if we don't, 100% of their profit is eventually spent since no company, let alone executive or share holder, can take the money to the grave with them. ALL the profits are spent making more jobs and more profits for everyone else around them.
If we should have a problem with the oil companies it should be that they have a low profit margin. Companies like GE and Microsoft have margins many times greater than the big bad oil companies.
Posted by: TM | 2008-05-07 11:26:17 AM
It's good news on its face, but Harper will cave like the Quebec lacky he is. He'll use it as an opportunity to grow his gov't again.
Posted by: abc | 2008-05-07 11:28:59 AM
It's good news on its face, but Harper will cave like the Quebec lacky he is. He'll use it as an opportunity to grow his gov't again.
Posted by: abc | 2008-05-07 11:29:06 AM
Oil companies would invest their profits in new development if the government would allow it.
Unfortunately the enviroassholes and other special interest groups are preventing this from happening.
They are basically victims of their own orthodoxy.
Posted by: atric | 2008-05-07 2:59:04 PM
Oil companies would invest their profits in new development if the government would allow it.
Posted by: atric | 7-May-08 2:59:04 PM
Which doesn't explain why Rex Tillerson, the CEO of ExxonMobil announced in March of this year that their oil production would be flat until 2012.In other words, producing more barrels just to ease prices for consumers is not part of the company's calculations. Why push crude down to $70 a barrel when you can get $120 a barrel for it.
Posted by: The Stig | 2008-05-07 3:25:51 PM
TS:
Which refineries would process the crude?
Posted by: set you free | 2008-05-07 3:28:47 PM
Which refineries would process the crude?
Posted by: set you free | 7-May-08 3:28:47 PM
How about the Reliance Petroleum refinery in India that when finished later this year will have around 500,000 BPD refining capacity. Most of the refined product will go to the US.
Posted by: The Stig | 2008-05-07 4:05:19 PM
I see that no one has a problem with record gov't profits. They take no risk, produce nothing and reap in billions of stolen dollars. Yet, they have our undying allegience. No questions asked.
Posted by: abc | 2008-05-07 4:47:19 PM
Stig- What a nifty NIMBY response.
Posted by: DML | 2008-05-07 9:08:10 PM
TS, refiners can produce what they want for whatever reasons they see fit. set you free is probably correct in that north american refining capacity is pretty well 100%. But even so, you should have a bigger problem with the government (cons or libs) than the oil companies. One may be able to profit from your free choices, but the other can freeze your bank accounts and put you in jail.
Posted by: TM | 2008-05-07 9:23:32 PM
TM: That was so eloquent, I believe it qualifies as poetry.
Posted by: abc | 2008-05-07 9:31:01 PM
Awesome that he had someone from the Rand society on. Rand knew all about the mind killers that destroyed her country and skulked about New York in the 1930s.
Posted by: Faramir | 2008-05-07 11:19:36 PM
This came to me in a nightmare last night!
Obama’s Bold New Energy Strategy
AJAX News Services, Houston, May 1st, 2010 – Despite record domestic supplies of energy, with oil at $165 per barrel and gasoline prices hovering around $4.75 per gallon, recent national polls indicate that 75% of the American public believes the federal government should cap the price of gasoline, fuel oil and electricity; and prevent big energy producers from making record profits, profits that exceeded $100 billion in 2009. In response to these polls and to fulfill the promise that his administration is one of change, President Obama, Secretary of Energy Hillary Clinton, and key congressional Democrats laid out a bold new Energy Strategy in Houston this morning at the annual meeting of the Alternative Energy Resources Council. In an hour long presentation, Obama and Clinton laid out a six point plan to reduce U.S. dependence on foreign energy sources and prevent profiteering by domestic energy producers. Obama and Clinton are confident that the legislation needed to make this strategy a reality will easily pass the Democratic controlled House and Senate. The following summarizes their six point plan.
• Within three years, all major U.S. energy producers, to include electricity producers, will be nationalized and become non-profit operations under the Department of Energy. This will ensure that energy consumers are treated fairly, and not subject to obscene profits by producers.
• As soon as legislation can be passed, the price of gasoline, diesel, heating oil, coal, and electricity will be capped at reasonable levels. Producers may not sell their energy at prices higher than these caps, but may sell them at lower levels.
• Until such time that energy producers are nationalized, profits from operations are capped at 5% and all subsidies, tax incentives and other federal support for energy producers will terminate. Alternative energy producers may operate at an 8% profit to encourage investment.
• The United States will negotiate wholesale oil prices with major foreign oil producers and refuse to pay per barrel prices higher that $150 per barrel. Obama believes our outstanding relationship with Venezuela, Iran, China and Russia will make these negotiations possible.
• To protect the environment and help stop global climate change, U.S. Energy strategy will reduce domestic energy consumption by 20% in ten years. At first this will be done through rationing and caps on personal energy use. Eventually, once major energy producers are nationalized, the Department of Energy will control the supply to ensure consumption reduction goals are met.
• The final aspect of this bold energy strategy involves the Strategic Petroleum Reserve which both Clinton and Obama believe is not necessary because of the administration’s No War policy. The Reserve will be depleted systematically by the Department of Energy during the transition to nationalized energy production.
After the speech, energy stocks fell 35%, taking $80 billion out of investment and pension portfolios in less than three hours. Obama and Clinton did point out that this strategy will inevitably cause some short-term hardships for some Americans during the transition, but both are confident that the Department of Energy under Clinton is up to the task of running the country’s energy production. Clinton said her Department will set up counseling programs for energy challenged consumers during the transition. Obama was very confident in this strategy and recognized that even though the transition may be difficult, in the end, everyone in America will feel better because big energy producers are not making big profits and the price of gasoline is reasonable. In their Presidential campaigns both Obama and Clinton promised to “Go After Big Oil” and Obama promised change. Obama has always fulfilled his campaign promises and indeed this energy strategy is a big change.
Posted by: Sun Tzu | 2008-05-08 8:30:19 AM
The 'free market' is an illusion a very effective propaganda spewed across the globe extolling the precepts from the gospel of the "The Free Market" preached by the Economic ministers of the faith.
No more interpreting of illusion is necessary. It's now time for action!
Review my articles:
A Green Future for Our Nation
Benefits of Nationalized Oil Industry
Nationalize the Oil Companies
Economic Society
At--> http://structuraleconissues.blogspot.com
For a better understanding of what where facing.
It is now time to make certain that everyone understands the truth, solutions, and what will happen if we fail to act now.
Posted by: Ray Pairan Jr | 2008-05-22 11:29:33 AM
Oil companies DO invest in alternative energy projects - to the tune of over 25 billion dollars in the last 5 years. US gov't invested only something like 2.1 billion.
They also DO invest in new source research, but are massively handicapped as to where they can drill.
Oil companies are NOT the benefactors of high per-barrel costs. That money goes to the speculators and the oil field owners (the Saudies, etc)
Posted by: Richard | 2008-07-07 10:52:30 AM
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