# Mild Fossil Fuel Rant **URL:** \ **Category:** The BBQ Pit\ **Created:** [January 31, 2006, 7:00pm UTC](https://boards.straightdope.com/t/mild-fossil-fuel-rant/342390 "2006-01-31T19:00:20Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![HelloKitty](https://avatars.discourse-cdn.com/v4/letter/h/ecccb3/32.png) [@HelloKitty](https://boards.straightdope.com/u/HelloKitty)\ **Post date:** [January 31, 2006, 7:00pm UTC](https://boards.straightdope.com/t/mild-fossil-fuel-rant/342390/1 "2006-01-31T19:00:20Z")
So was there another hurricane that wiped out oil production recently? I was just wondering because overnight, gas went up again by 15 cents!!! It is $2.29 per gallon here in KS. Just the other day I bought it for $2.14. Kinda strange that it’s the highest price since Katrina in these parts and the State of the Union is tonight…I’m sure it’s just a coincidence, though. 😉 Can I just be pissed off about this for awhile? For those of you who feel compelled to compare the price of a gallon of gas to the price of a gallon of AquaFina bottled water can ya just hold off for a few hours? Pleeeease?? ---
**Author:** ![Bosda\_Di\_Chi\_of\_Tricor](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bosda_di_chi_of_tricor/32/16845_2.png) [@Bosda\_Di\_Chi\_of\_Tricor](https://boards.straightdope.com/u/Bosda_Di_Chi_of_Tricor)\ **Post date:** [January 31, 2006, 7:08pm UTC](https://boards.straightdope.com/t/mild-fossil-fuel-rant/342390/2 "2006-01-31T19:08:27Z")
Disruption in Africa & South America. Nigeria [http://news.bbc.co.uk/2/hi/africa/4661054.stm](http://news.bbc.co.uk/2/hi/africa/4661054.stm) Venezuela [http://news.bbc.co.uk/2/hi/americas/4664502.stm](http://news.bbc.co.uk/2/hi/americas/4664502.stm) ---
**Author:** ![zenith](https://avatars.discourse-cdn.com/v4/letter/z/e19b73/32.png) [@zenith](https://boards.straightdope.com/u/zenith)\ **Post date:** [February 1, 2006, 3:56am UTC](https://boards.straightdope.com/t/mild-fossil-fuel-rant/342390/3 "2006-02-01T03:56:55Z")
My rant is with the seeming crooks west of the Missouri who charge 20 cents/gal. more than you can buy the same gas for in Iowa, even though Iowa’s gas tax is a mere nickel less than Nebraska’s. I know that the BP terminal from which most gas in these parts comes, regardless of the brand on the pump, is on the Iowa side, but does it really cost a whole 15 cents/gal. more to truck it over the bridge? ---
**Author:** ![samudra](https://avatars.discourse-cdn.com/v4/letter/s/13edae/32.png) [@samudra](https://boards.straightdope.com/u/samudra)\ **Post date:** [February 1, 2006, 4:04am UTC](https://boards.straightdope.com/t/mild-fossil-fuel-rant/342390/4 "2006-02-01T04:04:09Z")
> [@zenith](#): > > My rant is with the seeming crooks west of the Missouri who charge 20 cents/gal. more than you can buy the same gas for in Iowa, even though Iowa’s gas tax is a mere nickel less than Nebraska’s. > > I know that the BP terminal from which most gas in these parts comes, regardless of the brand on the pump, is on the Iowa side, but does it really cost a whole 15 cents/gal. more to truck it over the bridge? It may not be the same gas. Some states require different formulations. I belive there are also different formulations for winter and summer gas. ---
**Author:** ![An\_Arky](https://avatars.discourse-cdn.com/v4/letter/a/87869e/32.png) [@An\_Arky](https://boards.straightdope.com/u/An_Arky)\ **Post date:** [February 1, 2006, 1:39pm UTC](https://boards.straightdope.com/t/mild-fossil-fuel-rant/342390/5 "2006-02-01T13:39:02Z")
Meanwhile, ExxonMobil reported record profits for the past year. Not record profits for ExxonMobil, but record profits for any US company, ever. [Cite](http://www.macon.com/mld/cctimes/business/13753916.htm?source=rss&channel=cctimes_business). Obviously, they don’t care if they tank the US economy, as long as they profit. Fuckers. ---
**Author:** ![jjimm](https://avatars.discourse-cdn.com/v4/letter/j/ba8739/32.png) [@jjimm](https://boards.straightdope.com/u/jjimm)\ **Post date:** [February 1, 2006, 2:02pm UTC](https://boards.straightdope.com/t/mild-fossil-fuel-rant/342390/6 "2006-02-01T14:02:22Z")
Over here in the UK, the bastards seem to calculate the profit as a proportion of the price _after overheads_: thus any rise in taxation, excise, or gross barrel cost, and the oil company’s profits go soaring. They have a captive market and they can fuck us with a rusty fork all they like. That’s why, for once, I agree with your president: > [@George W. Bush](#): > > And here we have a serious problem: America is addicted to oil, which is often imported from unstable parts of the world. The best way to break this addiction is through technology. He’s a little late getting there, and perhaps I don’t agree with the reasoning for this conclusion, or the methodology of the solution, but on the whole I think it’s a good statement of intent. ---
**Author:** ![Bosda\_Di\_Chi\_of\_Tricor](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bosda_di_chi_of_tricor/32/16845_2.png) [@Bosda\_Di\_Chi\_of\_Tricor](https://boards.straightdope.com/u/Bosda_Di_Chi_of_Tricor)\ **Post date:** [February 1, 2006, 2:59pm UTC](https://boards.straightdope.com/t/mild-fossil-fuel-rant/342390/7 "2006-02-01T14:59:06Z")
> [@jjimm](#): > > Over here in the UK, the bastards seem to calculate the profit as a proportion of the price _after overheads_: thus any rise in taxation, excise, or gross barrel cost, and the oil company’s profits go soaring. They have a captive market and they can fuck us with a rusty fork all they like. That’s why, for once, I agree with your president:He’s a little late getting there, and perhaps I don’t agree with the reasoning for this conclusion, or the methodology of the solution, but on the whole I think it’s a good statement of intent. It’s **not** a statement of intent. He’s just making Populist noises, to quiet the masses. I do not feel that he will follow through. ---
**Author:** ![JohnT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/johnt/32/15048_2.png) [@JohnT](https://boards.straightdope.com/u/JohnT)\ **Post date:** [February 1, 2006, 5:28pm UTC](https://boards.straightdope.com/t/mild-fossil-fuel-rant/342390/8 "2006-02-01T17:28:36Z")
> [@An Arky](#): > > Meanwhile, ExxonMobil reported record profits for the past year. Not record profits for ExxonMobil, but record profits for any US company, ever. [Cite](http://www.macon.com/mld/cctimes/business/13753916.htm?source=rss&channel=cctimes_business). > > Obviously, they don’t care if they tank the US economy, as long as they profit. Fuckers. Meanwhile, ExxonMobil reported paying record taxes this past year, an amount that exceeds their “profit” by 250% ($36 billion in profit vs. $99 billion in taxes.) [Cite](http://yahoo.brand.edgar-online.com/fetchFilingFrameset.aspx?dcn=0000034088-06-000025&Type=HTML). Obviously, “they” don’t care if the excess taxes tank the US economy as long as the government gets its fair share, nor does the press care to explain the simple basic financial realities that goes beyond reporting a single figure in a 18 page SEC filing, doing nothing but spreading ignorance. Fuckers. ---
**Author:** ![jjimm](https://avatars.discourse-cdn.com/v4/letter/j/ba8739/32.png) [@jjimm](https://boards.straightdope.com/u/jjimm)\ **Post date:** [February 1, 2006, 5:28pm UTC](https://boards.straightdope.com/t/mild-fossil-fuel-rant/342390/9 "2006-02-01T17:28:37Z")
> [@Bosda Di'Chi of Tricor](#): > > It’s **not** a statement of intent. He’s just making Populist noises, to quiet the masses. I do not feel that he will follow through. The masses? From the impression of US thought I get from the SDMB, environmentalism is largely scorned by the public - and I acknowledge that this board is perceived to be unrepresentatively skewed towards the “left” as regards the US political spectrum (though you all look like righties to me :p). Though actually I do remember a thread a couple of years or so ago saying the PNAC was now allying itself with the environmentalists, so maybe it shouldn’t be a surprise. ---
**Author:** ![Kimstu](https://avatars.discourse-cdn.com/v4/letter/k/ecd19e/32.png) [@Kimstu](https://boards.straightdope.com/u/Kimstu)\ **Post date:** [February 1, 2006, 5:48pm UTC](https://boards.straightdope.com/t/mild-fossil-fuel-rant/342390/10 "2006-02-01T17:48:17Z")
> [@JohnT](#): > > Meanwhile, ExxonMobil reported paying record taxes this past year, an amount that exceeds their “profit” by 250% ($36 billion in profit vs. $99 billion in taxes.) Are you claiming that ExxonMobil is actually **losing** money after taxes? Or that their overall tax burden is somehow getting worse? [ExxonMobil says otherwise:](http://www.nytimes.com/2006/01/31/business/31exxon.html?pagewanted=1&_r=1) > [@](#): > > Exxon Mobil said its overall profit climbed more than 40 percent last year, while its tax bill rose only 14 percent. > [@jjimm](#): > > From the impression of US thought I get from the SDMB, environmentalism is largely scorned by the public The American public is significantly [more environmentalist than the Bush administration](http://environment.about.com/b/a/233661.htm), at least: > [@](#): > > Sixty-two percent of Americans disapprove of the way President Bush is handling the environment and other domestic issues such as health care, education and energy, and 49 percent favor giving Democrats control of Congress in the next election, according to an AP-Ipsos poll conducted January 3-5, 2006. I think Bush is actually going to have to do something about this, or at least look as though he’s trying to. ---
**Author:** ![JohnT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/johnt/32/15048_2.png) [@JohnT](https://boards.straightdope.com/u/JohnT)\ **Post date:** [February 1, 2006, 6:05pm UTC](https://boards.straightdope.com/t/mild-fossil-fuel-rant/342390/11 "2006-02-01T18:05:37Z")
> [@Kimstu](#): > > Are you claiming that ExxonMobil is actually **losing** money after taxes? Or that their overall tax burden is somehow getting worse? [ExxonMobil says otherwise:](http://www.nytimes.com/2006/01/31/business/31exxon.html?pagewanted=1&_r=1) What I’m claiming is that there are far more “bigger” interests that have a financial stake in XOM’s operations than the shareholders. Yeah, they made a “whopping” 9% gross margin on sales… but the various taxes they paid were over 25% of sales, a number that never gets reported when the usual BS calls for a “windfall profits” tax comes about. ---
**Author:** ![Bosda\_Di\_Chi\_of\_Tricor](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bosda_di_chi_of_tricor/32/16845_2.png) [@Bosda\_Di\_Chi\_of\_Tricor](https://boards.straightdope.com/u/Bosda_Di_Chi_of_Tricor)\ **Post date:** [February 1, 2006, 6:07pm UTC](https://boards.straightdope.com/t/mild-fossil-fuel-rant/342390/12 "2006-02-01T18:07:00Z")
> [@jjimm](#): > > The masses? From the impression of US thought I get from the SDMB, environmentalism is largely scorned by the public - and I acknowledge that this board is perceived to be unrepresentatively skewed towards the “left” as regards the US political spectrum (though you all look like righties to me :p). > > Though actually I do remember a thread a couple of years or so ago saying the PNAC was now allying itself with the environmentalists, so maybe it shouldn’t be a surprise. The US public is quite pro-environment. But the Republican Party’s long-term record is anti, so I have to wonder about Bush’s degree of commitment. And don’t let a few outspoken voices on the SDMB get to you–most of us support the preservation of our natural environment, we just disagree on certain points. I, for example, still view the use of Hydroelectric power as a better alternative, even though it _does_ cause some localized problems. The reduction of emmissions/waste is to good to pass up, IMHO. ---
**Author:** ![JohnT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/johnt/32/15048_2.png) [@JohnT](https://boards.straightdope.com/u/JohnT)\ **Post date:** [February 1, 2006, 6:16pm UTC](https://boards.straightdope.com/t/mild-fossil-fuel-rant/342390/13 "2006-02-01T18:16:27Z")
[q]Exxon Mobil said its overall profit climbed more than 40 percent last year, while its tax bill rose only 14 percent.[/q] I didn’t see this earlier… No doubt true, but again, the figure for “overall profit” is much smaller than the figure for “overall taxes.” An analogy: Some little-populated county in Nevada might be the “fastest growing” county in the country but that doesn’t mean it will even approach Harris, Dade, or Cook counties in size. In 2004, XOM paid a total of $86,779,000,000 in taxes while earning $25,330,000,000 in profits on $298,000,000,000 in revenue. Those numbers increased by $12 billion, $10 billion, and 80 billion respectively for 2005. Some quick and dirty calculations shows that for every dollar increase in revenue over 2004 figures, XOM profited .125, and the government earned $.15 in taxes paid (the remainder is (simplifying here) COGS and O/H). My point: The worlds governments have a greater vested interest in XOM’s increasing revenues than the shareholders. They have to - they take more out of every dollar. Therefore, complaining about “greedy corporations” is completely missing the point - _everybody_ has an interest in rising gas prices, the worlds governments even more so than the corporate shareholders. ---
**Author:** ![An\_Arky](https://avatars.discourse-cdn.com/v4/letter/a/87869e/32.png) [@An\_Arky](https://boards.straightdope.com/u/An_Arky)\ **Post date:** [February 1, 2006, 6:31pm UTC](https://boards.straightdope.com/t/mild-fossil-fuel-rant/342390/14 "2006-02-01T18:31:29Z")
You incredulously make this point about taxes being higher than profits, but ISTM that is the case for nearly every entity in the US. My point being that companies operate happily and healthily with the tax rate highr than the profit margin. Apples and oranges. ---
**Author:** ![Kimstu](https://avatars.discourse-cdn.com/v4/letter/k/ecd19e/32.png) [@Kimstu](https://boards.straightdope.com/u/Kimstu)\ **Post date:** [February 1, 2006, 6:40pm UTC](https://boards.straightdope.com/t/mild-fossil-fuel-rant/342390/15 "2006-02-01T18:40:04Z")
> [@JohnT](#): > > My point: The worlds governments have a greater vested interest in XOM’s increasing revenues than the shareholders. That doesn’t explain why the US government has recently been trying to **decrease** ExxonMobil’s taxes. From the article I linked to earlier: > [@](#): > > Republican lawmakers were on the defensive on Monday. Not only are they under heavy pressure from party leaders and from the White House to kill the proposed tax on oil companies, but they also inserted more than $2 billion in additional tax breaks for oil and gas companies in the energy bill that Congress passed last November. Certainly, the more money an oil company makes, the more taxes it pays (assuming no new tax cuts), which is good for federal revenue. However, I think most people figure that a moderate decrease in the price of gasoline would let them save more in personal costs than they would lose in their share of federal tax revenue from the diminished oil company profits. And off the top of my head, I’d guess that they’re probably right. ---
**Author:** ![JohnT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/johnt/32/15048_2.png) [@JohnT](https://boards.straightdope.com/u/JohnT)\ **Post date:** [February 2, 2006, 5:23am UTC](https://boards.straightdope.com/t/mild-fossil-fuel-rant/342390/16 "2006-02-02T05:23:17Z")
> [@An Arky](#): > > You incredulously make this point about taxes being higher than profits, but ISTM that is the case for nearly every entity in the US. > > My point being that companies operate happily and healthily with the tax rate highr than the profit margin. > > Apples and oranges. There was nothing “incredulous” about it: I was mocking the post I quoted. I’ll try better next time. My point was, if people bothered reading the details they would realize that the very same government(s) that are “tsk-tsking” XOM’s “windfall profits” take more out of XOM than the shareholders themselves. This is even marginal - as I showed, for every dollar of extra revenue that XOM earns garners, the various world governments take 15% and the shareholders 12.5%. Also, “tax rates” and “profit margins” are two totally different entities and aren’t dependant upon each other. There is no correlation between the two as profit margins measure financial operating efficiency and tax rates measure the amount that efficiency is taxed. You could just as easily have a gross margin of 50% and a tax rate of 20% as you could have a margin of 0% (i.e., break-even) and a tax rate of 20%. The tax rate remains the same regardless of the profit margin. ---
**Author:** ![JohnT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/johnt/32/15048_2.png) [@JohnT](https://boards.straightdope.com/u/JohnT)\ **Post date:** [February 2, 2006, 5:37am UTC](https://boards.straightdope.com/t/mild-fossil-fuel-rant/342390/17 "2006-02-02T05:37:45Z")
> [@Kimstu](#): > > That doesn’t explain why the US government has recently been trying to **decrease** ExxonMobil’s taxes. From the article I linked to earlier: > > Certainly, the more money an oil company makes, the more taxes it pays (assuming no new tax cuts), which is good for federal revenue. However, I think most people figure that a moderate decrease in the price of gasoline would let them save more in personal costs than they would lose in their share of federal tax revenue from the diminished oil company profits. And off the top of my head, I’d guess that they’re probably right. Excepting a mention of the foreign tax credit, the article didn’t mention the impact of the tax cuts on XOM specifically, just the oil industry in general. And, of course, there were no numbers in which to allow the reader to make a judgement as to the value of the foreign tax credit - just an implication that it’s “wrong”, which is rather typical of the press: Don’t give the analysis, just give the emotions. Anyway, here is a simplified breakdown of XOM’s financials for the 4Q 2005: Revenues: 99,662 COGS: 63,224 Excise Taxes: 7,829 “Other” taxes: 10,871 Gross Profit: 17,738 Income taxes: 7,008 Net Profit: 10,710 $26 billion in taxes, $11 billion of profit on $100 billion in sales. If you lop off 1/2 of these figures, which do you think would effect gasoline prices more - the $13 billion that XOM doesn’t need to cover its tax bill or the $5.5 billion it doesn’t have to earn in order to make the operation worthwhile to the owners? From where I stand, 13 is always \> 5.5. ---
**Author:** ![Kimstu](https://avatars.discourse-cdn.com/v4/letter/k/ecd19e/32.png) [@Kimstu](https://boards.straightdope.com/u/Kimstu)\ **Post date:** [February 3, 2006, 2:53am UTC](https://boards.straightdope.com/t/mild-fossil-fuel-rant/342390/18 "2006-02-03T02:53:58Z")
> [@JohnT](#): > > If you lop off 1/2 of these figures, which do you think would effect gasoline prices more - the $13 billion that XOM doesn’t need to cover its tax bill or the $5.5 billion it doesn’t have to earn in order to make the operation worthwhile to the owners? From where I stand, 13 is always \> 5.5. But you’re assuming that any money that the oil company saves due to a tax reduction will go into gasoline price cuts rather than into increasing profits. I don’t think the average consumer is willing to make that assumption, and frankly I’m not sure I would either. But consumers **do** know that if an oil company is willing to directly reduce its profits by cutting the price of gasoline, that price reduction will be a direct financial benefit to them—and it won’t be significantly offset by the resulting decrease in their per-person share of federal tax revenues from the decreased profits. So you can see why it makes more sense from the consumer’s viewpoint to call for immediate price cuts and profit reductions, rather than demanding that the government cut taxes on oil companies and hoping that some of the company’s tax relief will trickle down into price cuts for their gasoline. ---
**Author:** ![Lightray](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lightray/32/391_2.png) [@Lightray](https://boards.straightdope.com/u/Lightray)\ **Post date:** [February 3, 2006, 3:35am UTC](https://boards.straightdope.com/t/mild-fossil-fuel-rant/342390/19 "2006-02-03T03:35:34Z")
The company I work for sells to, and buys from Exxon-Mobile. So we see a bit of their cost structure, and can glean more information from talking to some of their business people. Their record profits seem to have occurred for two reasons. First, there hasn’t been any new refining capacity built in the US in over twenty years. This was noted by some during the Katrina aftermath, but has since quietly gone back to obscurity. All of the US domestic oil companies prefer to spend their capital in Asia – markets in China and India are far more attractive investments. As a consequence, although US demand for gas and oil products has increased steadily, capacity has remained constant. For an oil producer, this is an ideal situation, since there’s little chance that prices will be determined by the lowest price competitor. (particularly since imported gas and oil have additional cost burdens imposed by the government). Second, recently every time crude oil prices have increased, the US government has released oil from the US strategic reserve. This keeps the price of crude oil down. But it is the _oil companies_ who benefit from cheaper crude oil. Consumers of gas and oil products have _their_ prices set by the limited refining capacity that serves them. Basically, if an oil company in the US isn’t making obscene profits right now, they are quite likely among the most incompetent businessmen around. ---
**Author:** ![Kimstu](https://avatars.discourse-cdn.com/v4/letter/k/ecd19e/32.png) [@Kimstu](https://boards.straightdope.com/u/Kimstu)\ **Post date:** [February 3, 2006, 3:48am UTC](https://boards.straightdope.com/t/mild-fossil-fuel-rant/342390/20 "2006-02-03T03:48:30Z")
> [@Lightray](#): > > For an oil producer, this is an ideal situation, since there’s little chance that prices will be determined by the lowest price competitor. (particularly since imported gas and oil have additional cost burdens imposed by the government). […] > > Consumers of gas and oil products have their prices set by the limited refining capacity that serves them. > > Basically, if an oil company in the US isn’t making obscene profits right now, they are quite likely among the most incompetent businessmen around. However, they can’t expect that position to endear them to the average US oil consumer. “Hey folks, we’re simply reaping the obscene profits that naturally result from the supremely uncompetitive market that we’ve managed to achieve for our product. Since we have you, our captive market, over a barrel (yuk yuk), it would be simply incompetent of us to refrain from screwing you as hard as we can. You wouldn’t want us to be incompetent, would you?” Nah, I don’t think that argument’s really gonna fly with the public. [Next page](https://boards.straightdope.com/t/mild-fossil-fuel-rant/342390.md?page=2)