# $2.00 Gas Coming?
**URL:** https://boards.straightdope.com/t/2-00-gas-coming/370795
**Category:** Great Debates
**Created:** [August 30, 2006, 3:04pm UTC](https://boards.straightdope.com/t/2-00-gas-coming/370795 "2006-08-30T15:04:21Z")
**Posts on this page:** 20
**Page:** 6
### Author:  [@gonzomax](https://boards.straightdope.com/u/gonzomax)
#### Post date: [September 8, 2006, 5:27pm UTC](https://boards.straightdope.com/t/2-00-gas-coming/370795/101 "2006-09-08T17:27:19Z")
You will not be swayed. Not now not ever. That wall does not come down.
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### Author:  [@gonzomax](https://boards.straightdope.com/u/gonzomax)
#### Post date: [September 8, 2006, 5:45pm UTC](https://boards.straightdope.com/t/2-00-gas-coming/370795/102 "2006-09-08T17:45:32Z")
[http://www.cbsnews.com/stories/2004/06/08/eveningnews/main621856.shtml](http://www.cbsnews.com/stories/2004/06/08/eveningnews/main621856.shtml) Energy execs are our friends and the companies love us.
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### Author:  [@bump](https://boards.straightdope.com/u/bump)
#### Post date: [September 8, 2006, 7:07pm UTC](https://boards.straightdope.com/t/2-00-gas-coming/370795/103 "2006-09-08T19:07:27Z")
> [@gonzomax](#):
>
> The 10 cents is easy to find.
You’re acting like a tard.
Renob is right… the oil companies are not making record profit margins at all.
Exxon made a 11% profit margin last year. Put simply, after they bring in all the money that they did, and pay out everything it takes to produce their products, pay their workers, etc… 11% of the amount brought in was profit.
By way of comparison, Johnson & Johnson, widely considered a socially responsible company posted a 21% profit margin last year. Anheuser-Busch, another company with a good reputation posted a 12% profit margin last year. Oracle, a software company without such a good reputation posted a 24% profit margin last year, and Southwest Airlines, the low-cost leader in airlines posted a 8% profit margin last year.
By those standards, Exxon isn’t making unreasonable profits. The magnitude of the profits may seem huge, but keep in mind, the revenues and expenses of the company are quite a bit larger. In Exxon’s case, they brought in 328 billion dollars, and only 36 billion of that ended up as profit.
Keep in mind, Exxon employs 83,000 people worldwide. This is a HUGE company by anybody’s standard, and consequently will have massive cash flows.
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### Author:  [@Precambrianmollusc](https://boards.straightdope.com/u/Precambrianmollusc)
#### Post date: [September 8, 2006, 8:02pm UTC](https://boards.straightdope.com/t/2-00-gas-coming/370795/104 "2006-09-08T20:02:54Z")
Just to add some numbers to \*\*bumps \*\* point above. The costs are huge. Deepwater drillships and drill rigs cost in the order of $350,000 per day to operate, I have heard numbers of up to 500K a day bandied around.
Deepwater production platform - 1 billion no problems. Deepwater pipeline back to shore, put me down for 3-4 billion. Exploration costs, well as an example Exxon piled over 120 million into a single well, and found zero, zip and nada. if you want to take 120 million dollar gambles then you need a large amount of cash flowing to make these risk worthwile.
The huge turn overs in cash get eaten up pretty quickly
Should be noted that the east cost refineries are not set up to take sour crude from saudi and even alaska. They typically take sweet crude from the gulf of mexico and Nigeria. Nigeria has had 750K BOPD shut in. That was affecting suplies to east coast refineries and hence the rise in gasoline prices. The spot market price could have been going anywhere for crude, if you cannot refine it then there is a limited supply of refined product available and so the price can be come disconected from the price of the raw material feedstock.
The refinery capacity in the US is very tight and the easing of the nigerian problems combined with the reduction in demand due to the end of the driving season may have as much to do with the drop in gasoline prices as any suspected colaboration between big oil and Bush inc.
cheers
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### Author:  [@Magiver](https://boards.straightdope.com/u/Magiver)
#### Post date: [September 9, 2006, 1:28am UTC](https://boards.straightdope.com/t/2-00-gas-coming/370795/105 "2006-09-09T01:28:54Z")
Didn’t expect it to go much under $2.25 but it’s already $2.20 here.
I heard on the radio that oil speculators lost a bunch of money in the market.
Awwww. Here, let me get you a towel to cry in, and would you wash my windshield with it when you’re done.
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### Author:  [@gonzomax](https://boards.straightdope.com/u/gonzomax)
#### Post date: [September 9, 2006, 1:29am UTC](https://boards.straightdope.com/t/2-00-gas-coming/370795/106 "2006-09-09T01:29:18Z")
[http://www.accuracy.org/newsrelease.php?articleId=1214](http://www.accuracy.org/newsrelease.php?articleId=1214) I dont have to listen to oil company execs. You people swallow every thing they say and repeat it verbatim. I am proud of your fine memories. Saying it can cost 350 mill for a well. Thats a lot of money to us. It is nothing to a giant corporation. I figured when the execs were called in front of congress somebody would blindly believe everything they said. Now I know who. I dont even include sites that say they are making more than these. But it doesnt matter. Your minds are made up .
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### Author:  [@Magiver](https://boards.straightdope.com/u/Magiver)
#### Post date: [September 9, 2006, 2:13am UTC](https://boards.straightdope.com/t/2-00-gas-coming/370795/107 "2006-09-09T02:13:19Z")
> [@gonzomax](#):
>
> [http://www.accuracy.org/newsrelease.php?articleId=1214](http://www.accuracy.org/newsrelease.php?articleId=1214) I dont have to listen to oil company execs. You people swallow every thing they say and repeat it verbatim. I am proud of your fine memories. Saying it can cost 350 mill for a well. Thats a lot of money to us. It is nothing to a giant corporation. I figured when the execs were called in front of congress somebody would blindly believe everything they said. Now I know who. I dont even include sites that say they are making more than these. But it doesnt matter. Your minds are made up .
Not sure where your stipulations are going here. Profits are not some mythical beast that eats the souls of little people. They are printed in black and white on the balance sheets of every company that sells stock. Oil companies do not represent an investment with a high rate of return. We’ve gone over this many times. Profit and net profit are not the same thing. You can have huge increases in gross profits and lose money. They are not directly related to each other. The only number that means anything is NET PROFIT.
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### Author:  [@jshore](https://boards.straightdope.com/u/jshore)
#### Post date: [September 9, 2006, 3:06am UTC](https://boards.straightdope.com/t/2-00-gas-coming/370795/108 "2006-09-09T03:06:59Z")
**gonzomax** : I really don’t understand what you are going on about here. I’m as anti-corporate as anyone on these boards but I think we’ve got bigger things to worry about than whether the price of gas is too high. The best way to fight high gas prices is to reduce your demand: drive less, buy a hybrid, …
If you want to blast Exxon for something, better to point out how they fund a bunch of junk science and political hogwash in regards to global warming. That’s why I have an [Expose Exxon](http://exposeexxon.org/) bumper sticker on my car.
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### Author:  [@gonzomax](https://boards.straightdope.com/u/gonzomax)
#### Post date: [September 9, 2006, 4:20am UTC](https://boards.straightdope.com/t/2-00-gas-coming/370795/109 "2006-09-09T04:20:48Z")
I cae less about their high profits than I do about their lying about it. Why would they? What are they hiding . I said net profit is what counts. Another poster insists the profit per gallon is the factor. 10 cents.
Magiver ,are you familiar with the creative accounting that goes on today. Enron and others show how pervasive it is. Our multinationals base themselves in Caimans to avoid taxes. I just want the truth. Energy is not a obscure thing that we should ignore. It is too important to the peoplle trying to survive. They tell the truth , I will be happy.
If they admitted they are clearing 24 % profit and gas prices are slowing the country down. Even some of these posters would get upset.The fact that they can move the prices ,thats another story.
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### Author:  [@Least\_Original\_User\_Name\_Ever](https://boards.straightdope.com/u/Least_Original_User_Name_Ever)
#### Post date: [September 9, 2006, 5:41am UTC](https://boards.straightdope.com/t/2-00-gas-coming/370795/110 "2006-09-09T05:41:45Z")
> [@NaturalBlondChap](#):
>
> Just to add some numbers to \*\*bumps \*\* point above. The costs are huge. Deepwater drillships and drill rigs cost in the order of $350,000 per day to operate, I have heard numbers of up to 500K a day bandied around.
> Deepwater production platform - 1 billion no problems. Deepwater pipeline back to shore, put me down for 3-4 billion. Exploration costs, well as an example Exxon piled over 120 million into a single well, and found zero, zip and nada. if you want to take 120 million dollar gambles then you need a large amount of cash flowing to make these risk worthwile.
> The huge turn overs in cash get eaten up pretty quickly
>
> Should be noted that the east cost refineries are not set up to take sour crude from saudi and even alaska. They typically take sweet crude from the gulf of mexico and Nigeria. Nigeria has had 750K BOPD shut in. That was affecting suplies to east coast refineries and hence the rise in gasoline prices. The spot market price could have been going anywhere for crude, if you cannot refine it then there is a limited supply of refined product available and so the price can be come disconected from the price of the raw material feedstock.
>
> The refinery capacity in the US is very tight and the easing of the nigerian problems combined with the reduction in demand due to the end of the driving season may have as much to do with the drop in gasoline prices as any suspected colaboration between big oil and Bush inc.
>
> cheers
What do the great expenses of daily drilling mean when they’re so offset by such a gaudy amount of profits? Are you just simply saying that the oil industry has inflated costs of running and, therefore, inflated profits (or losses)?
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### Author:  [@squeegee](https://boards.straightdope.com/u/squeegee)
#### Post date: [September 9, 2006, 6:11am UTC](https://boards.straightdope.com/t/2-00-gas-coming/370795/111 "2006-09-09T06:11:52Z")
What I can’t believe is that we’ve gotten to the point where $2/gal gasoline is considered _inexpensive_.
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### Author:  [@Bosda\_Di\_Chi\_of\_Tricor](https://boards.straightdope.com/u/Bosda_Di_Chi_of_Tricor)
#### Post date: [September 9, 2006, 12:33pm UTC](https://boards.straightdope.com/t/2-00-gas-coming/370795/112 "2006-09-09T12:33:35Z")
$2.59 range, here.
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### Author:  [@bump](https://boards.straightdope.com/u/bump)
#### Post date: [September 10, 2006, 3:16pm UTC](https://boards.straightdope.com/t/2-00-gas-coming/370795/113 "2006-09-10T15:16:50Z")
> [@gonzomax](#):
>
> I cae less about their high profits than I do about their lying about it. Why would they? What are they hiding . I said net profit is what counts. Another poster insists the profit per gallon is the factor. 10 cents.
> Magiver ,are you familiar with the creative accounting that goes on today. Enron and others show how pervasive it is. Our multinationals base themselves in Caimans to avoid taxes. I just want the truth. Energy is not a obscure thing that we should ignore. It is too important to the peoplle trying to survive. They tell the truth , I will be happy.
> If they admitted they are clearing 24 % profit and gas prices are slowing the country down. Even some of these posters would get upset.The fact that they can move the prices ,thats another story.
Funny, I show that Exxon is incorporated in the US, and is headquartered in Irving, TX (and indeed they are… I drive by their HQ every day going to and from work)
Furthermore, they paid 23 billion in income taxes and 30 billion in excise taxes last year. That’s more than the profit they made last year.
Gonzomax, you’re just convinced that these companies are absolutely crooked, and no amount of rationality will show you otherwise. Apparently you aren’t aware of the fairly stringent controls on public companies- it’s why the Enrons and Health Souths get investigated.
And… you make it sound like not wanting to pay taxes through legal means is somehow wrong. By way of analogy, you’re saying that you wouldn’t take a legal tax credit for yourself to decrease the tax you pay? Companies aren’t any different in that regard- if they can move offshore and avoid taxes, why shouldn’t they? If I can legitimately list my home as a farm by having 3 cows, why shouldn’t I?
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### Author:  [@gonzomax](https://boards.straightdope.com/u/gonzomax)
#### Post date: [September 10, 2006, 4:41pm UTC](https://boards.straightdope.com/t/2-00-gas-coming/370795/114 "2006-09-10T16:41:13Z")
You are convinced corporations are our friends. I beleieve if we dont watch them closely they are capable of anything. Vigikance. regulation. Ever hear of the banking disaster a few years ago when the economy almost came tumbling down. Ever hear of corporations buying sewer systems in German countries to avoid taxes. Write off the maointenance.
When the regulations are evicerated and the corporations provide the people running the agencies ,I worry.Hope you are comfortable with it. I am not.
Corporations are needed, the governments responsibility to oversee. They are not.
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### Author:  [@diggleblop](https://boards.straightdope.com/u/diggleblop)
#### Post date: [September 10, 2006, 4:58pm UTC](https://boards.straightdope.com/t/2-00-gas-coming/370795/115 "2006-09-10T16:58:32Z")
It’s all for elections. that’s it.
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### Author:  [@Meursault](https://boards.straightdope.com/u/Meursault)
#### Post date: [September 10, 2006, 5:04pm UTC](https://boards.straightdope.com/t/2-00-gas-coming/370795/116 "2006-09-10T17:04:04Z")
> [@Renob](#):
>
> I love it how some people think that oil prices are set by some GOP cartel that is only interested in winning elections and killing the electric car. Sorry, folks, as much as you might not like to think it, oil prices are pretty much due to supply and demand (and, of course, a large dose of government intervention that drives up prices anywhere from fifty cents to a dollar a gallon, but that’s a topic for another post). Supply now looks more secure than it did in the past and prices are falling. Furthermore, demand is also falling due to the fact that the summer driving season is coming to an end. It’s not a conspiracy, people. Get a grip.
Nice to hear a voice of reason in a world where 1/4 of Americans think the US Government had a hand in 9/11.
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### Author:  [@El\_Kabong](https://boards.straightdope.com/u/El_Kabong)
#### Post date: [September 10, 2006, 5:15pm UTC](https://boards.straightdope.com/t/2-00-gas-coming/370795/117 "2006-09-10T17:15:34Z")
> [@](#):
>
> You are convinced corporations are our friends.
**gonzomax** , kindly stop misrepresenting the arguments people have made here. The question under discussion is whether there is some hidden means by which the publicly-traded companies of the US oil industry are deliberately raising (or in this case, lowering) retail gasoline prices, as a cartel. Your response so far has been an endless series of _non sequiters_ about the evils of corporate America and sewer systems in Germany.
What people have been asking you for is some sort of factual evidence that retail gasoline prices are being manipulated by any specific party. To use just one example, what the hell does the failure of Enron have to do with gasoline price-fixing? You are aware that Enron was primarily involved in natural gas trading, right? What does the Chairman of ExxonMobil’s frankly obscene golden parachute have to do with gasoline price-fixing?
I’ve worked for an oilfield service company for more tha twenty years, and yet I personally would never agree that “corporations are our friends”, and I find your insinuations that I am promoting some sort of agenda on their behalf insulting. What I would like to see to see is some factual evidence of gasoline price-fixing and what I do object to, in concert with many on this board, is your repeated and tedious representations of superstition as fact. If you have no such evidence, as clearly seems to be the case, how about clearing the deck for someone who does?
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### Author:  [@gonzomax](https://boards.straightdope.com/u/gonzomax)
#### Post date: [September 10, 2006, 5:19pm UTC](https://boards.straightdope.com/t/2-00-gas-coming/370795/118 "2006-09-10T17:19:18Z")
The theme was whether gas was dropping to 200’ It was 2.33 this morning. It would seem thatbis likely.
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### Author:  [@El\_Kabong](https://boards.straightdope.com/u/El_Kabong)
#### Post date: [September 10, 2006, 5:27pm UTC](https://boards.straightdope.com/t/2-00-gas-coming/370795/119 "2006-09-10T17:27:31Z")
No, the theme is this:
> [@Spingears](#):
>
> Is this : 1. An attempted by the oil cartel to divert the US from a course toward self sufficiency with regard to oil? or
> 2. An attempt to influence the fall elections?
> 3. Both of the above?
Your argument apparently is “Yes” to number 3 above, or else why would you have bothered to post all that bumpf about your suspicions cocerning corporations? Again, what is your evidence?
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### Author:  [@RaftPeople](https://boards.straightdope.com/u/RaftPeople)
#### Post date: [September 10, 2006, 5:38pm UTC](https://boards.straightdope.com/t/2-00-gas-coming/370795/120 "2006-09-10T17:38:12Z")
**gonzo** , demand isn’t flat or going down according to stats I see. Most of the oil companies had large increases in sales in 2005 (Exxon went from 75b in 4q04 to 100b in 4q05).
**Renob** , while Exxon’s sales increased 33%, profit rose 75%. I doubt they cut costs or became more efficient to cause that increase in profit percent. Something caused it. Probably increased demand sent prices a little higher than was warranted, maybe. But, it’s worth constantly being skeptical because companies and individuals are always trying to maximize their profits, sometimes through illegal means.
> [@El\_Kabong](#):
>
> If you are unable to clearly articulate a plausible mechanism for widespread price-fixing of either crude or refined products prices
E-mail?
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