I feel very trollish starting this post.

Recently Congress had the CEOs of major oil companies to testify why they were making record profits. While it looks like windfall profits to me, it's worth jogging everyone's memory to 1998 (see article). Exxon and Mobil had not merged yet. They would as oil was not at $65 a barrel but only $13. The price needs to be $20 a barrel to break even for oil companies.

Oil companies are simply responding to the dynamics of a market-driven economy. We remember the pump prices in Sept 2005 better than 1998 becauce it was more painful. The energy industry was hurting in 1998, but the consumer was happy with the pump prices then....

Does this mean I think the free enterprise system should be replaced by a five-year Gosplan? Absolutely not. I see the problem as priorities, not economics.

The root problem is the American public has not mandated their elected leaders to implement a serious energy policy. CAFE standards are lenient. Gas guzzlers get bigger tax breaks than hybrids. More incentives are needed on alternative fuels.

You can speak of greedy energy companies and automakers. I won't necessarily disagree with their profit motives, but it starts with the consumer.

If the general public looked beyond next week and next month, they would buy the most fuel-efficient vehicle for their needs. Detoit would appeal to people wanting a practicle vehicle. We would not be hearing Cadilliac Escalade commericials that "tells the competition to get out of the way" and virtually says "it kicks their a$$'.

If the public thinks with their heads, not their glands, things will straighten out.

 

A lot of the problem has to do with the fact that consumers aren't presented with factual information about products. It isn't in the corporation's best interest to tell you about the consequences of buying a particular model, it's in their best interest to give you misleading and emotionally charged propaganda. If the public relations industry wasn't so massive and products were advertised with comprehensive factual information we would not be in the mess we are today, but neither would we have this glorious consumerism driven civilization. Something a little more sane and sustainable would be much more likely.

 

I think a lot of the problem is deferred gratification, peer pressure, etc. A lot of people to be seen driving a Suburban is more important than the gas bill that comes with it, etc. People eat frequently at fast foods, max out on their credit cards. They know what they are doing, but lack the will to change.

The last post does give me an idea. I'd love for comics on Saturday Night Live, etc. to spoof some of the SUV commercials. Feature a wrestler tout how a Dodge Ram beats the competiton "stone cold", how it kicks butt, gets respect and girls. Just expound real commericials a bit more and get people to laugh, then think of why they are responding to the appeals to power and sex.

 

About the CEO's on TV:
The U.S. consumes about 21 million barrels per day, and they get just under 20 gallons of gas per barrel, so that's about 420million gallons of gasoline burned every day.

Based on these charts:
http://www.energy.ca.gov/gasoline/margins/

46 cents per gallon profits to the oil companies
52 cents per gallon profits to the government

I thought it interesting that they'd post the oil companies business model to the public while they themselves continued to skim about a million dollars per day (Over the oil companies profits).
Perhaps their own books need going through as carefully?

Please don't get me wrong, questions need to be asked everywhere (oil execs shouldn't be immune either) but it seems like our State and local governments should put the citizens first.
Georgia suspended its gasoline sales tax for a couple of weeks, but not before the craze was already 2 days old and the stations were running out. (They couldn't deliver it fast enough for the extreme demand)

Delta Flyer wrote:
I believe you are right. Just look at driving habits today vs a month ago.

I understand they still believe the +30 year old coastally clustered refineries will last forever, and still refuse any further domestic oil explorations.

 

And not to garner more sympathy for them, but in ADDITION to the direct taxes on fuel, Uncle Sam gets nominally 35% of the profit from the oil companies, the particular states of incorporation similarly receiving their share. Say what you will about tax loopholes and big companies not paying enough, but a small piece of a large number is still a large number.

The single largest beneficiary of high fuel prices is the US Government. Good, bad, who cares- it just is.

 

This might be worthy of a topic in itself - How much the US spends on roads?

An earlier post states the government (Federal?) takes 52 cents per gallon.

I have a 25-mile commute to work. When traffic is bad, about 15 miles of that is on the Bush Tollway (Hwy 190). I'm charged $1.50. Discounting the staff to man the toll booths, etc., 52 cents per gallon probably does not cover the cost of all the roads and bridges....

 

Maybe it does...maybe it doesn't.

I calculated about 420 million gallons pumped per day, which made the government's take around eight million dollars per day.

I'm not exactly a math major and my calculations may be off.
But if I'm even remotely correct it seems to me at least quite excessive especially when the states are contributing as well as private funds in some cases.

They funded that $950 million pork barrel freeway project in Alaska and didn't blink.
You know, the freeway that led to and island population of 50 persons?
That would represent about 120 days of collected gasoline tax.

 

What I had read was that oil companies are not always profitable. Sometimes they have a good year and make a lot of money, but sometimes they have a bad year and don't make any money, in fact they lose money. That's how business works.

The government always has a good year. Some years are better than others, but the government ALWAYS takes your money, period. Since 1977, the federal government has made twice as much "profit" from road fuel as private corporations have. This is largely because of what I said about how the government doesn't have any such thing as a bad year. They take your money no matter what.

 

Hope you guess my name
But what’s puzzling you
Is the nature of my game
I stuck around st. petersburg
When I saw it was a time for a change
Killed the czar and his ministers
Anastasia screamed in vain
I rode a Hummer
Held a general’s rank
When the blitzkrieg raged
And the bodies stank
Pleased to meet you


....I shouted out,
Who killed the Kennedys?
When after all
It was you and me

....I shouted out,
Who used the oil?
When after all
It was you and me

 

This is a really good thread. I think all of you are right in part. There is one thing missing from the discussion - failure of LEADERSHIP. There has been no comprehensive energy policy in the US for how many decades? This is the biggest piece of the problem. The oil company execs are doing what their shareholders demand - maximize profits now. They cannot be trusted to develop alternative fuels unless they can control them. Why should they? Consumers have not been concerned because they either haven't been paying attention and/or energy has been so cheap they haven't cared. Why should they?

Shouldn't our government be balancing the competing interests of business and citizens for cheap/plentiful energy but also providing the incentives to develop alternative fuels so we can continue to be economically strong, even after the oil runs out in 2-4 decades (peak oil production is estimated to occur anywhere from 2015 to 2045).

I for one am extremely disappointed there is not a comprehensive crash program (like Apollo in the 1960's) to develop alternative fuels so when the peak is reached our kids and grand kids won't have to go to war to keep the lights on.