With gas heading for $10/gal (maybe), automakers aren't raking in the bucks. But oil companies are. Marketwatch reports that British Petroleum and Royal Dutch Shell both released 1Q profit numbers yesterday, and the results would make any automaker drool a little. BP made $7.2b in the last three months, beating analysts expectations by over a billion bucks. Shell boasts a whopping $9.08b in profit this quarter, also beating market expectations by over a billion. Neither BP nor Shell increased production by more than one percent; they received between 52 and 66 percent more per barrel sold than last year. Even the oil companies are scratching their heads– all the way to the bank on these numbers. "We don't understand the oil price at this stage," Shell CFO Peter Voser tells The International Herald Tribune . "The fundamentals will not justify an oil price as we see it at the moment." Voser added that Shell "was not investing money in projects that would require oil prices to remain high to be profitable." (That's the job of SUV makers.) ExxonMobil and Chevron are expected to announce their own knee-weakening profits later this week.
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No kidding. Oil companies making big profits. So, the whole Bush presidency, the Iraq war, etc., it’s all working out.
So….let’s have more of it, yes?
Isn’t it time for a “REAL” change from the status quo?
No, not Obama…. he’s just the same o same o in a different wrapper (sorry to be so honest).
As long as we Americans continue to simply hire the same politicians time after time after time after time, we are not going to see any changes in anything.
Including the oil crisis (which is really what it is becoming).
One definition of insanity is doing the same thing over and over again, and expecting a different outcome.
If we want to build a nation free of constraints by importing the majority of our energy needs, we need to essentially fire those in power who have been in collusion with the energy companies, the banking cartels and so forth. “Just follow the money” and you see who runs the world and the US.
We need a fresh, but old fashioned start. Start from basics. How about starting at the beginning, if we want to start over? (as the youngsters say, “Well DUH!”)
It’s called the United States Constitution.
http://www.constitutionparty.com
Just imagine a future with no IRS, no smoke filled back room deals, no empire building and no US troops in 130 nations of the world (out of 190 total).
Good thing those oil companies are getting those desperately needed tax breaks for exploration. Without those, how could they afford to find new sources. I’m relieved!
And I haven’t moved my 401k entirely into oil because….
Total B.S!
I know this is a free market economy and a democracy. But, they’re subsidized by U.S. CITIZENS to the tune of $18 million for new energy exploration!
And the politicians should fce teh musinc and get voted out without their pensions!
They should rot in Iraq!
Let’s get more friendly with Brazil.
So you want lower gas prices? Ask your governments (fed and state) to lower the gas taxes.
Why is it a OK for the oil companies to make less money on gasoline, but not OK for the government to make less money on gasoline?
The comments to this point have been hysterical.
Other than Lieberman (and pfingst), the posters ahead of me are blaming this on politicians and mad at tax breaks.
Is anybody here capable of the math showing that $18 million in tax breaks per year A) doesn’t make a difference in our economy and B) has miniscule impact on an $8 billion dollar quarterly profit? Sure.. let’s take away the tax breaks. That way the oil companies would only make $119,980,000,000 each year.
Am I the only one that noticed that they’re getting 60% more for a barrel of oil than they did last year? How is that the governments fault?
Does anybody else here realize that Wal~Mart makes almost as much per dollar of revenue as Exxon? Where’s TTAC’s outrage over the price of turn signal bulbs?
This subject contains almost as much knee-jerk excitement as guns.
@pfinst
maybe because oil execs use their billions to buys yachts and mansions and the govt uses gas taxes to pay for things like, o i dont know, roads and bridges??? I guess some peeopl didnt mind seeing the collapsing bridge last year.
I suppose it’s just a matter of time before we get the dreaded, “they only make a 10% profit.”
Why, in the US, have we been so well conditioned to believe that it is not only acceptable, but admirable, that a corporation should make 40 BILLION dollars a year? PROFIT, not revenue. Can you fathom that kind of money? And every one of them, Shell, BP, Exxon, Chevron, they’re all raking in that amount of cheese.
We’ve spent over 500 billion dollars to fight in Iraq for the oil companies. I bet if you add all their profit (not revenue, PROFIT) up for the past 5 years, BP, Exxon et al could have paid for the war and still had some money left over for a couple of yachts.
As anti-statist as I can get some times, I’m still not sure I like the idea of private Oil Company armies fighting “their own wars” in Iraq or elsewhere. I say this because the possibility ain’t that far off.
As to the gas tax thing, Jonny’s post on the political shakeout shows that any kind of tax relief will be popular (two out of three candidates support it). On the other hand, the war was popular enough (incidentally with those two candidates as well)when it started, but good luck finding unqualified supporters now.
I say if effed-up profits for oil companies make people do more than just whine (i.e. take whatever action possible to reduce personal dependence on the stuff), then bring on the profits. The more you wring out of people, the better the alternatives become. The market doesn’t usually mess up for long.
The government was in charge, and had the money, but the bridge still collapsed. Shows you how useful they are.
And in other news, the sun rose this morning, gas prices went up another dime per gallon, and everyone lit their cigars with $100 bills!
Life is good!
I wonder how much of that profit they found under the sofa?
To the “winner” this November, good luck. By that time, maybe most of our economy will have shut down!
Holy Crap. $9B in a single quarter. Meaning annually it’s the equivalent of $36B in profit.
Some figures from The Economist Intelligence Unit
The GDP (gross domestic product) for some countries:
– Morrocco: $71B
– Uganda: $13B
– Kenya: $25B
– Ecuador: $45B
– Uruguay: $24B
– Sri Lanka: $35B
… and keep in mind that BP and Shell are not the largest oil companies. I’m anxious to see what Exxon/Mobil reports. Or not.
To pfingst, who asks: “Why is it a OK for the oil companies to make less money on gasoline, but not OK for the government to make less money on gasoline?”
Because the governement is you, it’s us.
Without oversimplifying too much, the reason that the “government” can do what “it” wants is because a large majority feel that it is some other group of ppl out there in another world. The collective has indeed handed over the “goverment” to a group of special interests, by being uninvolved in, and uninformed of, the political process.
Here’s what “governement” and “taxes” are, boiled down:
=======================
A small group of people all live in a community in an isolated frontier land.
Bordering their town runs a small river that provides them with water.
On the other side, one farmer sees some great fertile land. He looks into building a bridge to get to it, and determines it’s way too expensive for him; he can’t afford it. But the land could feed the entire community very well.
So 500 families get together, put in 1000 bucks each, and now they can build that bridge. Because Jeremiah and Hortense are good at engineering work, they pick them to manage the project from end-to-end.
=======================
That’s it.
The $1000 are the “taxes”, Jeremiah and Hortense are the “government” and the bridge is something that will feed everyone, but that no one could (or should) build alone.
Multiply that up by a few orders of magnitude, and this is what “government” and “taxes” are.
Reclaim them.
One final thing:
The US system desperately needs a third, even fourth viable party.
For chrissake, there are 300 million citizens, you’d figure there are a bit more than just 2 ideas on how to run the country.
Kman, there ARE two viable alternative parties out there.
I’ve voted Libertarian pretty consistently from 1980, now I’ve switched to the Constitution Party, which is larger, growing faster, and is more oriented towards the mature public instead of younger set. (Libertarians want to legalize drugs – I’ve seen too many people with messed up lives and with messed up families and friends from their messed up lives to go along with that idea – otherwise the two parties have a lot of similar ideas).
I guess I’m just an early adopter. Bought my first Prius in 2005, I’m on my second one. Not because of the “CO2 panic” (which is bull ka ka) but to – as someone said above – start making a small difference in how much energy I used on a personal basis. Because I knew this was coming. And I’ve known it since 1973.
Menno, point taken.
I should rephrase, because, as you point out, there are indeed other political movements in the US (Ralph Nader,e.g.)
Let me rephrase this way:
The US desperately needs a better democratic system to allow a broader swath of views to be viable participants. E.g. campaign spending limits, legislated appearances on public debates (within parameters of legitimacy) and other such measures.
One discussion woefully lacking from the current presidential race (dem and gop): there is plenty of blame being placed — rightfully — at the Bush administration’s feet, but I am not hearing anything about preventing something as disastrous as Bush&Co from occuring again.
A system that allowed the fooling of an entire nation — the most powerful nation — is downright dangerous, as shown in the past 8 years.
A public that re-elected such an administration is another, hugely worriesome event of the past 8 years.
Those two points — a broken democratic system, and an easily manipulated public — are not being discussed at all.
That’s most worriesome.
It sure is amazing how much oil we use and how much money can be made from it.
————————-
Constitution Party? Really? From their site:
5. Constitution: and Bill of Rights interpreted according to the actual intent of the Founding Fathers – Does this mean we’ll keep the negroes at 3/5 human?
3. Family: One husband and one wife with their children as divinely instituted; – Right, because this is in the Constitution…
Menno, are you the artist formerly known as Glenn?
Who would like the product they make to be taxed like fuel in exchange for some benefits that work out to a rounding error on the bottom line?
Let’s get serious.
20% of the worlds oil production is owned by “big oil”. 80% is controlled and owned by governments.
Is the problem “Big Oil”, or Big Government?
The reason the oil company execs can’t understand the price of oil is because they somehow have forgotten they do not work in a free market.
7.2 Billion. HA!
The limeys are posers!
I wager Ex-Mo beats ’em by 50%.
And I invite other Ex-Mo fans to join me in lobbying Bush and Cheney to whack Chavez and replace him with Rex Tillerson. Profit$$$ would be epic.
“Is the problem “Big Oil”, or Big Government?”
Is there a difference? Seriously?
It seems that we’re doomed to repeat the 70’s. Too many voters and politicians are either too young to have lived then or have had 30 years to forget (or rewrite in their memories) or thought that America in decline was/is a good thing. So we probably get to repeat the stupidities of the past again.
Go ahead, zap the oil company profits. Then watch investment in new fields and infrastructure drop since the publicly held Western oil companies are the ones who actually do the hard work of finding and developing our future oil supplies.
Or just try to mandate lower prices and watch dictators like Putin, Chavez and the House of Saud laugh as they sell their oil for a higher price to non-US customers.
I just can’t wait for the next President to tell us that we need to accept our misery.
Wow, this sure went off topic.
Do the math – 2,000,000 barrels /day @ $115/barrel. That’s per day folks. When oil went from $75 to $115, that $40 increase is all profit(-royalties), the costs are fixed.
I am hapy to have about 35% of my money in oil/nat gas stocks and do you know what… my biggest concern is that they will not raise the dividends fast enough!
Few appreciate that it is a cruel witch of a business. The companies produce something vital. Prices fluctuate wildly and are out of their control. When prices are low management takes flack for investing too much in exploration. When prices are high, they are called gouging crooks(see previous wacky posts). With constantly changing financials, gov’t regs and natural disasters, it is one of the most difficult industries.
I say join the fun by buying stock on their down cycles, then ride the wave or sell on their up cycles. You are going to buy gas anyways right? This way at least you are reimbursed when the pump price increases.
marc:
@pfinst
“maybe because oil execs use their billions to buys yachts and mansions and the govt uses gas taxes to pay for things like, o i dont know, roads and bridges???”
yea, they build a bridge to nowhere and fund things like studies of cow farts (hey it might cause “global warming”). Somewhere out there is a government grant (that means your money is paying for it) to fund a museum of glass soft drink bottles. Give me time and I could come up with a reasonable budget of less that 2 trillion that would adequately fund everything the country needs. This years budget is what, 3.1 TRILLION! And it doesn’t matter which party is in control. I’d rather give it to the oil companies. At least they might use for something good, like finding more oil.
Ask yourself this question: if the oil companies want the price to go up because of a shortage of oil then why are they always begging the congress to be allowed to drill for more oil and to build or expand refineries? Shouldn’t they just shut up and collect the money? Instead they want to drill in ANWR, in the gulf, off the coast of FL and CA, but congress won’t let them. And they want to get more refining capacity but it takes 10, 15, 20 years and millions of dollars to just get the freaking approval. We deserve the government that we get.
Joe SS,
Good question. Exxon and Shell are very government like, and Chevron is trying to play that way. The rest as I can tell, are much more business like. Surprisingly, that includes BP.
The BP people around here have a reputation of being the most mission oriented and least bureaucratic of all the large oil companies.
Still, when I use “Big Oil” I do it like the NYT. Big Oil is every company with more than one well or station. The vast majority of oil companies are little different from others of similar size.