Real_Trouble
Posts: 471
Joined: 2/25/2008
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Question:
When oil companies make 'large' profits we want to take it away. When they record large losses, will we subsidize them?
Fair is fair.
The right answer here is twofold:
1 - Use less gas.
2 - Stop restricting alternative energy, such as nuclear, and we won't have this problem; we are as dependent on oil as we currently are because we have actively discouraged investment and development in several other forms of energy.
Suing will not break the OPEC monopolies; our gas companies are largely middlemen.
If we nationalize our oil companies, we will pay for the lost profits in taxes (if they sell at a loss, we will have to subsidize them). Also, nationalizing profitable industries is a great way to discourage future investment.
If we restrict the profits of our oil companies, they become a poorer investment and stop trying to develop new reserves or new capacity; they will move into run-off and start divesting capital. This has happened before in other industries.
Also, again, this will not force OPEC to lower their prices.
I think Archer is perhaps a bit too pro-oil (your industry has some seriously shady accounting practices!), but the posts are on target in that demand and supply will ultimately dictate.
They always do. ToysAndTies had that right (very astute post back on page 2).
Also:
quote:
When all the stations change prices on the same day, at about the same time, to about the same amount, that's pretty strong evidence of the type of collusion that violates the Anti-Trust Act. It's an extremely strict law; onna my law professors told us two people in the same industry could never even have a friendly lunch without it being criminal.
Also, that's false about the Anti-Trust act (and more so, enforcing it that way would destroy the US as an economic superpower and make us look like Zimbabwe very, very fast). I'll ask one of the JD's down the hall if you really want the long explanation on it, but the bottom line is that Anti-Trust is actually quite hard to prove.
How the hell do you think Microsoft is still in business if what you said was true?
quote:
It is a fact that a barrel of oil was less than $12 in 1998...and that is a conservative figure. Now it is often over $120..and that is conservative.
I can't believe their cost of processing has risen 1200 percent...sorry I don't care what those links say this is a blatant discrepancy. Someone... some company... somewhere... along the line is hiding their profits
Those 'companies' are named Saudi Arabia and Russia, to give you two examples.
quote:
Oh yeah, the free market is going to save us all!
Someday...
...could be a long wait.
I agree, because first we'd have to have one.
If we'd stop jacking around with alternative energy (nuclear, I'm looking at you, but to a lesser extent the rest), I think we'd be in much better shape. Restricting market alternatives leads to the ability to engage in monopolistic pricing.
Big shock, huh?
Also, for those squawking about the cost of production, be very careful how to you compute that for the oil industry. As someone who has done significant analysis on investment in that industry, I would say that cost of exploration (as in, finding and bringing new reserves into the fold) is often the lion's share of expense in terms of production, and then refining development and maintenance is a significant expense for producing vehicular quality gas.
If you want to compute a comprehensive cost of production, oil is still quite profitable in many ways, but not ridiculously so. Certainly nothing like Google has been, say.
Disclosure: I own stock in Google.
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Send lawyers, guns, and money.
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RE: Should We Litigate With Gas Companies? - 
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....I just say...."Thank you so very much for your money....was it as good for you as it was for me?" 
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