Senate Questions Oil Execs

[mrhaskellok]

quote:Originally posted by dggriffi

Its clear that the oil companies are price fixing which is the real problem.   Since there are really only three,  it makes it easy for them to price signal.   This should be clear from the massive profit increases they have seen.  An increase in oil price does NOT result in an increase in profits unless they raise their margins.


Free market is the greatest thing in the world but it breaks down when monopolization begins.

You are right, but increased consumption DOES drive up profits....if you make 8% on a widget, and I buy twice as many widgets this year than last, your profits are going to double.   I don't get the problem with profits rising as their product sales ries faster than ever before.  

Since someone already mentioned the consitution and rights, where does it say we have the right to cheap gasoline?  

My solution is to simply use less, much less.   If we would just do this, prices would come back down...why?   Because everyone, including EXXOn likes their profits and they are going to always want our business.

It is no different than McDonalds charging 12 times their cost for soda.  Thirsty, didn't bring a drink from home?  Ha, they got ya.  Don't see congress screaming about that.   Oh yeah, gasonline is a national security issue.  
Lol, yeah I forgot that we will all get attacked by the cubans if we all have to start taking the train.  And after all, once gasoline hit $5 in Europe, everyone went to war.

Please, let the market work a little.  I hope the price of gas DOES go to 10 bucks.  Then I will be quite confident I won't be using gasoline for much anymore.  That will really stick it to the man!

[custosnox]

your using a double the sell, double the profit point of view here, which, in gereneral, would make since.  However, this just does not add up.  In the past few years, the price of gas has doubled (can't quote an actual timeline here, because I honestly don't remember when gas was $1.85, but it wasn't that long ago), but the use of gas has not doubled in this time period.  Not only that, but your increased profit by increased use still doesn't hold water because it's not just by the increased sales that they are seeing profit, but by increased margins.  In fact, in the past year, I would say that the use of gas, at least in the U.S., has decreased.  With the production of vehicles with better gas milage, alternative fuels, and a change of driving habits (everyone is trying to find some way to save money with the cost of gas rising), it stands to reason that fuel consumption is down.

As far as the national security issue, I don't recall hearing that before, however, it is a national economical concern, which can translate into security, in a round about way.  We are a petroleum dependant country.  Just about everything we do is connected to fuel in some aspect.  When the price of fuel rises like it has, the impact goes through every industry.  When the economy weakens, the country weakens in a whole.  So before you start pandering to the monopoly that these three oil giants have on the market, think a little further then how much it's going to cost to go to work every morning.

[we vs us]

As a matter of fact, year on year, Americans are driving much, much less.  

quote:  . . . Compared with March a year earlier, Americans drove an estimated 4.3 percent less -- that's 11 billion fewer miles, the DOT's Federal Highway Administration said Monday, calling it "the sharpest yearly drop for any month in FHWA history." Records have been kept since 1942.

[mrhaskellok]

1. I am not pandering to anyone...my logical argument is just the world as I see it.  []Why do people on this forum automatically assume some evil motive when someone disagrees with you?  What is wrong with government education these days, did you not learn to just have a conversation?  It is like everyone is that bully who likes to ask what's on your shirt and then flick you in the nose when you look down.   You don't have to make senseless pokes at me to interest me in a conversation.

2. I spend $400 a month on fuel, I am very aware of the impact of high fuel prices.  

3. It doesn't actually work that way...the "double consumption, double the price" isn't what I am implying.  Oil companies have always tried to run their operations at "peak" performance.  That may be a refinery at 85% capacity, for example.   If that refinery is caught needing to refine at a much faster rate, say at 100%, the cost of that increased production is more than an increase of costs of 15%.  There are also TONS of other factors here, cost of steel, drilling costs, the need to drill to keep up with future demands, higher HR costs, and more.  

4. By monopoly, you are implying that there is some "control" they are exhorting on you to purchase their over-priced products.  Again, there are many companies who are the major leading producers in their markets, and there is nothing wrong with that.   In this case though, there are several large oil companies...which mean that they all want your business and are willing to "try" for it.  If everyone starts to take the bus, or bike to work, don't you think prices will come back down?

5. Saying that we are a nation that should have cheaper fuel because we are dependent on oil is like saying that people in California should have cheap electricity because they live where it is hot.  Poor, poor logic.  Thankfully we still live in a nation that gives us choices...the Prius is a good one I hear.  I personally and ordering a Smart car...they are cheaper to drive and will provide a great advertising opportunity.  Everyone can't go buy a fuel efficient car?  Sure glad that bus rates are reasonable.  Don't live near the bus lines and can't get into a more efficient car?  Move or carpool.   I had my staff in one of our stores looking at the bus routes online for Tulsa.  One of them realized that she could walk a half of a mile to the bus stop and get on a bus all the way to work.  She was thrilled.  

5.  Why should I impose a cost threshold on a commodity because I want to work 30 miles from work?  So as long as I don't "notice" the cost of my commute we shouldn't care how much they are profiting?  That is exactly what you are saying.  Suddenly we as a nation are waking up to our terrible habits because it is starting to cost more and we, like we are very good at, want to blame someone.  We are a creative nation, I believe we can address any problem, once we stop crying about it.  

Case and point, you make choices and you live with the consequences...if you are like me and didn't sock money away for high fuel prices, you are going to be forced to do what you can.  You should also call your elected officials in DC and ask them why they choose to regulate the industry so much too.  Why can't we drill off the same shores China is drilling in (south of Florida)?  Don't you think we would do a better job than China in our waters?  

[cannon_fodder]

Good post Mr. Haskell.

To add to that just a touch:

The oil industry is not a monopoly, not even an oligopoly. Here is the short list of worlds largest oil producers in order of production:

Saudi Arabian Oil Co.
Petroleos Mexicanos
Petroleos de Venezuela
China National Petroleum
BP Amoco + Arco
ExxonMobil
Iranian National
Royal Dutch/Shell
Nigerian National Oil Co.
Iraq National Oil Co.
Kuwait Petroleum
Chevron + Texaco

Other major players (the list was from 1999):
Lukoil
Gazprom
ConoccoPhillips
Occidental Petroleum
Devon Energy Corporation
Qatar General Petroleum Corporation
Nigerian Petroleum
(insert every country with oil petroleum, including Mexico, Venezuela, Brazil and Canada)

That is far too many companies to qualify as any sort of collusive entity.  Certainly they want to mess with supply and demand to maximize profits - but with that many players it seems unlikely that they would have the global effect of doubling oil prices.  Collusion of a commodity has never worked that well before, the urge to cheat to make MORE money is overwhelming.

[custosnox]

quote:Originally posted by mrhaskellok

1. I am not pandering to anyone...my logical argument is just the world as I see it.  []Why do people on this forum automatically assume some evil motive when someone disagrees with you?  What is wrong with government education these days, did you not learn to just have a conversation?  It is like everyone is that bully who likes to ask what's on your shirt and then flick you in the nose when you look down.   You don't have to make senseless pokes at me to interest me in a conversation.

2. I spend $400 a month on fuel, I am very aware of the impact of high fuel prices.  

3. It doesn't actually work that way...the "double consumption, double the price" isn't what I am implying.  Oil companies have always tried to run their operations at "peak" performance.  That may be a refinery at 85% capacity, for example.   If that refinery is caught needing to refine at a much faster rate, say at 100%, the cost of that increased production is more than an increase of costs of 15%.  There are also TONS of other factors here, cost of steel, drilling costs, the need to drill to keep up with future demands, higher HR costs, and more.  

4. By monopoly, you are implying that there is some "control" they are exhorting on you to purchase their over-priced products.  Again, there are many companies who are the major leading producers in their markets, and there is nothing wrong with that.   In this case though, there are several large oil companies...which mean that they all want your business and are willing to "try" for it.  If everyone starts to take the bus, or bike to work, don't you think prices will come back down?

5. Saying that we are a nation that should have cheaper fuel because we are dependent on oil is like saying that people in California should have cheap electricity because they live where it is hot.  Poor, poor logic.  Thankfully we still live in a nation that gives us choices...the Prius is a good one I hear.  I personally and ordering a Smart car...they are cheaper to drive and will provide a great advertising opportunity.  Everyone can't go buy a fuel efficient car?  Sure glad that bus rates are reasonable.  Don't live near the bus lines and can't get into a more efficient car?  Move or carpool.   I had my staff in one of our stores looking at the bus routes online for Tulsa.  One of them realized that she could walk a half of a mile to the bus stop and get on a bus all the way to work.  She was thrilled.  

5.  Why should I impose a cost threshold on a commodity because I want to work 30 miles from work?  So as long as I don't "notice" the cost of my commute we shouldn't care how much they are profiting?  That is exactly what you are saying.  Suddenly we as a nation are waking up to our terrible habits because it is starting to cost more and we, like we are very good at, want to blame someone.  We are a creative nation, I believe we can address any problem, once we stop crying about it.  

Case and point, you make choices and you live with the consequences...if you are like me and didn't sock money away for high fuel prices, you are going to be forced to do what you can.  You should also call your elected officials in DC and ask them why they choose to regulate the industry so much too.  Why can't we drill off the same shores China is drilling in (south of Florida)?  Don't you think we would do a better job than China in our waters?  

1. I didn't accuse you of pandering, if someone else did, sorry, I don't remember the post, and don't have the time right now to reread them to find it.  I understand you want this to be looked at from all sides (as I try to do), and applaud you for trying to put this view out.

2. At this point, I would be surprised if someone wasn't aware of the high prices.

3. I'm not going to claim to understand oilconimics (really should take the time to really look into it though), but the way you had put it out there, or at least the way I understood it, you were saying that the costs were increasing in tandum with the use.  Well, that still doesn't really sound like what it seemed like you were saying to me.  And I get that a higher production rate means a higher cost, however, I think the rise in cost goes beyond this increase.

4. Once again, I'll use the ignorant defence.  As I said, my oilconomics are bad.  It has seemed to me that there are three major oil companies that are in play here.  I understand that there are a lot of companies out there, but it seems that when anything comes about, these three area always right there in the front line of fire, making it seem that they set the standard for the industry, hence my assertion of a monopoly.  Personally though, I blame OPEC more then the oil companies, but I still think that the companies play a part, but this is, of course, only my opinion, not backed up with any real data.

5. I'm not saying that because we are a oil dependant nation that we should have cheaper oil, just that when the cost rises, the impact is wide reaching.  Because of this, I think that we should do what we can to keep big oil from taking advantage of our dependancy, and make sure that they don't make an excessive profit at the sake of our economy.  I don't have any arguments against them making a profit, just that there should be a balance there.  Keep in mind, also, that there are a lot of people out there (myself included) that can't afford to get a more efficiant vehicle, though I plan on getting a motorcycle as soon as it becomes possible for me, but been planning that for years.  And for us, we don't get much of a choice of where we want to work.  I despise my job, but keep working it because I can't afford to go elswhere.  Which also means that carpooling and public transportation are out for me as well due to location and work schedule.  Those that can take these routes have a good advantage that they should take.

5 (again?).  I agree, we should do something about it instead of sitting around b****ing about it.  However, most of us are a bit limited in our choices of what to do.  Those that can, save costs where they can.  Lowering the use should, in time, lower the costs. Personally, I only used 1/4 a tank of gas in the past week by cutting out as much driving as I can, and driving smarter when I do.  

as voters, whe have chosen officials to representatives to act in our interests in these matters.  The downside of this is, once they are in they can do pretty much what they want.  While they will try and appease the voters to get re-elected in the next term, ultimatly, it comes down to what they want to do.  While contacting our officials can have the effect of making them more aware of what we, as voters, want, and they can act accordingly. On this issue, I can't think that they don't know what we want.  So they are limited either by their own personal powers, or personal agendas.  In either case, I don't see much changing anytime soon, though I would be jumping with glee if they did.  We do need to open up more area's for drilling, but we also need to be aware of the possible enviromental impact of doing so.  While some of these area's are closed for what seems no other reason then political gain, others are closed for a good reason.  This is an area that needs to be gone over by our government, and revisted to discover reasoning and to open up more options.