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The consumers need to divorce themselves from oil companies.
Published on May 22, 2008 By jesseledesma In Politics

It is my opinion that American oil companies are earning grouse profits.  I was doing a simple search on the Internet on oil profits and I found reports of 30 percent in profit growth for oil companies since 2005. One stat was that one oil company made 89 percent profit.

Having stated the above do I believe that government at any level should start regulating oil company profits?  The answer is an emphatic no.  Government can only kill American economic growth by interfering with free market economy.

We may not like high gas prices.  However, we do not have to purchase gas.  We, the consumer can use our buying power to teach the oil companies a lesson. 

The only problem is that we have become soft.  Our simple lives are more important then the big picture.  Sometimes we just have to take a stand.  I no longer buy snickers, eat at McDonalds, or purchase anything at 7-11 convenience stores.

A harsh reality however, is that less consumption will lead to higher prices.  Every business, including oil companies, practice economic forecasting.  They see what they are making today, what the market may give, and decrease or increase production to meet en economic goal.  Consumers not purchasing gas will interfering with their economic feasting, which means they will raise prices to in order to meet their goals. 

An example of this forecasting was when the government forced auto companies to offer better mpg values.  The consumer should of being saving money because they were using less gas.  However, the gas companies saw that less consumption of gas meant less profit for them.  Therefore, oil companies raised the price of gas.

It is my belief that we need to go gas free.  The only way we can get away from oil companies grouse profiteering is to not need them at all.  The oil companies can charge all they want for a gallon of gas and it won't matter if no one is buying their product.

In addition, there many alternative vehicles.  One of the encouraging sings through out this gas price challenge is all the new vehicles that are "hybrid" or "hydrogen fuel cell".  Yes hybrids use gas.  I think hydrogen fuel cell is the way to go because it completely frees the consumer from oil campaniles.

That there is the tip of the spear.  The consumer has to adapt and stop using gasoline driven engines.  For one it will protect against oil company profiteering.   Second, using other then gas vehicles will stop the pollution of the atmosphere.

Anyone telling you cars do not pollute is lying to you.  There are many harmful toxins coming out of a gasoline vehicles tail pipe.

In closing congress was right to hold and investigation into gas prices.  It is part of protecting the American citizens against being taken unfair advantage of by businesses.  Second, I do believe American oil companies are taking advantage of the American consumer.  Three, the consumer just has to divorce themselves from gas use.  Fourth, oil companies say they need their profits for exploration and development.  However, they are not doing it.  The proof in that they are not exploring and developing is in the supply.  If they were using their profits for development of more gas there would be more gas in the market and the price would go down.  The fact that there is less gas in the market and prices are high is proof that oil company development does not work or does not exist.


Comments
on May 22, 2008
Educate yourself

WWW Link

Keep in mind this doesn't include how much the gov't gets from EACH of the employees in taxes either.

There are plenty other issues that you have slightly distorted too but since you don't ever respond on these leaves little reason to dispute.
on May 23, 2008
You're right, Jesus. I don't need to purchase gas. I can WALK the ten miles to town every day, and right now, when I'm working about 100 miles away from home, I can simply start out on Friday night and walk the distance. Man, you're a genius!
on May 23, 2008
You're right, Jesus. I don't need to purchase gas.


Hey isn't this guy a Taxi driver? He uses more fuel in one day then we do in probably a week!

Hey JL, lead the charge with a bicycle taxi business or do prefer to spout ideas with no personal conviction?
on May 24, 2008
I don't think the government should interfere with people's life, I like to think of myself asa conservative. But we also have to look at the reality around us and the interdependece of our economy. The fact that we believe in Capitalism means we believe in specialization to reduce cost. This means that when someone -ie oil companies in kahoots with car makers- charge people outrageously high prices for gas and chose to do nothing because they know we can't walk 100 miles to work. It only makes sense the government drop the price of gas. I know this is a supply and demand issue. The problem is demand is rising and there is no reason for oil companies to make more oil. Oil is an inelastic commodity, when demand or price goes up, profits go up. Unlike pizza, I cannot substitute oil. Hence there is a market failure. If Pizza cost double in a year I can eat 10 million other things. If oil cost double I'm screwded because everything made with oil, which is basically every object in our society that isn't metal or wood, will double and more. There is no real alternative t driving as if oil goes up buses pay more for gas so it doesn't fix a problem it just delays it. A free market means that I am free to choose other things, walking to work and for many in rural areas busing is not a choice.

When Oil companies fail to specialize, by purposly not increasing production, by purposely not adding ethanol, by taking too dam long to make oil cheaper so they can srew us by making us pay more for oil, knowing that there is nothing we can do until the hydrogen car comes out. Think about it, if I ran an oil company I'd probably cut production in half, and my profits would triple if 20% of companies followed as demand is increasing so rapidly. My pay would go through the sealing being a ceo. There is no reason for any oil man to lower cost unless he has brain cancer, or wants to be a saint. This is why production capacity has not increased in 60 years for oil in america.

This is why as much s I hate it, the gov. should start an oil company and drill in the anwr, offshore, and in Iraq, and in a polar bears ear hole, right into its brain if it is filled with cheap oil to drop the price of gas. And then sell that company to private business and take the profits and give us tax cuts, cheap oil, and social programs for you liberals. If I were president of america I would start up oil companies, sell them once they make some good roi, and put that money back into america. I don't care if environmentalist hate me, if I'm president, i'll make oil cheap, use the profits and distribute them to tthe states and make them decide what they want to do with the money.
on May 24, 2008
American oil companies are earning grouse profits.


Grouse profits? Someone's paying for gas with birds?

Is that how the oil companies got to be "fat cats?"


It is my belief that we need to go gas free. The only way we can get away from oil companies grouse profiteering is to not need them at all. The oil companies can charge all they want for a gallon of gas and it won't matter if no one is buying their product.


But, according to your world view, wouldn't whoever is supplying the new energy just play the same "I want this much profit so I will raise the rates" game you ascribe to the oil companies? Especially since, in all likelihood, the oil companies will just re-engineer themselves as "energy providers" and move to monopolize whatever alternative energy Darwins to the top?


There are plenty other issues that you have slightly distorted too but since you don't ever respond on these leaves little reason to dispute.


Yep. I don't know why I'm responding, except it amuses me.
on May 26, 2008
Having stated the above do I believe that government at any level should start regulating oil company profits?  The answer is an emphatic no.  Government can only kill American economic growth by interfering with free market economy.


While it is true that some free market economists believe that any price "distortion" by the Government can only be bad, your statement is nonetheless incredibly radical. For a Government to even exist it has to interfere with the free market via an income tax or sales tax. There are many other methods of Government interference that free market economists in the most part agree with, for example intervention in the insurance market (to prevent market failure), setting up a central bank to protect the financial system and consumer confidence, social security (welfare), and minimum wage legislation.

Take a step back. Why do you even believe that the Government setting up a price ceiling on oil would kill economic growth? You seem to feel that the companies are unfairly taking advantage of people with their artifically high prices. Hence, if they were forced to lower their prices (or freeze the current prices for awhile) wouldn't they still be able to operate with modest-moderate profits?

The Government can also do something else to help the situation; the development of alternative energies. With oil prices so high it is the perfect opportunity to provide subsidies to more renewable sources of energy.

Anyway, just something to think about. Government intervening into a free market does not always provoke the end of the world.

on May 26, 2008

When you think about it, the free market is the root cause of high gas prices. The only reason we haven't tapped the oil resources in ANWR isn't becasue of bleeding-heart commie Greenpeace. It's because it's just not a smart business move for the oil companies. Americans have to buy gas, so why flood the market with more product?

 I know that if I mention anything about OPEC and Big Oil controlling prices I'll get flamed, but let's be realistic here. They aren't noble capitalist knights, they're a business making a profit for their shareholders. IF screwing people is how they make big profits, they'll do it. And of course they'll make it look like they care, with BS alternative energy like ethanol. It's just good business

on May 26, 2008
Are the oil companies gouging? Possibly. If so, that's illegal. The real question isn't the total dollars they make in profit, but rather what is their actual profit margin? Naturally if they just sell more at the same margin the total dollars will rise, which is what I suspect is happening to produce these high numbers. If their profit margin has risen, then there may be cause to charge them with violations of anti-trust laws and profiteering but of course they don't report the actual margins nor are they required to do so without a court order. That's for lawyers to figure out.

I have no idea what grouse profits are though. Never heard of them.

on May 26, 2008
I have no idea what grouse profits are though. Never heard of them.


Yeah, at best, I've only so far been able to break even on grouse.

Now PHEASANT profits, on the other hand, are another story. But don't tell Jesus. He'll bring all his self loathing illegal alien buddies over here and clean out the prairies!
on May 26, 2008

There needs to be a new government program: Share the Grouse. Those greedy pigs are keeping them all to themselves!

What is the plural of grouse, by the way? Grice?

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