OK, even though my head is hurting (figuratively, not literally) from repeatedly hitting it against the brick wall of word meaning redefiners and tax incentive deniers and those so blinded by ideology that they will not see/comprehend, I thought the following information/facts may be in order.
Yes, "Big Oil" profits are up, but before decrying profits consider these facts:
- Miles driven: This source provides a graph of total miles driven by year from 1956 through 2010. We see that in 2009 and 2010 the miles driven actually fell. It takes a lot to make Americans drive less. But this graph clearly illustrates that miles driven has increased. Therefore the demand for gasoline has increased Does demand affect price?
As this graph shows, as demand increases, with supply constant (see below), price increases, but not necessarily profit. (scroll down about 3/4th of the way, look for the "Shift in demand for beer" graph) I can't help you if you are "economically challenged" (that's PC for don't know about economics) But profits keep increasing despite a miles driven decrease. How is that possible? Well, when one considers that (1) profits from gasoline sales comprises less than 3% of total profits, (2) the price of oil has not dropped, and (3) demand worldwide is up, then profit increases are quite feasible.
- Automobiles and Vehicle Miles per capita: The U.S. Deparftment of Energy (USDOE) provides both a graph and table of the number of automobiles per 1000 people from 1900 through 2008. As you can see the number of cars per 1000 people has grown, and continues to grow. USDOE provides a graph of vehicle miles per capita, also growing. Because the number of automobiles and the vehicle miles is increasing, the demand for gasoline also increases. And as illustrated above, there is a relationship between demand and price/profit.
- Population: Google Public Data provides a graph of the population growth from 1980 through 2011. There are more drivers on the road as population increases, thus increasing demand and price/profit.
- "Big Oil" profit margin: In 2011, "Big Oil" profit margin of 6.2% ranked 114 of 215. That performance puts "Big Oil" in the middle of industries by profitability. In terms of dollar profit, the industry made record profits, but in terms of Return on Investment, the industry isn't such a great investment. However, dollar signs get people's attention much more than percent signs. People's attention turns into votes, and that gets Congress' attention. Congress wants to get re-elected, so they hold showboat inquires. This circus will go on until the people get educated. But that won't happen since many public school graduates can't even read their diplomas, but they feel good about themselves.
- "Big Oil" taxes paid: Did you know that ExxonMobil, Chevron, and ConocoPhillips, the three largest domestic "Big Oil" companies paid, in 2010, over $42 billion in taxes. If we compare taxes paid by these companies in 2008 to individuals (the latest year available), the three companies paid $68.9 billion, more than the first 48 million individual tax payers.While ExxonMobil did not pay income tax in 2010, there are some factors to consider:
- ExxonMobil paid more than $15 billion in income tax payments to foreign countries in 2010. US tax codes allow companies to take deductions for taxes paid to foreign countries.
- Before all you lobby critics get vocal, consider this fact (and the next entry in this list): The US got money from ExxonMobil in several other ways, including sales taxes and duties.
- General Electric, whose president, Jeffery Immelt, is a big Obama donor, didn't have to pay any income tax in 2009, because the GE financial services division lost money, giving GE a tax break it used to offset income from its other business lines. GE also made most of its profit overseas, where it can defer taxes indefinitely, and it can deduct taxes paid to foreign countries.
- Exxon said that they made a 7 cents profit in 2010 on each gallon of gasoline and other finished product sold here in the US. Meanwhile, the government (all levels) levied an average 48 cents per gallon tax, or 700% MORE than the producers.
- Effects of Obama's Policies on oil supply:
- 120 million barrels annually lost because of the 2009-2012 Gulf of Mexico exploration/drilling moratorium
- 830 thousand barrels per day lost because Obama blocked the Keystone XL pipeline
- 11% decrease in oil production on public lands in 2011
- 23% drilling approval rate in 2012
- 73% historical drilling approval rate
- Obama's inauguration Day, 2009: gasoline was $1.92 a gallon. Today, it is $3.72 a gallon.
But wait! When it comes to "Big Oil," in 2009 Obama lent billions of dollars to Brazil's state-owned oil company, Petrobras, to finance exploration of the huge offshore discovery in Brazil's Tupi oil field. Brazil was supposed to supply the US with cheap oil. Obama orchestrated an up to $10 Billion dollar loan to Brazil for Brazilian oil. But Petrobras somehow went broke and to survive it sent the oil we financed to China. Petrobras got a $10 billion loan from China, then said it would give preference to Chinese companies in using the loan for the purchase of goods and services and also announced it will pay back part of the loan with proceeds from the sale of oil to China. And guess who invested in Petrobras before all of this occurred? None other than billionaire hedge fund manager/major Barack Obama fundraiser (wait for it...) George Soros. And in 2012 Obama killed the Keystone XL pipeline.