Here is a link to a thread about a year ago (See post #17). See me defend oil companies.
http://www.airlinepilotforums.com/sh...?t=2835&page=2
Originally Posted by ryane946
I am as mad over high oil prices as anyone, but it is a misconception to think that oil companies are "gouging" everyone. Oil is a commodity traded on the open market, and prices are governed by supply and demand.
It is easy to look at an oil company that made a billion dollar profit and say they are overcharging. But that several billion dollar profit come on over $100 billion dollars in sales. Oil companies take a % percentage of profit from oil sales, and naturally as the price increases, the % percentage becomes a larger chunk of $$ money. Oil companies are monster corporations (remember they are vertically integrated) that makes huge profits, but look at their profits as a percentage of revenue, and it is like 8%. Imagine a pizza company, it cost them $0.92 cents to make a pizza, and they sell it for $1.00. Ya right!!! Most companies double or tripple the "cost" of the product and sell it for that price.
I don't mind paying $2.00 a gallon for gas. I pay more for milk, orange juice, etc... And I don't mind these companies making $40 BILLION dollar profits. I think it is great for the oil industry.
But our country is facing serious problems. HALF of our HUGE trade deficit comes from purchasing oil! And where do you suppose most this money goes... THE MIDDLE EAST!
Where do you think Iran is getting money to build a nuclear bomb? OIL.
Where do you think all these terrorists are getting money for guns/ammunition/rocket propelled grenades/surface to air missiles? OIL
Where do you think Hugo Chavez (Venezuela) is getting money for his weapons? OIL
Here is a list of countries with the largest (proven) oil reserves in the world:
1. Saudi Arabia
2. Canada
3. Iran
4. Iraq
5. Kuwait
6. United Arab Emirates
7. Venezuela
8. Russia
9. Libya
10. Nigeria
Gee, most of those are sworn enemies of the United States. HMM! And most of these countries are members of an organization called OPEC which we all feel so strongly about. They have a choke hold on our economy. All they need to do cut production just a little, and then oil prices go up, gas prices go up, our economy slows down, discretionary spending goes down, airlines especially take it up the @$$. Houston... We have a problem!
I am a conservative, but even so, I know a BIG reason why we are in the Middle East is to protect our country. Not just against terrorists, but against any supply disruptions in oil.
If there is anything our country learned from September 11th, it is not just that our freedom is vulnerable,
but the fact that our economy is vulnerable! It is a lot easier to attack. If we have no dependence on foreign oil, we wouldn't have to fight so much in the Middle East.
It is in our national interest to reduce our dependence on foreign oil. PERIOD!
Our economy would not be subjected to sudden swings in oil prices.
We would not be funding all these countries that are our enemies.
And we could stop fighting half of these wars in the Middle East!!!
Ok, so how do we reduce our dependence on foreign oil. There are several ways, but one simple way is to produce it all domestically. Yes, the United States has a finite amount of proven oil, but we have the WORLD'S LARGEST supply of oil shale. One Terabarrel (or a million, million barrels, enough to supply our country for well over 100 years) Oil shale is oil that can be produced given either 1) high enough prices to justify using it, or 2) an advance in technology to make it cheaper to produce.
Here is where my comment about reinvesting HUGE oil company profits into technology. If we invested 1/4, just 1/4 of the $40 BILLION dollars ExxonMobile made this year, we would be able to develop oil shale at the same cost as conventional oil. And our problems would be solved.
I believe these oil companies need a motivation to reinvest this money into technology that makes oil easier to find, cheaper to produce, and better for our country. So say, hey oil companies, any profits over $1 BILLION dollars we will tax at 70% UNLESS you reinvest it back into technology to do what I mentioned above. Ultimately this investment will NOT be passed along to the consumer because it will lead to cheaper/easier/better ways of finding/producing oil, and that will translate into lower prices. Not to mention OPEC, Iran Venezuela, etc... jacking up prices whenever they feel like it.
Invest these profits! Turn it into something useful. It is good for all Americans. Ok that's my rant. Let me leave you with a useful thought.
Science call solve problems a lot easier than politics can!!!