More Record Oil Co. Profits Reported...Surprise!

[gblowfish]

http://tinyurl.com/82y97

[banyon]

I'm sure that Condoleeza Rice's former job on their board of directors is merely coincidental. :hmmm:

[Bowser]

I'm sure that Condoleeza Rice's former job on their board of directors is merely coincidental. :hmmm:

She's taking the Dick Cheney road to success.

[Donger]

Again, I'm amazed that people are surprised by this.

The price of crude is NOT set by the oil companies.

[banyon]

Again, I'm amazed that people are surprised by this.

The price of crude is NOT set by the oil companies.

Right. So if their costs were so much higher, then then why are their profit margins so abnormally large?

Last time I checked, profits = Total revenues-Total costs. If their costs are higher, normally, that would offset the increased revenue from higher prices. Here it didn't. Instead, they show record profits. Not record revenues, which would make sense. They are dealing in an inelastic good. One in which demand remains relatively constant. Under a normal government which wasn't comprised of former energy executives, this situation would be addressed and regulated to control the price fixing/gouging. It's pretty clear this situation doesn't worry W & the Gang too much.

As the end seller, they do set the wholesale price of refined gasoline.

Here's an example of thier ability to set prices based on Katrina.

The letter cited a study by University of Wisconsin economist Don Nichols that found the hurricane was not entirely to blame for high gas prices.

Historically, Nichols said, the markup between the price of a gallon of crude and a gallon of gasoline is about 85 to 90 cents a gallon, including refining, distribution and taxes.

The study estimated that for pump prices to reach $3 a gallon, the price of crude oil would have to be about $95 a barrel, but crude prices have been holding around $65 a barrel, and Katrina has not caused a surge in crude oil prices.
"The disconnect between gasoline and crude oil prices is quite remarkable," Nichols said.

http://www.cbsnews.com/stories/2005/09/21/katrina/main870784.shtml

[sd4chiefs]

I have some good news.


My energy stocks are kicking ass. :)

[Donger]

Right. So if their costs were so much higher, then then why are their profit margins so abnormally large?

Last time I checked, profits = Total revenues-Total costs. If their costs are higher, normally, that would offset the increased revenue from higher prices. Here it didn't. Instead, they show record profits. Not record revenues, which would make sense. They are dealing in an inelastic good. One in which demand remains relatively constant. Under a normal government which wasn't comprised of former energy executives, this situation would be addressed and regulated to control the price fixing/gouging. It's pretty clear this situation doesn't worry W & the Gang too much.

As the end seller, they do set the wholesale price of refined gasoline.

Ranked by profit margin -- profits compared with revenues -- oil companies such as Chevron are not particularly stellar. Internet companies are twice as profitable.

And, as you may know, price regualtion was tried in the 1970s. The result were unpleasant.

[Donger]

[QUOTE=banyon]Right. So if their costs were so much higher, then then why are their profit margins so abnormally large?

Last time I checked, profits = Total revenues-Total costs. If their costs are higher, normally, that would offset the increased revenue from higher prices. Here it didn't. Instead, they show record profits. Not record revenues, which would make sense. They are dealing in an inelastic good. One in which demand remains relatively constant. Under a normal government which wasn't comprised of former energy executives, this situation would be addressed and regulated to control the price fixing/gouging. It's pretty clear this situation doesn't worry W & the Gang too much.

As the end seller, they do set the wholesale price of refined gasoline.

Here's an example of thier ability to set prices based on Katrina.

Yes., based on what the market price of crude is. Presently, over 40% of the price you pay for gasoline is crude costs.

Their production/refining costs remain the same.

I'm not going to go over all this again. I've done it so many times that its boring.

[banyon]

Ranked by profit margin -- profits compared with revenues -- oil companies such as Chevron are not particularly stellar. Internet companies are twice as profitable.

Looks like that's changing. Of course when profits are compared with revenues Oil companies don't come out as well. That's because they are worth so much more. When profits are compared with revenues, my nephew's lemonade stand is ten times as profitable as those internet companies, but so what? Even though that is in the article, it's a red herring. The real story here is that Chevron made a LOT of $ purely in profit. Now what are they going to do with that $? Reinvest it, gain market share, distribute it to shareholders, put it in offshore accounts, overpay their executives? My bet is on the last two if history is any kind of guide.

And, as you may know, price regualtion was tried in the 1970s. The result were unpleasant.

There is a difference between extreme regulation, like the price fixing and rationing of the 70's, and no regulation, like how Standard Oil was allowed to operate in 1890. You're arguing from the extreme position. I'm advocating curbing price gouging, which is not the same as price fixing. Saying that there can be no regulation is giving energy conglomerates an undeserved free rein, that they will most assuredly abuse.

[Donger]

Now what are they going to do with that $? Reinvest it, gain market share, distribute it to shareholders, put it in offshore accounts, overpay their executives? My bet is on the last two if history is any kind of guide.

Wow. You may want to take a look the history a little closer. You could start withthe article linked above:

Chevron and other oil companies also are emphasizing that they plan to spend substantially more during 2006 on the exploration for more oil.

There is a difference between extreme regulation, like the price fixing and rationing of the 70's, and no regulation, like how Standard Oil was allowed to operate in 1890. You're arguing from the extreme position. I'm advocating curbing price gouging, which is not the same as price fixing. Saying that there can be no regulation is giving energy conglomerates an undeserved free rein, that they will most assuredly abuse.

If you have some evidence of gouging, provide it. The FTC would love to review the evidence.

[banyon]

Wow. You may want to take a look the history a little closer. You could start withthe article linked above:
Chevron and other oil companies also are emphasizing that they plan to spend substantially more during 2006 on the exploration for more oil.
you're pretty trusting of oil execs. "Substantially more" could mean anything. I think if they invested $4 billion, that sounds like a lot, but they'd still get to pocket $10 billion profit, which would still represent the second highest profit margin after last quarter's Exxon profit. Considering that oil becomes more and more scarce, you will always have to spend more on exploration because we have already gotten the oil that is "easy" to get. New oil will be deeper and in less hospitable climates and terrain. The real point here is not to cowtow to the already immensely wealthy oil execs, but to stop this insane cycle of enriching these people and move on to energy independence. Then we won't be held hostage by oil conglomerates or Middle Eastern despots.


If you have some evidence of gouging, provide it. The FTC would love to review the evidence.
I guess you could start with the article linked above as well:
"I call on the Bush administration and the Federal Trade Commission to put an end to this price gouging," Boxer said. "You'd think FTC stood for 'Friend to Chevron' with the way they sit back and let these companies gouge consumers."

Bush's FTC isn't really interested in helping consumers. Check this out:

Bush has ChevronTexaco lawyer head fed's oil price gouging probe

Good news: Democratic governors have embarrassed the federal government into acknowledging the oil price gouging issue, as the Federal Trade Commission (FTC) today announced a formal probe. Bad news: President Bush made sure to preempt any real investigation into price gouging by his financial backers in the oil/gas industry when last year he appointed a former ChevronTexaco lawyer, Deborah Majoras, to head the FTC.
Some would argue that any investigation - no matter how rigged - is better than no investigation. But, then, I'm not so sure, especially when we inevitably see in a few weeks an oil-industry-written FTC report that gives a government stamp of approval to oil industry profiteering. Undoubtedly, that's in the Bush administration's calculation: the White House's use of the FTC (instead of an independent commission) to be the government's one and only public face in dealing with this issue clearly has something to do with that agency being headed by an oil industry crony.

http://www.workingforchange.com/blog/index.cfm?mode=entry&entry=7A079CED-A552-6200-CF4C39A76CD5A5E4

Okay, so Chevron, Condaleeza, now this woman. Are you starting to see a pattern?

[mlyonsd]

I guess you could start with the article linked above as well:


"I call on the Bush administration and the Federal Trade Commission to put an end to this price gouging," Boxer said. "You'd think FTC stood for 'Friend to Chevron' with the way they sit back and let these companies gouge consumers."



Well heck, if you have Barbara Boxer backing up your position Donger doesn't stand a chance.

[Donger]

you're pretty trusting of oil execs. "Substantially more" could mean anything. I think if they invested $4 billion, that sounds like a lot, but they'd still get to pocket $10 billion profit, which would still represent the second highest profit margin after last quarter's Exxon profit. Considering that oil becomes more and more scarce, you will always have to spend more on exploration because we have already gotten the oil that is "easy" to get. New oil will be deeper and in less hospitable climates and terrain. The real point here is not to cowtow to the already immensely wealthy oil execs, but to stop this insane cycle of enriching these people and move on to energy independence. Then we won't be held hostage by oil conglomerates or Middle Eastern despots.

And yet, Congress still won't allow drilling in ANWR.

I guess you could start with the article linked above as well:


Bush's FTC isn't really interested in helping consumers. Check this out:

http://www.workingforchange.com/blog/index.cfm?mode=entry&entry=7A079CED-A552-6200-CF4C39A76CD5A5E4

Okay, so Chevron, Condaleeza, now this woman. Are you starting to see a pattern?

ROFL

Sen. Boxer and workingforchange.com? Perhaps some better sources would be in order? If there were proof, the FTC wouldbe all over it.

[patteeu]

More price gouging demagoguery? :rolleyes:

If Americans want alternative energy sources and less dependance on foreign oil, we'd better get used to higher energy prices and we'd better not punish the energy companies for trying to get a reasonable return on their investment.

[banyon]

And yet, Congress still won't allow drilling in ANWR.
Sen. Boxer and workingforchange.com? Perhaps some better sources would be in order? If there were proof, the FTC wouldbe all over it.

I'm not trying to sound snippy here, but it's pretty clear that you've run out of arguments, and you're willing to pay whatever the oil companies tell you to pay and not ask questions. It's telling how your posts are less and less about the facts of the situation or economics.

Don't like the link? OK. It doesn't change the facts. Here's the same story in the Congressional newspaper. http://www.thehill.com/news/072104/ftc.aspx There are any number of places to read about oil and price gouging.

Here's the fox News story. http://www.foxnews.com/story/0,2933,168272,00.html

Yeah, just like everything else with the Bush Administration. Hey, c'mon, trust the FTC. We appointed just the right person to head that investigation. If there was a problem, we'd be all over it. trust us.

http://photos1.blogger.com/blogger/2516/1627/320/600_6003%20%28Medium%29.jpg

[banyon]

More price gouging demagoguery? :rolleyes:

If Americans want alternative energy sources and less dependance on foreign oil, we'd better get used to higher energy prices and we'd better not punish the energy companies for trying to get a reasonable return on their investment.

I'm not against a reasonable return. I'm against an unreasonable return. Energy taxes to help develop alternative sources are fine. But windfall profits to Nineteenth century-esque robber barrons aren't.

[patteeu]

you're pretty trusting of oil execs. "Substantially more" could mean anything. I think if they invested $4 billion, that sounds like a lot, but they'd still get to pocket $10 billion profit, which would still represent the second highest profit margin after last quarter's Exxon profit. Considering that oil becomes more and more scarce, you will always have to spend more on exploration because we have already gotten the oil that is "easy" to get. New oil will be deeper and in less hospitable climates and terrain. The real point here is not to cowtow to the already immensely wealthy oil execs, but to stop this insane cycle of enriching these people and move on to energy independence. Then we won't be held hostage by oil conglomerates or Middle Eastern despots.

I think you are misusing the term "profit margin." Either that or "second highest" must refer to a small time window or some other narrow focus.



I guess you could start with the article linked above as well:


Bush's FTC isn't really interested in helping consumers. Check this out:



http://www.workingforchange.com/blog/index.cfm?mode=entry&entry=7A079CED-A552-6200-CF4C39A76CD5A5E4

Okay, so Chevron, Condaleeza, now this woman. Are you starting to see a pattern?

Barbara Boxer claiming that there is price gouging isn't the same as evidence of price gouging.

Appointing an oil industry expert to investigate an oil industry issue seems to be a reasonable approach to me. Can we trust former prosecutors to behave honorably when they become defense attorneys (as so many of them do)?

Starting the investigation without any credible claims of wrongdoing seems to be a little more questionable though.

[patteeu]

I'm not against a reasonable return. I'm against an unreasonable return. Energy taxes to help develop alternative sources are fine. But windfall profits to Nineteenth century-esque robber barrons aren't.

What is unreasonable about Chevron's profit? As Donger has pointed out, their profit margins are reasonable compared to both the domestic oil industry and, perhaps more importantly from your POV, to other US industries.

[patteeu]

High prices are not evidence of any rational concept of price gouging (although I'd bet that there are some pretty irrational price gouging statutes in some jurisdictions). Nonetheless, I haven't heard about any real evidence of improper pricing on the part of Chevron.

[banyon]

What is unreasonable about Chevron's profit? As Donger has pointed out, their profit margins are reasonable compared to both the domestic oil industry and, perhaps more importantly from your POV, to other US industries.

when did he point that out? What would be an unreasonable rate of return for you guys?

[banyon]

Appointing an oil industry expert to investigate an oil industry issue seems to be a reasonable approach to me. Can we trust former prosecutors to behave honorably when they become defense attorneys (as so many of them do)?

I dont think it had to be someone who was employed by Chevron to investigate Chevron. Should've been a career corporate regulaltory lawyer.

[penchief]

As someone with experience in business management I can state that there is a clear difference between profit and profit margin.

However, I also recognize profiteering when I see it. I have been railing against the annual record profits of the oil industry for the last three or four years.

Anyone with eyes, ears, and a thought process can clearly see that something is fishy. It is my opinion that those who continue to defend the oil industry are either employees, stockholders, or unwilling to admit the existence of Cheneyburton.

[Donger]

I'm not trying to sound snippy here, but it's pretty clear that you've run out of arguments, and you're willing to pay whatever the oil companies tell you to pay and not ask questions. It's telling how your posts are less and less about the facts of the situation or economics.

Don't like the link? OK. It doesn't change the facts. Here's the same story in the Congressional newspaper. http://www.thehill.com/news/072104/ftc.aspx There are any number of places to read about oil and price gouging.

Here's the fox News story. http://www.foxnews.com/story/0,2933,168272,00.html

Yeah, just like everything else with the Bush Administration. Hey, c'mon, trust the FTC. We appointed just the right person to head that investigation. If there was a problem, we'd be all over it. trust us.

http://photos1.blogger.com/blogger/2516/1627/320/600_6003%20%28Medium%29.jpg

Yes, I'm a shill for big oil.

http://www.conocophillips.com/newsroom/other_resources/energyanswers/oil_profits.htm

If you can find anything misleading or incorrect in the above, let me know and we'll discuss. Sans that, I'm not going to go over what I've gone over with other people here time and again.

[Donger]

when did he point that out? What would be an unreasonable rate of return for you guys?

IIRC, it's right around 8%

[Donger]

And, for those not willing to clicka dalinka:

Why are oil company profits so large?

Profit 5 Year Average Profits of major oil companies reached $43.3 billion in the first half of 2005, some 42 percent higher than in the same period last year. The big percentage increase helped support the impression that oil profits are excessive, but business analysts stress that other measures should be considered in assessing a company's or industry's profit picture. Business Week magazine, for example, regularly monitors the profitability of various companies and industries by comparing their profit margins. To determine profit margin, the magazine divides net income by total revenue. In the case of oil and gas companies, total sales consist of the money they receive from selling their products, as well as revenue received from any other sources. Net income is the money left over after all costs and taxes are paid.

Over the long haul oil profits generally remain below or on a par with those of other major industries. As the chart indicates, the Business Week analysis of the data from the five-year period July 2000- July 2005, shows that the profitability of oil and natural gas companies (5.7 cents per dollar of sales)2 has been just slightly above the profitability of all industries combined (5.5 cents per dollar of sales).

[banyon]

Yes, I'm a shill for big oil.

http://www.conocophillips.com/newsroom/other_resources/energyanswers/oil_profits.htm

Didn't say you were a shill. I said you were content to not ask questions and take their word for it. You got onto me for quoting Barbara Boxer, and then you quote a report directly from an oil corporation. So let me get this straight. ConocoPhillips report says that ConocoPhillips is not gouging consumers? Really? Phillip Morris reports probably still say that cigarettes don't cause cancer as well. I read that article, it seems fairly general and outdated.

Over the long haul oil profits generally remain below or on a par with those of other major industries. As the chart indicates, the Business Week analysis of the data from the five-year period July 2000- July 2005 I don't doubt that from 2000-2005 the results are comparable. The gouging began after that. None of this literature mentions how these companies are also subsidized by tax dollars, which seems contradictory to the "let the market work" philosophy.

Here's a different take:

Profit as a percentage of sales varies widely by industry. Across all industries, however, the measure that companies use to decide where and when to invest is return on equity. And by that measure, integrated oil companies ranked among the top performers on the Fortune 500 last year, at an average of 23.9 percent. This year, the industry's return on equity is almost certain to top 30 percent.

Oil executives say they are using their profits to increase investment in new drilling and refining capacity to ease the shortage and return prices to more reasonable levels.

For all their talk about reinvesting profits, the big oil companies are on track to spend more of their $90 billion in free cash buying back stock and paying dividends. And for the fifth year in a row, they will draw down more from their known reserves of oil and gas than they will add.
http://www.washingtonpost.com/wp-dyn/content/article/2005/10/29/AR2005102900126.html

Now why was I skeptical that they would put all of that into exploration again. :hmmm:

[Donger]

Didn't say you were a shill. I said you were content to not ask questions and take their word for it. You got onto me for quoting Barbara Boxer, and then you quote a report directly from an oil corporation. So let me get this straight. ConocoPhillips report says that ConocoPhillips is not gouging consumers? Really? Phillip Morris reports probably still say that cigarettes don't cause cancer as well. I read that article, it seems fairly general and outdated.

I don't doubt that from 2000-2005 the results are comparable. The gouging began after that. None of this literature mentions how these companies are also subsidized by tax dollars, which seems contradictory to the "let the market work" philosophy.

Here's a different take:


http://www.washingtonpost.com/wp-dyn/content/article/2005/10/29/AR2005102900126.html

Now why was I skeptical that they would put all of that into exploration again. :hmmm:

Although Senate Majority Leader Bill Frist (R-Tenn.) warned the companies that they would be held to account if they were caught gouging consumers, there is little or no evidence that they have. And why should they? The normal dynamics of a market characterized by too little supply, and too much demand, increases profit margins naturally. Whether or not that's a "windfall" -- as Democrats claimed it was -- is a matter of politics and semantics, not economics.

I'm not arguing the profits. I'm arguing your (and Sen Boxer's) assertion that gouging is taking place. If it is, expose it. I'll be right behind you.

If you can't, perhaps you and the good senator should be quiet until you have evidence.

[Donger]

Now why was I skeptical that they would put all of that into exploration again. :hmmm:

Why would a company want to explore and drill in places like ANWR when the f*cking government prohibits them from doing so?

They are in business to make money, not unlike any other business. Are there other companies/industries out there that you feel so strongly against making huge profit? Or, is it just oil companies?

['Hamas' Jenkins]

Why would a company want to explore and drill in places like ANWR when the f*cking government prohibits them from doing so?

They are in business to make money, not unlike any other business. Are there other companies/industries out there that you feel so strongly against making huge profit? Or, is it just oil companies?

Considering that you could save more fuel by raising emission standards by 10% than what is in all of the ANWR, that is a pointless statement. There is also other good reason for you not to want to drill in the ANWR-- the environmental impact on many species who use that area as their breeding ground.

Companies are designed to make money, but there comes a point where protecting our home and the homes of our fellow species is more important than money. We are the most powerful species on this planet, we deserve to steward it in a responsible and effective manner. So flame me as a tree hugger.

[Donger]

Considering that you could save more fuel by raising emission standards by 10% than what is in all of the ANWR, that is a pointless statement. There is also other good reason for you not to want to drill in the ANWR-- the environmental impact on many species who use that area as their breeding ground.

Companies are designed to make money, but there comes a point where protecting our home and the homes of our fellow species is more important than money. We are the most powerful species on this planet, we deserve to steward it in a responsible and effective manner. So flame me as a tree hugger.

I seriously hope you use mass transit, walk, ride a bike, etc. Yes?

[banyon]

Why would a company want to explore and drill in places like ANWR when the f*cking government prohibits them from doing so?

They are in business to make money, not unlike any other business. Are there other companies/industries out there that you feel so strongly against making huge profit? Or, is it just oil companies?

Yes, i'm pretty much against any industry that is in control of an inelastic good not being regulated. If that's bread, water, or electricity, inexpliciable record profits there would bother me too.

Why are you so hung up on ANWAR? Even according to the petroleum industry's rosiest projections, we'd get a year's worth of petroleum out of it at best.

[patteeu]

when did he point that out? What would be an unreasonable rate of return for you guys?

In post #7, he alluded to the fact that profit margins for the oil companies aren't out of line with other US industries. (I made the mistake of using "return on investment" instead of "profit margin" in my previous post. My bad.)

I admit that I don't think any profit margin (or rate of return for that matter) is unreasonable as long as it is achieved through arm's length transactions (as opposed to fraud, violence, government corruption, etc.). But that doesn't change the fact that these profit margins are reasonable by more commonly accepted measures (e.g. they are in line with other US industries).

[patteeu]

Yes, i'm pretty much against any industry that is in control of an inelastic good not being regulated. If that's bread, water, or electricity, inexpliciable record profits there would bother me too.

Why are you so hung up on ANWAR? Even according to the petroleum industry's rosiest projections, we'd get a year's worth of petroleum out of it at best.

If you are aware of any evidence that the oil companies are cooperatively fixing prices in order to gouge their consumers then I'd be interested to hear about it. If not, then competition should be able to adequately regulate prices even in an industry in which demand is inelastic.

OTOH, there is a monopolistic entity that is involved in gouging the customers who have very little choice but to buy the products of the oil companies. That entity is government. Shouldn't those who are concerned about whether or not the oil companies are taking advantage of our energy addiction be even more concerned about gas taxes and the like?

[gblowfish]

More of the same from Exxon:
http://tinyurl.com/7u7xf

By STEVE QUINN, AP Business Writer

DALLAS - Exxon Mobil Corp. posted record profits for any U.S. company on Monday — $10.71 billion for the fourth quarter and $36.13 billion for the year — as the world's biggest publicly traded oil company benefited from high oil and natural-gas prices and solid demand for refined products.

The results exceeded Wall Street expectations and Exxon shares rose more than 3 percent in afternoon trading.

The company's earnings amounted to $1.71 per share for the October-December quarter, up 27 percent from $8.42 billion, or $1.30 per share, in the year ago quarter. The result topped the then-record quarterly profit of $9.92 billion Exxon posted in the third quarter of 2005.

Exxon's profit for the year was also the largest annual reported net income in U.S. history, according to Howard Silverblatt, a senior index analyst for Standard & Poor's. He said the previous high was Exxon's $25.3 billion profit in 2004.

The company said its average sale price for crude oil in the U.S. during the quarter was $52.23 a barrel, compared with $38.85 a year earlier. It sold natural gas in the U.S., on average, for $11.34 per 1,000 cubic feet, compared with $6.61 during the same period a year ago.

Exxon's vice president of investor relations Henry Hubble said that while strong commodity prices clearly helped drive the record earnings, the company also deserved credit for its ability to complete projects on time while keeping costs in check.

"We continue to identify world-class projects, post industry-leading returns, and are well-placed for continued growth," Hubble told analysts in a conference call. "Our record results show a disciplined approach and we continue to deliver superior value to our shareholders."

Exxon's results lifted the combined 2005 profits for the country's three largest integrated oil companies to more than $63 billion.

ConocoPhillips said last Wednesday that its fourth-quarter earnings rose 51 percent to $3.68 billion, while annual income climbed 66 percent to $13.53 billion. Two days later, Chevron Corp. said its fourth-quarter earnings rose 20 percent to $4.14 billion, while annual income jumped 6 percent to $14.1 billion.

The oil industry's stellar results renewed talk among some politicians for a windfall profit tax that would push companies to invest more in new production and refining capacity.

Sen. Barbara Boxer (news, bio, voting record), a California Democrat who sharply criticized oil executives appearing before Congress in November, struck again on Friday. She called on the Bush Administration and the Federal Trade Commission to "put an end to gouging," then suggested that FTC stood for "Friend to Chevron."

But John Felmy, chief economist for the American Petroleum Institute, a Washington-based trade group, said Monday that the political rhetoric was "not a case based on fact."

"We invested somewhere in the order of $86 billion last year," Felmy said. "Then we have to treat investors appropriately otherwise we'd have the Eliot Spitzers of the world coming after us."

The results for Exxon's latest quarter included a $390 million gain related to a litigation settlement. Excluding special items, earnings were $10.32 billion, or $1.65 per share. The result topped Wall Street's expectations. Analysts surveyed by Thomson Financial predicted earnings of $1.44 per share.

Exxon shares rose $2.17 to $63.46 in afternoon trade on the
New York Stock Exchange. That is near the upper end of its 52-week trading range of $51.35 to $65.96.

Quarterly revenue ballooned to $99.66 billion from $83.37 billion a year ago but came in shy of the $100.72 billion Exxon posted in the third quarter, which was the first time a U.S. public company generated more than $100 billion in sales in a single quarter.

By segment, exploration and production earnings rose sharply to $7.04 billion, up $2.15 billion from the 2004 quarter, reflecting higher crude oil and natural gas prices. Production decreased by 1 percent due to the lingering effects of hurricanes Katrina and Rita, which battered the Gulf Coast in August and September.

The company's refining and marketing segment reported $2.39 billion in earnings, as higher refining and marketing margins helped offset the residual effects of the hurricanes.

Exxon's chemicals business saw earnings, excluding special items, decline by $413 million to $835 million, as higher materials costs squeezed margins.

For the full year, net income surged to $5.71 per share from $3.89 per share in 2004. Annual revenue grew to $371 billion from $298.04 billion.

To put that into perspective, Exxon's revenue for the year exceeded Saudi Arabia's estimated 2005 gross domestic product of $340.5 billion, according to statistics maintained by the
Central Intelligence Agency

[gblowfish]

Exxon makes $4.6 million PROFIT per minute, every minute, 365 days a year. Now they want to weasel out of paying for the damage from the Valdez spill in Alaska.
Story is here: http://tinyurl.com/b6ykl

[banyon]

OTOH, there is a monopolistic entity that is involved in gouging the customers who have very little choice but to buy the products of the oil companies. That entity is government. Shouldn't those who are concerned about whether or not the oil companies are taking advantage of our energy addiction be even more concerned about gas taxes and the like?

Here, we finally have some grounds to agree. I just said that Gas taxes were better than handing windfall profits to oil companies if they help serve to guide us toward energy independence.

I would disagree that there aren't monopolistic tendencies currently in the private market, however. What's the last corporate merger that Bush disallowed? (not that Clinton helped our energy independence either.)

BP, ExxonMobil, ChevronTexaco, Royal Dutch Shell, and ConocoPhillips: these five companies control 62% of the US retail gasoline market. The same companies control 50% of the refinery capacity in the US, and 48% of the oil production. About the only area where they don't dominate is in worldwide petroleum production, where they own only 14% of the production, only because of the domination of national oil companies in OPEC and elsewhere. Even there, the big five oil companies have close relationships with these national companiesAfter all, the price of crude oil makes up only 45% of the cost of gasoline. Government takes account for 23%. The rest goes to refiners and (to some degree) retailers. That's according to a USA Today article ("Gas costs rose after big mergers," 5/27/2004. That story details a recent US General Accounting Office (GAO) report that tracked 2,600 petroleum mergers from 1991 to 2001. Most of the mergers led to price risers on average, two cents higher (on the West Coast up to seven cents higher).

www.gao.gov/highlights/d0496high.pdf
Just listen to the names of these companies. Maybe two more will merge and we'll have ExxonMobilChevronTexaco. If you don't regulate corporations or prevent continual mergers, then what you wind up with is essentially the same as Communism under the Soviet Union. One giant corporation will provide all the goods and services and make all of the decisions. Regulation in this case helps competition and promotes a truer form of capitalism.

[patteeu]

Here, we finally have some grounds to agree. I just said that Gas taxes were better than handing windfall profits to oil companies if they help serve to guide us toward energy independence.

I would disagree that there aren't monopolistic tendencies currently in the private market, however. What's the last corporate merger that Bush disallowed? (not that Clinton helped our energy independence either.)


www.gao.gov/highlights/d0496high.pdf
Just listen to the names of these companies. Maybe two more will merge and we'll have ExxonMobilChevronTexaco. If you don't regulate corporations or prevent continual mergers, then what you wind up with is essentially the same as Communism under the Soviet Union. One giant corporation will provide all the goods and services and make all of the decisions. Regulation in this case helps competition and promotes a truer form of capitalism.

I'm glad we can agree on the taxation issue. :)

As long as I have a choice between Shell, Conoco, and BP when it comes to filling my tank (in my local area), I think that's enough competition as long as they aren't getting together to fix prices. So far, I haven't seen any evidence that such price fixing is taking place. If I do, I'll be critical of the practice.

FWIW, high energy prices are the only way we are ever going to break our dependence on foreign oil (or oil in general). Whether or not oil tycoons get rich in the process doesn't matter to me all that much. There are always going to be people who are making truckloads of money. It doesn't help anyone to get overly concerned with that or to try to prevent it from happening.