View Full Version : Big Oil has its day in the senate.
Well, it seems that Big Oil has their day(s) in DC this week answering questions as to why they are posting record profits that were a direct result elevated gas prices that suspiciously appeared the same time Hurricane Katrina landed.
Rebublicans and Democrats alike are feeling the pressure from their constituents regarding the prices at the pump, and at the same time seeing the news reports of record profits by all the major oil companies. By nature, Republicans are even more in a bind because they are supported by and are historically supportive of big oil industry, and yet some are questioning that historic loyalty as they are getting huge amounts of pressure from their constituents.
One common mantra that is heard so far by the oil exec's is that if they were to artificially freeze pricing at a lower price they would have faced shortages because of the high demand during this time period. Well, the pure economist in me says that artifical ceilings are not a good thing in general, and in the long run can create shortages.... HOWEVER, I'm having a hard time buying this excuse because shortages are a natural expectation when you are evacuating cities of million plus people. DUH.
This will be very interesting how the meetings turn out and what legislation if any restult from it.
What are your thoughts?
Tsa`ah
11-09-2005, 03:08 PM
My thoughts?
The damage is already done and big oil isn't about to let go of any recent windfall.
Will the prices go down? Most likely as a response to the hearings, but the reduction won't be that significant. Nor will it be lasting.
Will there be fines? Maybe, but to these guys it's nothing but business as normal.
Will there be indictments? Not a chance in hell.
What does this mean to the consumer? 10 to 20 cent reduction per gallon over the next year and a 50 cent increase over the following 3 years.
The hearings are nothing but token gestures and the every day consumer will still get the shaft at the pumps and the bleed off hikes in everything else.
If our elected officials were serious, they would have kicked off investigations that would probably lead to indictments, or at the very least nix petroleum taxes for a short time in an effort to allow the consumers to recoup the losses while keeping big oil happy with it's huge profits.
Some Rogue
11-09-2005, 03:36 PM
Gas has already went down about 70 cents from it's peak price.
My question is why should the government foot the bill by dropping the taxes? Now, don't get me wrong, I think the taxes are already outrageous, especially here in Illinois, but it's not the government's fault the companies were gouging us. The massive amount of revenue that would be lost by the government doing that would also increase already record deficits which would just make the liberals cry even more about how the current administration sucks.
ElanthianSiren
11-09-2005, 03:41 PM
Windfall profits tax. I think that may be where we're going with this, or it is a venue, at least being explored.
-M
Tsa`ah
11-09-2005, 03:58 PM
Originally posted by Some Rogue
Gas has already went down about 70 cents from it's peak price.
That alone should tell you something.
My question is why should the government foot the bill by dropping the taxes?
It's not footing the bill at all. The Senate has no intention of price regulation and my point was that if they were sincere about this, measures would already have been taken. Dropping consumer oil taxes to alleviate the consumer burden would in no way be footing the bill ... it would be an expression of concern.
That did not happen.
Now, don't get me wrong, I think the taxes are already outrageous, especially here in Illinois, but it's not the government's fault the companies were gouging us.
The government exists to protect the citizenry from this sort of thing. They showed no concern until their constituents put their job security into question.
The massive amount of revenue that would be lost by the government doing that would also increase already record deficits which would just make the liberals cry even more about how the current administration sucks.
Then prices should have been regulated and the tax burden shifted from the consumer to the producer.
The producer is still able to profit, and considerably, while the consumer isn't hit by inflated costs of everything due to oil companies and their profit margins.
But, as I said; The damage has been done, the hearings are nothing but token gestures, we’ll see short term relief followed by long term hikes to keep big oil’s appetite for huge profits satiated … and in the end … nothing gets done.
Apotheosis
11-09-2005, 04:27 PM
I think this just points out a situation that many have been ignoring for awhile.
Yes, we are in a capitalist economy, government should not control any industry.
With that said, perhaps there needs to be a clear definition as to what products/services/utilities should be regulated by the government.
IE: Energy and communications, to name a few. And by regulated, I mean fixed pricing across the nation.
Tromp
11-09-2005, 04:32 PM
I say let them keep it but have them commit to increase the spending on researching alternative fuels. This is a win/win for both parties.
Warriorbird
11-09-2005, 04:33 PM
Seems completely meaningless to me... but might be a good hot button issue for elections.
Frankly, I am appalled at these iron fisted senators. Putting a cap on how much a company can make? They sound like a bunch of friggin communists. /sarcasm
With the public finally realizing they are getting raped by corporations and the evangelicals calling for a cleaner environment... people are finally starting to come around to things I’ve been saying for years. Well, I can’t take all the credit for my views, only for adopting them.
[Edited on 11-9-2005 by Backlash]
[Edited on 11-9-2005 by Backlash]
Showal
11-09-2005, 04:50 PM
A gas station in MA the other day lowered his gas prices to about 1.00 and eventually got a call from the city to raise his prices because of the traffic it caused. I believe he was doing it to show that gas prices can be low and maintain a reasonable profit.
Some Rogue
11-09-2005, 04:55 PM
I'll guarantee you he was not making a profit on his gas at a dollar a gallon.
Warriorbird
11-09-2005, 05:51 PM
Frankly, I am appalled at these iron fisted senators. Putting a cap on how much a company can make? They sound like a bunch of friggin communists. /sarcasm
With the public finally realizing they are getting raped by corporations and the evangelicals calling for a cleaner environment... people are finally starting to come around to things I’ve been saying for years. Well, I can’t take all the credit for my views, only for adopting them.
Are we living on the same planet? Stuff is most definitely not okay.
On a different note:
There's a local fellow what has fuel for just under 2 dollars a gallon (though he runs out a lot) and gets complaints from companies and such. That's more in line with uninflated costs.
[Edited on 11-9-2005 by Warriorbird]
Valthissa
11-09-2005, 06:24 PM
Exxon made just under 10% profit based on total revenue for the third quarter (you can look it up). Our little aerospace company managed just under 14% for the same quarter. I'm not expecting to be called before congress for our windfall profits.
I don't think that Exxon is fully charged for the cost of producing oil. They have a lot of corporate welfare that I would like to see eliminated.
a windfall tax will discourage investment (economics 101, research the results of the windfall profit tax enacted during the energy crisis)
If you require that gas stations set their price at a government approved level, then during times of peak demand you will get shortages and long lines.
Gas prices are down almost $1 gallon here in Williamsburg ($2.01/gallon).
We all may think we want an inefficient, non-market based system for delivering energy - until we have to live with the consequences.
I agree with WB that this makes for a good political show - full of sound and fury, signifying nothing.
C/Valth
Warriorbird
11-09-2005, 06:40 PM
As a mostly unrelated note...Virginia has crazy low gas prices in general compared to most of the rest of us.
Do I think that these hearings are gestures of empty promises? Yes.
Do I think the windfall tax is a good idea? No (Econ 101 as mentioned before)
Do I think that utilities should be nationalized? No
Do I think that prices should be fixed or have a ceiling? No, except for clearly defined instances of natural disasters where fuel inventories will be depleted regardless of price due to the nature of the evacuation. (This is why I dont buy the big oil's excuse of lower prices creating shortages... when applied to circumstances where there are alternatives yes, but when you are discussing mass evacuations and that people are only going to be consuming what they can take with them, regardless of pricing, that theory doesnt fly).
Do I think that big oil should reinvest these profits back into their consumer base? Yes.
My thoughts...
Daniel
11-09-2005, 07:42 PM
This is why I ride a scooter
Originally posted by Daniel
This is why I ride a scooter
For those who dont have kids, a job requiring entertaining clients, or wearing a suit/nice dress, and for those who live where it doesnt rain, or have to drive for distances greater than 30 miles... thats the way to go.
Daniel
11-09-2005, 07:48 PM
Why the fuck can't I quick reply to this thread.
Anyway, I live in Washington state so fuck your condescending standards.
Originally posted by Daniel
Why the fuck can't I quick reply to this thread.
To keep [some] people from posting idiotic comments without the ability to preview what they've said before hitting teh post button.
Originally posted by Daniel
Anyway, I live in Washington state so fuck your condescending standards.
:lol:
Not condescending standards, just the natural evolution of normal American human life. Eventually one of the above instances will cause/force you not to drive/use your scooter as a primary mode of transportation before you get old enough to retire. Resistance is futile.
Oh, I forgot to add dating to that list.
Originally posted by Ganalon
Originally posted by Daniel
This is why I ride a scooter
For those who dont have kids, a job requiring entertaining clients, or wearing a suit/nice dress, and for those who live where it doesnt rain, or have to drive for distances greater than 30 miles... thats the way to go.
Its hypocritical to be elitist about buying some gas then turn around and bitch about high gas costs.
Remember, this particular issue is CONSTITUENT driven and is crossing party lines. Never mind the environmental and wildlife preservation issues. Shoot howdy shucks, fuck nature but when it hits my balance register something needs to be done about it!
Does this remind anyone of when big tobacco went before Congress? Yeah, I agree, these are crumbs for the masses.
Originally posted by Backlash
Its hypocritical to be elitist about buying some gas then turn around and bitch about high gas costs.
Remember, this particular issue is CONSTITUENT driven and is crossing party lines. Never mind the environmental and wildlife preservation issues. Shoot howdy shucks, fuck nature but when it hits my balance register something needs to be done about it!
You're right, it is hypocritical. Too bad you're implication of me being hypocrital is as wrong as most of your other off the wall ideas. Go back and re-read my posts concerning gas prices and my opinion of the free market system... and then read my opinion and struggle with free market vs. regulated market during times of a crisis (with regards to gas pricing). Then explain how thats being hypocritical?
The last paragraph of yours is just too stupid to even comment on.
edited to add:
Thanks for assinging the category of 'elitist' to my words when thats one of the farthest thing I'm attempting to represent. Capitalist perhaps, Republican most of the time, but not elitist. But I'm sure wallowing in all of your rhetoric makes you feel cozy so I'll leave you with that opinion ever wrong as it is.
[Edited on 11-10-2005 by Ganalon]
Originally posted by Ganalon
Originally posted by Backlash
Its hypocritical to be elitist about buying some gas then turn around and bitch about high gas costs.
Remember, this particular issue is CONSTITUENT driven and is crossing party lines. Never mind the environmental and wildlife preservation issues. Shoot howdy shucks, fuck nature but when it hits my balance register something needs to be done about it!
You're right, it is hypocritical. Too bad you're implication of me being hypocrital is as wrong as most of your other off the wall ideas. Go back and re-read my posts concerning gas prices and my opinion of the free market system... and then read my opinion and struggle with free market vs. regulated market during times of a crisis (with regards to gas pricing). Then explain how thats being hypocritical?
The last paragraph of yours is just too stupid to even comment on.
You started this thread not me, fellow constituent. C/Val came in with the oil company rhetoric and now you are back to being all fine with paying out the ass not only for your own gas but what everyone charges you for having to buy higher priced gas.
I’ll give you one thing, you are willing to take it.
God your dense.
My complaint is with the predatory behavior of pricing during an eminent disaster and using economic theory to use for justification when its clearly not applicable to the model. Its an ethical problem, something you have a hard time recognizing beyond your fanatical machinizations.
And yes, somethings are bigger than the individual. I would have thought you would have recognized that. (let me know if I need to explain what this refers to, since you tend to look at the world through backlash colored glasses).
Oddly enough, I think we are both saying the same thing. It just seems like you change your tune depending on how much goes against your education vs. your bank balance.
Sorry, I dont change my tune.
My bank account balance has nothing to do with my economic theory other than how it dictates my behavior in the market place.
Find another conspiracy.
Ok, Mr. Capitalist. :lol:
You bet mr. left wing fanatic.
:rolleyes:
Oh wait, thats chicken little. :lol:
[Edited on 11-10-2005 by Ganalon]
Its what ever it is until your betters tell you otherwise.
The sad thing is that the only thing you understand is extremes. Black or white.
The fact that I do believe in free markets and yet can berate unethical behavior and call for at least some accountability (undefined at this point) bothers you. Its like throwing you a curve ball when all your used to swinging at are heaters.
So your solution is to call it hypocracy. I call it living in the real world. Something you should try, whether its in the US or Venezuela with your political idol Chavez.
Originally posted by Ganalon
The sad thing is that the only thing you understand is extremes. Black or white.
The fact that I do believe in free markets and yet can berate unethical behavior and call for at least some accountability (undefined at this point) bothers you. Its like throwing you a curve ball when all your used to swinging at are heaters.
So your solution is to call it hypocracy. I call it living in the real world. Something you should try, whether its in the US or Venezuela with your political idol Chavez.
At least I’m consistent.
But then again, so are you. Consistently making up shit and changing your tune however it suits you.
Anyway, take it U2U if you want to continue. No need bothering everyone else with your hypocrisy.
Yea, you're a consistant lunatic who cant modify your stance to a realistic view and a realistic solution.
No need to take it U2U. I have no wish to carry on a private conversation with the likes of you.
[Edited on 11-10-2005 by Ganalon]
Real is what is, not what you want it to be. But I am no one to stop freedom of making an ass out of themselves.
Carry on.
edited to let Backlash have the last word so he can sleep tonight.
[Edited on 11-10-2005 by Ganalon]
Daniel
11-10-2005, 02:42 AM
Trust me when I say I have no problems getting dates.
Ganalon FTL
The head of the big oil companies saying there weren't gouging the consumer, reminded me of the heads of big tobacco sitting before the senate saying nicotine isn't addictive.
The problem is that there is no competition between Oil companies. There is price fixing. First off we have OPEC which is a cartel which is anti-capitalist. Then we have the refiners and oil companies involved in price fixing. This isn't capitalism, it is an Oligopoly. The consumer is screwed getting in the process.
Regarding Tsa'ah's idea of tax relief at the pumps, while the conservative in me loves the idea, the conservationist fears it will encourage greater consumption. In England they admit they put punitive taxes on gas to discourage excessive consumption.
The other reality is that India and China are using much more oil than forecasted which has driven up the price of crude. Recently the warm weather has driven the price of crude down but not for long I fear.
Since China has an economy about the size of Italy's I don't really them as being as big of a hit on oil as some might think.. Not yet at least.
- Arkans
Originally posted by Arkans
Since China has an economy about the size of Italy's I don't really them as being as big of a hit on oil as some might think.. Not yet at least.
- Arkans
China has surpassed the United States as the largest consumer of grain, meat, coal and steel.
It is the world's second largest consumer of oil.
LINK (http://www.atimes.com/atimes/China/GB18Ad01.html)
Wezas
11-10-2005, 12:49 PM
Saw on the news what I thought was a clip from senate hearings. A lady was pointing towards a graph that showed the big 3 oil company CEOs all getting bonuses of between 2-5m.
Wish i could have watched the whole thing to get all the facts.
Latrinsorm
11-10-2005, 01:26 PM
Originally posted by xtc
China has surpassed the United States as the largest consumer of grain, meat, coal and steel.How the hell were we ever ahead of them in grain? Isn't the principle food in China rice?
Originally posted by Wezas
Saw on the news what I thought was a clip from senate hearings. A lady was pointing towards a graph that showed the big 3 oil company CEOs all getting bonuses of between 2-5m.
Wish i could have watched the whole thing to get all the facts.
That was Barbara Boxer.
If you company is making 9 billion in a quarter, I'd ask for a bigger bonus.
Janarth
11-10-2005, 04:23 PM
Originally posted by Daniel
Trust me when I say I have no problems getting dates.
Ganalon FTL
Sure sure, getting dates, but how do you get them to come back to your place? On the scooter ;)? haha, playing, kidding. Seriously though, ugprade to a motorcycle dude! Still great mpg, but much more fun!
Janarth
11-10-2005, 04:25 PM
Originally posted by Arkans
Since China has an economy about the size of Italy's I don't really them as being as big of a hit on oil as some might think.. Not yet at least.
- Arkans
China is HUGE. Hot place for investment. Their economy is exploding. Seriously, thats all I hear about here. I also here that labor is so cheap its more cost effective to buy 100 shovels and employ 1000 people to dig around the clock then get a bulldozer shipped over. <shrug>, meh.
Janarth
11-10-2005, 04:28 PM
Originally posted by Backlash
Real is what is, not what you want it to be. But I am no one to stop freedom of making an ass out of themselves.
Carry on.
While I agree reality is what it is, how is your perception of it any better than Ganalon's?
[Edited on 11-10-2005 by Janarth]
Originally posted by Janarth
Originally posted by Arkans
Since China has an economy about the size of Italy's I don't really them as being as big of a hit on oil as some might think.. Not yet at least.
- Arkans
China is HUGE. Hot place for investment. Their economy is exploding. Seriously, thats all I hear about here. I also here that labor is so cheap its more cost effective to buy 100 shovels and employ 1000 people to dig around the clock then get a bulldozer shipped over. <shrug>, meh.
Arkans isn't a business or economics major that is for sure.
China GDP
7,262,000,000,000
Italy GDP
1,609,000,000,000
China's GDP is growing at around 9% annually. That is huge.
Originally posted by Janarth
While I agree reality is what it is, how is your perception of it any better than Ganalon's?
[Edited on 11-10-2005 by Janarth]
Its not. We were just fighting.
4a6c1
11-10-2005, 08:37 PM
:spaz:
OMG DOES THIS MEAN BP PRICES WILL GO UP OMG.
:spaz:
Warriorbird
11-10-2005, 09:25 PM
Probably. Grand for investment and certain companies. Lousy for others.
I'm betting [petrol] prices will level off around ~$1.80 per gallon over the winter.
It will be interesting to see what the prices will be at the start of next summer.
[Edited on 11-11-2005 by Ganalon]
Warriorbird
11-10-2005, 10:12 PM
1.80 a gallon would be reasonable. I don't see it. The economy isn't that benign.
Prices through this winter will be interesting depending on how severe it is.
Tsa`ah
11-11-2005, 09:37 AM
Originally posted by xtc
Regarding Tsa'ah's idea of tax relief at the pumps, while the conservative in me loves the idea, the conservationist fears it will encourage greater consumption. In England they admit they put punitive taxes on gas to discourage excessive consumption.
That's why you tax direct consumption, not general consumption.
Drive a H2? Guess what, you're the jackass that's getting hit with a consumption tax. Drive a Metro? He's a rebate due the Jackass consuming 200% more in a week than you do in a month.
Most of us already pay a consumption tax in the form of a sales tax for most goods. I wonder what specific taxes are built into the price of gas... time to do some research.
Tsa`ah
11-11-2005, 10:04 AM
Originally posted by Ganalon
Most of us already pay a consumption tax in the form of a sales tax for most goods. I wonder what specific taxes are built into the price of gas... time to do some research.
Those are "general" consumption taxes. Currently the metro driver is paying for the hummer driver's consumption and only the hybrid and electric owners are getting a break.
If you remove the general tax and make each type of automobile owner responsible for their own consumption ... you'll see a bigger impact.
Warriorbird
11-11-2005, 10:04 AM
The Hummer driver is also getting a large tax break. Don't forget that.
Originally posted by Warriorbird
The Hummer driver is also getting a large tax break. Don't forget that.
Which tax break is he getting? I know he paid a hefty luxury tax for the vehicle upon purchase if he bought new.
Warriorbird
11-11-2005, 10:12 AM
There's a large tax break for high weight vehicles. I know you can get it for the Excursion , Hummer, F250/F350, I dunno if there's any others you can get it for. It's for all vehicles over a certain poundage.
[Edited on 11-11-2005 by Warriorbird]
Interesting, thats the first I've heard of a high weight vehicle tax incentive.
Something else to look at. Although, I'm not interested in going that route for my next vehicle purchase.
Tsa`ah
11-11-2005, 10:42 AM
Originally posted by Warriorbird
There's a large tax break for high weight vehicles. I know you can get it for the Excursion , Hummer, F250/F350, I dunno if there's any others you can get it for. It's for all vehicles over a certain poundage.
It was originally intended to offer relief for small businesses, contractors, ag industries, and the small time tractor/trailor operators.
If I remember correctly, it's a larger break than hybrid/electric owners get.
That it can be used by anyone wanting to get such a vehicle is kind of sickening when you think about it.
They get to not only consume 120-200% more than us, but they get a tax break for buying it in the first place ... which dealers are sure to clue them in to before they buy it as a selling point.
Warriorbird
11-11-2005, 01:00 PM
Much higher. I think this one fellow saved roughly a fifth of his purchase price on an Excursion which = a LOT of money.
We were under orders to always mention it. It made a lot of F series customers happy...though I only sold one Excursion.
[Edited on 11-11-2005 by Warriorbird]
Valthissa
11-11-2005, 03:36 PM
Originally posted by Warriorbird
Much higher. I think this one fellow saved roughly a fifth of his purchase price on an Excursion which = a LOT of money.
We were under orders to always mention it. It made a lot of F series customers happy...though I only sold one Excursion.
[Edited on 11-11-2005 by Warriorbird]
You're refering to a section 179 deduction. Of course it's fraud unless they use the vehicle for business, but that's a different story.
This is a typical unintended consequence of legislation meant to prefer one group (small business owners operating heavy trucks or equipment) over another (regular car owner). I don't think Congress ever imagined that Detroit would produce vehicles over 6000 pounds that were intended for family use.
I also think that the deduction was revised (why didn't they just eliminate it?)
C/Valth
[Edited on 11-11-2005 by Valthissa]
Warriorbird
11-11-2005, 03:39 PM
He theoretically occassionally uses it in his job as a real estate agent.
:chuckles:
Tsa`ah
11-11-2005, 03:45 PM
Originally posted by Valthissa
I also think that the deduction was revised (why didn't they just eliminate it?)
I'm not sure if the revision has made it in yet, as it is still a selling point the last time I went with my dad truck shopping.
If you eliminate it, there's a ripple effect. The small time and independent tractor/trailer operators don't replace their rigs as often as they should (causing a drop in sales and increase in pollutant), the contractors do the same (with the same effect), and the farmers do the same (with the same effect).
The deduction was put in for two reasons; to stimulate, and alleviate.
The way it was worded, someone just had to say it was their work vehicle ... which in most cases wouldn't be a lie. No measure was initially considered to exclude commuter use.
But Uncle Sam and the IRS were content to believe that the H2 was being used for roof construction ... go figure.
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