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[bitmasher]

I think hauling oil exec's in front of the Senate Judiciary Committee was largely just for show. What possible purpose do statements like these have?

Quote: "You have to sense what you're doing to us - we're on the precipice here, about to fall into recession," said Sen. Richard Durbin, D-Ill. "Does it trouble any one of you - the costs you're imposing on families, on small businesses, on truckers?"

Its a classic example of reductionism. Reduce a complex problem to one scapegoat and score political points while lashing the goat with emotional rhetoric.

http://money.cnn.com/2008/05/2.....tm?cnn=yes

[csumerall]

Check out this clip its of maxine waters actually telling the truth about what she would like to see, although I think it was inadvertant. But none the less they would like to nationalize the oil companies. Which, If you dont mind even higher gas prices you can look foreward to that. If nothing else its good for a laugh.

http://www.stoptheaclu.com/arc.....companies/

[Tatertot45]

...maybe all the politicians should take a reduction in pay so we can route that money into Social Security. The elderly are having a tough go of it with so little SS money to live on. What do politicians do with all that "campaign money"? There is quite a bit there. Maybe they could share that with us common folk?

[expatriate]

Just posted on the Anything Goes forum -- the problem is China. Their oil imports went from 165.9 million barrels in 1996 to 1,064.6 million barrels ten years later. They're currently consuming 6.5 million barrels a day, which is as much as Germany, Russia, and India combined -- which makes China the world's #2 consumer of oil. This problem is accelerating as China's economy continues to expand at enormous rates, they industrialize more, and their middle class grows.

But the Democrats don't want to talk about China. They think everything negative in the world is America's fault, so obviously the problem is some sort of domestic greed -- whether it be oil companies or self-centered consumers with their evil SUVs.

The issue is supply, and the Democrats are doing everything they can to stop efforts to increase it. They just shot down a proposal to allow offshore oil exploration from 50 - 200 miles out, have opposed ANWR, consistently oppose new refineries, etc.

[bitmasher]

B-I-N-G-O. I think there are a couple other components to the equation as well.

- Lack of new refineries. Gas prices can soar even when oil prices are low, due to tight refinery capacity. The U.S. needs at least one, possibly more, new refineries badly. Particularly a refinery that can handle heavy, sour crude, which tends to be less expensive and there is more supply than WTI (light, sweet). As bad as gas prices are now, I dread to think what is going to happen in the Gulf Coast gets hit with a Hurricane this fall.... (a good portion of the U.S. refinery capacity is in the gulf states).

- India. China leads the day in growth but India is not too shabby. They are upwardly mobile and the government subsidies fuel prices to drive the economy.

- Speculative trading. I suspect that at least some portion of commodity market is being pushed up by hedge funds, the same ones that helped along the stock market and housing bubbles of recent/current memory.

- State Controlled Fields. Most new finds and the bulk of proven reserves are controlled by state entities who (despite saying otherwise) use oil as a political tool. Several of these states also lack the expertise to produce the fields effectively. Its not main stream news, but Big Oil has locked out of many of these fields. TNK-BP looks like its on the fritz too...

- Falling production is producing nations. Iraq, Nigeria, and Venezuela to a certain extent are volatile and their production wavers.

[Whelland]

Even with hauling the oil executives in and posturing for the press in front of all the camera's, I didn't see anyone mention the fact that only 4% of the total gas price is profit for the oil company supplying gasoline. Why didn't they discuss the 15% of the total gas price is tax. Why should the government make more money from a gallon of gasoline than the company that's responsible for drilling, refining and managing the logistics?

Maybe we are being gouged by the oil companies, but we're being gouged by the government as well.......and they're doing nothing to deserve the money received in the form of taxes.

[csumerall]

Whelland wrote: Maybe we are being gouged by the oil companies, but we're being gouged by the government as well.......and they're doing nothing to deserve the money received in the form of taxes.

This is one of the reasons I am very against this so called windfall tax. I can assure you that if it did happen it would not be good for all of us that are bitter clinging to religon and guns. In fact I would go as far to say that if the oil companies wanted to they could close up shop for a few days just to get their point across. As it stands right now the government just sees alot of money that they want and are just trying to find the justification to take it.

[JTapia]

Another point to consider is that the Big Oil companies own very little of the land that they Drill on, (less than 5% I believe but don't hold me to the coals on that one), All the Oil wells drilled off the coast of the US are on land(sea botton) leased from......you guessed it, the Government. Add that to the Taxes paid by the Oil transporters, the Refinery, the Distributor and finally the Gas Station where we buy it and it becomes apparent who is making all the money from a Gallon of Gasoline and Diesel.
Have no fear though, Obama will Tax them thar bad ole Oil Companies and lower that gallon of fuel cost.

[csumerall]

I am actually a driller by trade(or used to be anyways) but you would be suprised to find that most of the actual real esate that the oil companies own are either refineries or offices. The rest is leased, from the government or from private parties ect. I heard one liberal talk show host(ed shultz) talking about how the oil companies are holding leases on lots of land and not drilling on it. The important part he left out(theres always something) is the fact that you can own the property or lease it, have the rigs but it doesnt do anything if you cant get the proper permiting from..............you guessed it the government. Which in turn has to listen to all the animal rights groups, sierra club, and everyone else. But a lot of leftists and the media would have you to believe that its all big oils corprate greed.

[expatriate]

And then there's the Hugo Chavez solution posed by the Democrats -- nationalize the refineries. :o

http://www.foxnews.com/urgent_.....2008-06-18

[csumerall]

There we go then we can redirect worthless legislation costs like a $40 billion farm bills toward oil and then they can use the same business model they used for medicare and social security. Yes if you would like to see mismangement and costly mistakes definately nationalize the oil industry. But for all of you out there who are a little left leaning.............you would be seeing alot more of haliburton. If you think they are making money in Iraq you should see what they actually make out in the oil fields. If you want to see gas costing $7 a gallon go for it. Open markets and competition is what drives down costs. Costs are higher now due to most of the oil companies merging in the last 10 years.

[WesternHunter]

I think it is mostly greed!! We can critisize the liberals all we want and make fun of Sierra club and any other environmental group. Guess what, when hunters hear of an initative for wetlands or wilderness area to be drilled, developed or logged, we are the first to protest it, aren't we? We can't riducule sierra club without casting the same blame on DU or RMEF. Not sure how one distiguishes between an environmental group and a conservation group? I will admit that both these groups are somewhat to blame as well, but then again we want open wilderness to hunt. We can't have it both ways.

Every day I hear or read all kinds of various excuses as to why the cost of petrol keeps going up. If crude oil is so pricey then why has the cost of convensional motor oil not risen dramatically over the last 5 years?? If a barrel of crude cost so much, then why have the cost of plastics not risen dramatically, regardless of recycling?? Ever price some topical treatments that are derived from petroleum (vasaline, ointments, etc.)?? I haven't seen a huge increase in cost for that stuff. Why is a gallon of gas in Iraq only .59 to .79 cents??????

I've always done all my own oil changes and lube jobs on all our vehicles and have not seen any huge increase in these petroleum products lately. Yet they keep saying that crude oil prices are rising. Sure they are!

If you ask me these corporate leaders are crapping in their own backyard by doing this to the consumer. It will result in the petroeum companies being driven into the ground. We have worried about gas costs for decaded, but never did anything about it. People are now really fed up. I think there is a real enough drive out there to ween ourselves off of petroleum and find an alternative fuel source. 10 to 15 years from now all those corporate execs should start to feel the hurt when that happens. Griping and complaining does nothing. Make those corporations feel even a 30% loss and they will bring prices down, but by then no one may even care.

I don't want to give the impression that I don't believe in capitalism. I do very much so. I think that corporations should be able to profit as much as the market will bare, but we are now getting past that limit. It is having a real effect on the economy.

[Whelland]

Westernhunter,

I agree with most of what you said with a couple of exceptions. I am in the plastic and paint business and prices have gone up considerably. It has actually caused the company I work for many problems with our automotive customer. I won't mention the name specifically, but our customer refuses to give us any relief.

We went to the customer (American car company) and showed them exactly what our cost increases have been for paint, plastic resins, solvents and transportation. We were told, "Too bad! Learn to manage your suppliers." This is a big reason why you see so many comanies going out of business.

The problem here is that the OEM needs to find a new supplier after the old one goes bankrupt and normally ends up spending more in piece price on top of the cost to move the business. They would have been better off giving the increase to the now bankrupt company.

The same company mentioned above did allow us to develop a new supplier for raw plastic, which had a lower price per pound. It took a year once we got started, all testing was at our cost and we lost $20,000.00 a month for about 16 months. Our business partner also lost $20,000.00 a month during that same time frame. We had to let some good people go throughout the development process, but the customer did not care. Once we got the new source developed, they gave our competitors their contact information and forced them to use them. Of course, we had already completed all of the testing (another $50,000.00) for our competitors. What took us a year to get approved, took our competitors 6 weeks.

We also have a customer. We'll just say their corporate office isn't in the U.S. but they have factories here. They look at your books along with invoices and allow the price increase if necessary. When you find a new supplier, they help with development costs and do not ask for unreasonable testing requirements.

I also hope this will help to shed some light on some of the problems we are dealing with today in corporate America......at least in the auto industry.

My apologies for changing the subject half way through.

[csumerall]

you are comparing 2 different things as my understanding goes, motor oil and diff fluids are made with heavy dark crude but fuel is made with light sweet crude. I also understand there is research going on right now on how to refine heavy dark into fuels but it takes more refining there in lies your problem a portion of your large fuel costs goes to the refining process.

[JTapia]

WesternHunter wrote: I think that corporations should be able to profit as much as the market will bare, but we are now getting past that limit. It is having a real effect on the economy.


This would be true if Oil were something we could do without. Supply and demand simply wont work with a product that is as vital to us as oil until some sort of alternative can be found as you said.
As to your other points, We were discussing those very same thoughts 2 days ago at work. Why is everything made from petroleum not skyrocketing in price as gasoline and diesel has?
The answers we came up with are the same as csumeralls'.

I still don't believe that it is Big Oil Companies that are driving the fuel cost up so high, at least not by themselves, or their profits would be insanely high. At 8% profit that's in line with other large corporations. I understand that the $ amounts are high but consider that 8% when oil was $20 a barrel, that would be $1.60 a barrel profit, now compare to $ 100 a barrel and that 8% jumps to $8.00 profit, a $6.40 jump but still only 8%. Times that by billions of barrels of oil and the record earnings now get a little less fuzzy.
Now I am not saying that Big Oil is all cuddly by no means. Just look at what happened after Hurricane Katrina. They were certainly taking advantage of the situation then.