This blog has been at a grinding halt for a long time since Adam's entrance into the fray. Recently this blog has seen less activity than my relationship status on Facebook. Where is Ashley? Did she give up on the blog? If she doesn't respond to a posting about oil profits, she is most certainly dead. At least to me, anyway.
Last month lawmakers called in top oil executives in front of the Senate Judiciary Committee to have them defend the industry record profits. What resulted was record political grandstanding. Lawmakers showed, that like normal Americans, they have no idea how gas prices work.
It is true that oil companies are making record profits. Last year Exxon Mobil made a staggering $36 billion on the bottom line. So its easy for people to equate high gas prices with oil companies gouging drivers. What people do not look at is profit margin. Exxon Mobil's profit margin is nothing special compared to some companies in other industries. Take a look at some of their profit margins:
Exxon Mobil: 10.04%
United Technologies (Carrier): 8.31%
General Electric: 13.01%
Urban Outfitters: 10.63%
Apple: 15.37%
Google: 25%
Now none of these companies has to answer to Congress b/c someone paid too much for an iPod or a $45 "The Pope is Dope" t-shirt. But gas is 3.20 a gallon (3.97 in California)! Nevermind that more oil is being sold than ever before, particularly to the booming Asian countries like India and China. Nevermind that oil is getting increasingly more scarce and expensive to find. Never mind that Americans refuse to buy cars that don't gobble a ridiculous amount of gas. Never mind that an oil refinery hasn't been built in America since a 175 lb Larry Moore was jamming out to Bee Gees tunes while sporting a mustache, white man fro, and leisure suit. Exxon Mobil is depriving us of our God given right to cheap gasoline!
And Congress is calling them out. The same people that levy a 18.4 cent tax a gallon tax on gas (total with state taxes averages out to be about 42 cents, and can't we put a tax on something less regressive instead, like yachts or spinning rims?). The same people that subsidize oil companies. The same people that have failed to do anything meaningful to promote cleaner burning fuels, like natural gas. What a bunch of clowns.
