Some oil company experts celebrate that the profits of gasoline companies demonstrate that not every company is suffering from the recession.
Those who have worked for companies like Exxon Mobile have enjoyed luxurious vacation packages to Hawaii, Bermuda, Caymen Islands, Paris, Tokyo, you name it. It's an amazing flow of money.
When asked if these profits are due to gasoline prices, they smile and say "don't be silly, it's just one of those coincidences, ya know?"
It's because oil suppliers, mostly the OPEC nations, are in a cartel that sets its own prices and are not subject to the natural market laws due to lack of competition. All of the OPEC nations have nationalized their oil production fields, therefor stifling competition and letting them sell oil at whatever price they want.
Not to mention the fact that, despite the vast increases in demands for oil, with the rise of China and India, oil production has remained essential flat. The nationalized companies are not investing in industry infrastructure, they are using profits to leverage government spending. Iran is buoyed almost exclusively by oil profits. They spend the profits on government programs like developing nuclear power or welfare programs but don't don't invest in new refineries or derricks. This is further compounded by corruption in places like Iraq, another country with nationalized oil, where corrupt government officials are funnelling profits into their pockets instead of investing back into the industry.
But what about the American oil companies? the problems facing the oil companies is that they are struggling under the weight of a vast government regulatory bureaucracy. Not a single new refinery has been built in the U.S in 30 years. There's too much red tape. So the oil companies are left with windfall profits and few places to invest in. That is also why the oil companies would rather put new new refineries (and the subsequent jobs that come with them) in foreign markets where there aren't so many draconian laws that prevent them from running their business. The effects of these laws also leaves the American oil infrastructure remarkably delicate, as we saw what happened when hurricane Katrina came to the shore.
So what do we do? Well when it comes to OPEC, there's not a whole lot we can do, short of military action. As we are seeing with Iran, U.N sanctions are usually paper tigers that do little to actually spur a nation to action. What we can do is as follows
A: build warmer relations with Russia, a major oil producer and a non-OPEC nation. Despite the fact that Russia's industry is nationalized, we can at least try to negotiate with them a bargain in a manner that couldn't be done with a nation that is the member of the OPEC cartel
B: Invest in Canada. The Canadian wilderness has more oil stores than the entire Middle East COMBINED. And because global warming is reduing permafrost in Canada, expect to see Canada become a global power in the coming decades as their oil production skyrockets. I betcha didn't know that there are very positive aspects to global warming, did you?
C: repeal draconian regulations that encourages oil companies to invest in their CEOs rather than invest in their infrastructure. That means repealing the feel good environmental laws that places a wilderness as having a higher value than the poor people of America who are struggling with high gas prices. That means letting America drill in the Alaskan wilderness, which has vast repositories of oil, like Canada. For every elk that doesn't have to live with a pipeline somewhere in its vast range, that's 10 American families that are being crunched with high gas prices. And I think a child's life is more important to me than an elk's comfort.
D: reduce our dependency on the OPEC cartel. The cartel may be sitting on its hands now, but when its top buyers begin going somewhere else, they will be forced to act if they want to keep their oil-buoyed governments alive. That means developing infrastructure to drive the cost of production down.
powered by Yahoo answers
March 13th, 2008 at 7:16 am
Bush needs the money for his retirement>
References :
March 13th, 2008 at 7:17 am
It's because oil suppliers, mostly the OPEC nations, are in a cartel that sets its own prices and are not subject to the natural market laws due to lack of competition. All of the OPEC nations have nationalized their oil production fields, therefor stifling competition and letting them sell oil at whatever price they want.
Not to mention the fact that, despite the vast increases in demands for oil, with the rise of China and India, oil production has remained essential flat. The nationalized companies are not investing in industry infrastructure, they are using profits to leverage government spending. Iran is buoyed almost exclusively by oil profits. They spend the profits on government programs like developing nuclear power or welfare programs but don't don't invest in new refineries or derricks. This is further compounded by corruption in places like Iraq, another country with nationalized oil, where corrupt government officials are funnelling profits into their pockets instead of investing back into the industry.
But what about the American oil companies? the problems facing the oil companies is that they are struggling under the weight of a vast government regulatory bureaucracy. Not a single new refinery has been built in the U.S in 30 years. There's too much red tape. So the oil companies are left with windfall profits and few places to invest in. That is also why the oil companies would rather put new new refineries (and the subsequent jobs that come with them) in foreign markets where there aren't so many draconian laws that prevent them from running their business. The effects of these laws also leaves the American oil infrastructure remarkably delicate, as we saw what happened when hurricane Katrina came to the shore.
So what do we do? Well when it comes to OPEC, there's not a whole lot we can do, short of military action. As we are seeing with Iran, U.N sanctions are usually paper tigers that do little to actually spur a nation to action. What we can do is as follows
A: build warmer relations with Russia, a major oil producer and a non-OPEC nation. Despite the fact that Russia's industry is nationalized, we can at least try to negotiate with them a bargain in a manner that couldn't be done with a nation that is the member of the OPEC cartel
B: Invest in Canada. The Canadian wilderness has more oil stores than the entire Middle East COMBINED. And because global warming is reduing permafrost in Canada, expect to see Canada become a global power in the coming decades as their oil production skyrockets. I betcha didn't know that there are very positive aspects to global warming, did you?
C: repeal draconian regulations that encourages oil companies to invest in their CEOs rather than invest in their infrastructure. That means repealing the feel good environmental laws that places a wilderness as having a higher value than the poor people of America who are struggling with high gas prices. That means letting America drill in the Alaskan wilderness, which has vast repositories of oil, like Canada. For every elk that doesn't have to live with a pipeline somewhere in its vast range, that's 10 American families that are being crunched with high gas prices. And I think a child's life is more important to me than an elk's comfort.
D: reduce our dependency on the OPEC cartel. The cartel may be sitting on its hands now, but when its top buyers begin going somewhere else, they will be forced to act if they want to keep their oil-buoyed governments alive. That means developing infrastructure to drive the cost of production down.
References :
March 13th, 2008 at 7:18 am
Because we haven't been able to drill for oil or build any more refineries…we are dependent on the world market price and OPEC, yes, ours have made a profit,,,as well as our enemies have….
I wonder how much profit they, OPEC, made?
Gasoline prices include a tax by our government.
I was just wondering if movie stars or athletes huge profits bother you, too?
References :
March 13th, 2008 at 7:18 am
this happens when we select oil men from texass to be our president. when will we learn
References :
March 13th, 2008 at 7:20 am
Bush and Cheney are both oil men………duh!
References :