industry, but as oil is directly related to national security, the country's entire economy, transportation infrastructure and every America's standard of living... has it come to a point that Enron-like profiteering and price gouging of consumers will result in a major problems for our overall society? Should private business continue to control a resource that is so heavily tied to our entire existence?

4/19/2006 8:02:46 PM

ehh trading oil company big wigs for former oil company big wigs in government

i dunno

4/19/2006 8:08:47 PM

but at least government big wigs are limited by governmental pay scales

and any profits could be diverted to the public good, such as paying down the public debt or paying for social programs / education, or even reducing taxes

4/19/2006 8:11:25 PM

yea boy that's just a fantastic idea to move corruption from a prosecutable and public arena to a secretive and protected government shelter!1

4/19/2006 8:13:26 PM

Do you want gasoline shortages and bureaucratic red tape every time you try to fill up your tank? Does the idea of our national government paying Iraq and Saudi Arabia billions of dollars every day appeal to you?

It's not like federalizing the industry would change the fact that we have to get some of our oil from shitholes like OPEC, and that supply and demand will continue to dictate prices.

This is just a horrible idea all around.

4/19/2006 8:25:23 PM

Quote :

"that's just a fantastic idea to move corruption from a prosecutable and public arena"

I'd buy that if these guys actually got prosecuted. Did you see the last time they talked to these guys? A slap on the wrist wouldn't even begin to describe the magnitude in which nothing is done to them.

4/19/2006 8:27:38 PM

i would say it's like walking by and sneering at their wrists

but not even that

more like walking by and smiling while thinking about sneering at their wrists

4/19/2006 8:29:27 PM

yeah, after you do that, each of us will be given a quota and it will be more expensive because now you have to pay for the bureaucracy and govt has no incentive to run efficiently like an oil company bound by the rules of the free market.

you fucking socialists make me fucking sick. give everythign to the goddam government.

4/19/2006 8:31:10 PM

^^^Well, considering that wall street execs have been recieving long jail sentences left and right for things that most people don't even realize are crimes, I'd say it's only a matter of time if the oil execs are truly profiteering like you guys say.

As it is, consider me underwhelmed by the arguments so far.


[Edited on April 19, 2006 at 8:32 PM. Reason : 2]

4/19/2006 8:32:09 PM

fucking agriculture is more directly related to national security than oil. Lets go fucking nationalize that too. And while we're at it, computers are pretty important. Lets do taht.

I hate the slippery slope argument, but you people, once you start, you want to give the govt everything (see: France)

4/19/2006 8:34:44 PM

You act like there isnt a corrupt collaboration between the oil industry and the government already. Our President is a Texas oil man and the Vice was the CEO of Halliburton. We basically use our defense budget to subsidize foreign policy that ensures oil companies get the oil they need to continue making record profits. The US taxpayer pays a significant amount of their income to subsize these policies. The entire country deserves this money alot more than few rich assholes.

4/19/2006 8:38:28 PM

HEY I LOVE CONJECTURE! I LOVE PRESENTING WHAT I THINK TO BE TRUE!

You wanna be rich, bitch? Go make it for your fucking self. You climb the corporate ladder. You go fucking do it.

4/19/2006 8:40:43 PM

I'm sorry, what? Exactly how much oil are American companies pumping out of Iraq? Please back that up, or get the fuck outta here with your Micheal Moore conspiracy theories.

4/19/2006 8:41:55 PM

^ thank you. I thought we went to war over oil... well where the fuck is it? It's not here at $3 a gallon.

And I'm not even a supporter of the president/iraq war. I just think what scuba steve said is ridiculous.

4/19/2006 8:55:23 PM

Its apparent that big oils profit margins are increasing,and there are reports that producers are intentionally operating refineries under capacity and that the current prices still do not justify the prices at the pump. It is quite simply, the greatest fleecing of the worlds wealth in history. Its no different from Enron or any other corporate scandal except for the scale is several orders of magnitude higher.

4/19/2006 9:00:39 PM

Quote :

" Exactly how much oil are American companies pumping out of Iraq?"

60% of our oil is foreign, and if militants would stop bombing pipelines, they could pump more out. But to be honest, its in the oil industries best interests for the attacks continue. The more production capacity that is taken offline means that the prices continue to increase, so they make more money while providing less. The other 40% of oil we require can still be pumped out of our reserves here at home without the threat of bombings or political uprisings, and they can still charge the same rate as the oil that is shipped from the middle east. In effect, we multiplied the value of our reserves here, which means we pay the "terrorism" and "fear of disruption" premiums that plaque the international commodity markets, but we don't encounter the risks and don't enjoy the savings that we should enjoy from our domestically produced oil. If anything, by creating instability and supply disruptions, we have rewarded speculators.

Don't forget that American taxpayers have paid for Iraqs gasoline, paying Halliburton several dollars for a gallon of gas that they deliver to Iraqis that turn around and sell in Iraq for a few cents. A person can fill a luxury automobile with a 22 gallon tank for $1.75, while the US taxpayer pays the other $50-60 in subsidies and profits to the oil industry.

4/19/2006 9:24:53 PM

I say bomb the Indians and the Chinese.

That'll teach those fuckers to demand our oil.

4/19/2006 9:43:24 PM

Quote :

"Its apparent that big oils profit margins are increasing,and there are reports that producers are intentionally operating refineries under capacity and that the current prices still do not justify the prices at the pump."

Uh, I don't know what you have been reading but crack spreads are not that large (just last month they were negative, I made a thread about it). In other-words, refineries may be short but we are importing plenty of gasoline to cover the shortfall. The current price spike in gasoline/diesel has been driven predominantly by increasing crude oil prices.

That said, a tax levied upon crude production that you used to subsidize the sale of gasoline would work in the short-run. The long-run effects, however, are unpredictable. You would definitely see more SUVs on the road in the future than otherwise, other industries too would adjust by increasing oil consumption and reducing domestic oil production, driving imports higher than they otherwise would have been. How does this help national security?

Secondly, as per the topic of this thread, nationalizing the industry would be a nightmare. While most of the oil wells are owned by the major multinationals that still leaves a sizeable fraction that is small and highly speculative. The people that drill oil-wells in a McDonalds parking lot do not work for Exxon but are usually family businesses criss-crossing the country trying to drain more oil out of abandoned oil-wells and marginal-sites that are too small to justify the attention of the big-guys. While exxon obviously wouldn't miss the profits, most of these small and medium-fry businesses operate on slim profit margins as it is (usually they invest every cent earned into another well). Is it really in the best interest of this nation to eliminate the little guy by nationalizing the whole industry?

4/19/2006 11:31:16 PM

I dunno, man.

Is it really in our nation's best interest to subsidize the purchase of weapons that are intended for us?

[Edited on April 20, 2006 at 1:07 AM. Reason : I'm just sayin. I don't think either plan is in our best interest.]

4/20/2006 1:03:51 AM

Quote :

"yeah, after you do that, each of us will be given a quota and it will be more expensive because now you have to pay for the bureaucracy and govt has no incentive to run efficiently like an oil company bound by the rules of the free market."

Yeah, like the post office.

4/20/2006 1:17:21 AM

^ Worst example ever

4/20/2006 10:19:20 AM

^^ hahahahaaha self-pwned

4/20/2006 10:36:57 AM

The USPS gets how many tax dollars each year?

4/20/2006 10:48:08 AM

Quote :

"Worst example ever"

How so? They are completely self supporting, we don't have any sort of "stamp quotas", they proivde delivery and pick up service (a service that no other private industry can provide), and the operate just as smoothly as any other private business.

4/20/2006 10:53:37 AM

The post office was largely privatized long ago. It is kinda like most french companies where the managers have free reign of the company but the company is wholly or partly owned by the government. Kris is absolutely right that it opperates exactly like a private company in that is fails or suceeds freely in the marketplace. If only all government entities were operated this way.

4/20/2006 11:08:28 AM

Quote :

"Kris is absolutely right that it opperates exactly like a private company in that is fails or suceeds freely in the marketplace."

The post office is much different from a private company. For one it's a government sanctioned monopoly. The second is that it requires government approval for much of what it does, and a third would be that the post office can still be directly controlled by the government.

4/20/2006 11:18:33 AM

^,^^,^^^
you both deserve to have your TSB credentials revoked. you in particular LoneSnark -- I expect that kind of stupidity from Kris, but wtf were you thinking?

The USPS isn't self-supporting at all, it gets billions upon billions of $texas in bailouts every single fucking year, in addition to constantly hiking rates and providing shitty service. 

4/20/2006 11:27:06 AM

I support nationalizing the oil industry though. We could relive the 1970s all over again, and I'd be able to go the rest of my life without a liberal Democrat ever winning the presidency...

4/20/2006 11:28:14 AM

This seems to be a reasonable thread to pose this question.

I have never seen a good explanation of the mechanism by which the oil/gas companies are racking up big profit with the higher cost of oil. Of course the rising cost of gas makes sense because it is costing them more to buy oil, but why does that translate into mega profits? Seemsm like to me they could have been making mega profits just as easily when oil was cheaper?

And I can't understand how gas stations don't operate like a free market? I know that they don't make dick off of gasoline sales, but it seems like if one stations operated long enough (while keeping their tanks full) losing money off the gas sales but hopefully making it up on the conv. store stuff, the loss of business at other stations would force them to lower their prices too.

4/20/2006 11:35:47 AM

Quote :

"60% of our oil is foreign, and if militants would stop bombing pipelines, they could pump more out. But to be honest, its in the oil industries best interests for the attacks continue. The more production capacity that is taken offline means that the prices continue to increase, so they make more money while providing less. The other 40% of oil we require can still be pumped out of our reserves here at home without the threat of bombings or political uprisings, and they can still charge the same rate as the oil that is shipped from the middle east. In effect, we multiplied the value of our reserves here, which means we pay the "terrorism" and "fear of disruption" premiums that plaque the international commodity markets, but we don't encounter the risks and don't enjoy the savings that we should enjoy from our domestically produced oil. If anything, by creating instability and supply disruptions, we have rewarded speculators."

Holy shit, are you retarded, or just ignorant?

Econ 101.

Equilibrium.



Where supply meets demand, you have your equilibrium, market established price... eh, i'm not going to do all the technicalities.

Analogy.

You have a cannon. You want to shoot it the maximum distance (profit). At what degree do you angle it?

45 degrees of course because you'll maximize the distance at that angle.

Now say for some reason, your angle (prices) goes higher, say to 55 degrees. Your maximum distance is actually less than it was before.

OIL COMPANIES HAVE NO INTEREST IN CONTINUED TERRORISM! IT DISRUPTS THE MARKET, SHORTENS THE SUPPLY AND THEREFORE THEY SELL LESS OF WHAT THEY HAVE, ALTHOUGH AT A HIGHER PRICE, BUT STILL MAKE LESS MONEY.

The oil companies would be MUCH better off making MUCH HIGHER profit if the middle east were stable.

I'm not sure if that makes sense to anyone else but me. But I like it

4/20/2006 11:47:13 AM

TGD, my bad. I realized the post office received various kinds of subsidy (for carrying congressional mail, etc). But was under the impression that it wasn't that much. Could you provide a link to an estimate of about how much it gets and what percentage that is compared to its total revenues?

4/20/2006 11:47:47 AM

Didn't the gas lines start under Nixon?

I'm just sayin...

4/20/2006 12:27:46 PM

Quote :

"The USPS isn't self-supporting at all, it gets billions upon billions of $texas in bailouts every single fucking year, in addition to constantly hiking rates and providing shitty service"

http://www.usps.com/communications/organization/postalfacts.htm

Quote :

"We receive no tax dollars from the federal government for our operations. We are a self-supporting agency, using the revenue from the sales of postage and postage-related products to pay expenses."

Many people consider the USPS's service much better than UPS or Fedex, you can find the same stories on any of them. I like the USPS better for letter delivery, they pick up at my house.

Quote :

"The oil companies would be MUCH better off making MUCH HIGHER profit if the middle east were stable."

No they won't.

I'll give you an analogy. Let's say I want to buy your stuff from you and sell it at a higher price. Would you be more likely to sell it for a lower price if you were a crack addict or if you were sober?
It's in my best interest for you to be a crack addict so you need money. The same concept applies here.

4/20/2006 12:40:24 PM

Quote :

"The oil companies would be MUCH better off making MUCH HIGHER profit if the middle east were stable. No they won't. I'll give you an analogy. Let's say I want to buy your stuff from you and sell it at a higher price. Would you be more likely to sell it for a lower price if you were a crack addict or if you were sober? It's in my best interest for you to be a crack addict so you need money. The same concept applies here."

So you're saying that terrorism is equal to having a crack addiction?

Please log out and terminate your account now.

[Edited on April 20, 2006 at 12:53 PM. Reason : grammar ninja attack!]

4/20/2006 12:52:43 PM

dp

[Edited on April 20, 2006 at 1:01 PM. Reason : V]

4/20/2006 1:00:23 PM

In this case, the economic model you supplied is wrong because it is limited to a closed system, with a no growth projections. Here in the US, we can reduce the amount we use and conserve, but as long as record increases in demand come from China and India, the aggregate demand will not drop. You are looking at a linear model when the problem instead is exponential. We can all reduce the amount we use by 25 or 30% ect., but when the number of vehicles in the world doubles, any savings we achieve will grossly be outpaced by the increase in demand.

The market will eventually fight back to help find alternative technologies, but even alternative fuels such as ethanol will find that there are production restrictions that are related to the carrying capacity of the land. Ethanol is derived from corn, and corn is food, so the second picture details the model that the land can only produce so much food (or fuel) before it cannot support any further capacity. Scientists generally estimate at about the 9 billion mark we can no longer feed any additional people, and starvation coupled with massive famine and death becomes the norm. Which leads to an interesting ethical dilemma: Should we be using food for fuel if billions of people will starve to death because of it?


Oil demand as a logarithmic and not a linear function


The eventual end of growth of renewable resources (food and fuel)




[Edited on April 20, 2006 at 1:09 PM. Reason : .]

4/20/2006 1:01:13 PM

I wasn't assuming that the demand for oil is linear. What I am saying is that the laws of supply and demand nonetheless hold up.

Just because you're able to sell at a higher price with a decreased supply does not mean that you're making more money than you should. If the supply were steady and the demand were steady, then they could maximize profits by running production at the equilibrium price. Currently, that is not the case.

Because of the shortage in the supply (OPEC controlling the means of production) and because of the increased demand, you have a double shift along the supply demand curve along the lines of higher prices. This explains why gas is more expensive. If you want to analyze profits, then lets look at the math:

profits = revenue - expenses

The expenses are the cost of refining, barrels of crude, etc. The big increase here is with crude (now around $72 a barrel). But because the demand for energy is at the highest point ever, revenue is also up, through the rough actually. By minimizing their other expenses, refining costs, transport costs, drilling costs, etc, they can maximize profits much easier than undercutting the supply of oil and allowing less to be sold. As a rule, you want to sell as much as possible for as much money you can get as possible (the very definition of equilibrium).

Many of you think the oil companies are in bed together. Let me ask you this. If you're the president of an oil company, exxon, and a guy from ammoco or wherever comes to you and says, "Hey lets fix prices right here." You say, "sure ok." But you know that since the price is set artificially high, you can EASILY undercut him by selling at the market rate (and earn max profits by an increased customer base buying cheaper fuel). In the instance where there are like, 5, big oil firms in the country, they all have to be weary of setting prices because the others could easily break their word and earn $texas from it. There is no incentive to set prices because there is no incentive to honor those set prices when you could profit handsomley by undercutting your competition. This is how efficiency is created in the free market. Sell as much as you can at the highest price you can (whcih is constantly driven lower by the entrance of new firms doing things more efficiently and increasing the supply of the good in question).

The real problem here is that people see higher prices in gas and jump to conclusions. There are many market factors which determine the price of gas. Yes, the oil companies are making huge profits. And why shouldn't they? They ahve the hottest commodity on the market. You would EXPECT that someone selling something so valuable to so many would reap quite a large reward.

[Edited on April 20, 2006 at 1:28 PM. Reason : .]

4/20/2006 1:18:53 PM

wow...Kris actually posted propaganda straight from a website and expects everyone to take it as gospel...

personally I think the cheese is to blame for the higher gas prices, come visit my website!!1...

---

Quote :

"Kris: http://www.usps.com/communications/organization/postalfacts.htm"

Quote :

"TGD: http://www.google.com/search?q=postal+service+bailout"

---

Quote :

"Gamecat: Didn't the gas lines start under Nixon? I'm just sayin..."

Yes, but the price caps that led to the gas lines were implemented way back by FDR -- it's just the market price for gasoline was nowhere near the ceiling, so it had no effect beyond discouraging investment in exploration and production.

Of course they got lifted by Nixon/Ford too, and the gas lines went away...then our good friend Jimmy "Worst Pres and Ex-Pres Ev4r" Carter decided to put them back, ushering in Ronald Reagan

---

Quote :

"LoneSnark: TGD, my bad. I realized the post office received various kinds of subsidy (for carrying congressional mail, etc). But was under the impression that it wasn't that much. Could you provide a link to an estimate of about how much it gets and what percentage that is compared to its total revenues?"

I'm at work so I'll have to look when I get home, but the annual bailouts are hundreds of millions annually and then every so often they go for big-ticket bailouts like the $20,000,000,000.00 they tried to get in 2001 

4/20/2006 1:30:18 PM

Quote :

"Many of you think the oil companies are in bed together. Let me ask you this. If you're the president of an oil company, exxon, and a guy from ammoco or wherever comes to you and says, "Hey lets fix prices right here." You say, "sure ok." But you know that since the price is set artificially high, you can EASILY undercut him by selling at the market rate (and earn max profits by an increased customer base buying cheaper fuel). In the instance where there are like, 5, big oil firms in the country, they all have to be weary of setting prices because the others could easily break their word and earn $texas from it. There is no incentive to set prices because there is no incentive to honor those set prices when you could profit handsomley by undercutting your competition. This is how efficiency is created in the free market. Sell as much as you can at the highest price you can (whcih is constantly driven lower by the entrance of new firms doing things more efficiently and increasing the supply of the good in question)."

Execs at Infineon, Samsung, Hynix, and Micron -some of which are in jail now - and have also managed to pay the DOJ hundreds of millions of dollars in fines would argue that it is pretty easy to set prices on commodity products and get away with it for awhile.

4/20/2006 1:30:52 PM

Quote :

"The current price spike in gasoline/diesel has been driven predominantly by increasing crude oil prices. "

Which is due to instability partially caused by a Texas oil man.

[Edited on April 20, 2006 at 1:35 PM. Reason : ]

4/20/2006 1:35:31 PM

Quote :

"Of course the rising cost of gas makes sense because it is costing them more to buy oil,"

incorrect.

4/20/2006 1:37:14 PM

Oops I forgot, buying oil at $72 a barrel instead of $30 doesn't make expenses go up at all. What was I thinking?

I bet you can divide by 0, Excoriator.

I think TGD is my new favorite TDub poster. Finally, someone who realizes that gas lines were the result of government interference... price caps.

They lifted the cap and the lines went away OVER NIGHT.

4/20/2006 1:40:53 PM

my point is that the price of gas has risen at a rate faster than the price of oil

4/20/2006 1:42:15 PM

The statement as it stands isn't incorrect. Don't be lazy.

4/20/2006 1:44:52 PM

plz to understand supply/demand before making your points.

Of course they will. We have a two-sided shift in supply/demand. Increasing demand, decreased supply. Prices will go up higher than than the price of a single commodity (crude oil). Gasoline is the product of many goods and services across an array of markets. While heavily dependant on crude, it is not the only input into gasoline.

Plus, look at the disruption due to Katrina, etc. It's not just a simple linear problem as you assume it to be.

[Edited on April 20, 2006 at 2:00 PM. Reason : .]

4/20/2006 1:45:18 PM

Quote :

"Execs at Infineon, Samsung, Hynix, and Micron -some of which are in jail now - and have also managed to pay the DOJ hundreds of millions of dollars in fines would argue that it is pretty easy to set prices on commodity products and get away with it for awhile."

The key words there being "for awhile". Many things happen in the market that seem to violate the basic laws of supply and demand, but only in the short term as the market always tends to equalize. Any executive of an oil company, especialy now, would be a fool to get into a price fixing arrangement, because with gas prices as high as they are, the first company to sell at 5¢ below everyone else is going to get the money.

4/20/2006 2:18:02 PM

Quote :

"Any executive of an oil company, especialy now, would be a fool to get into a price fixing arrangement, because with gas prices as high as they are, the first company to sell at 5¢ below everyone else is going to get the money."

I'm not really a conspiracy theorist or anything, but the idea is they wouldn't be doing it now, but rather, have been doing it for years.

4/20/2006 2:21:00 PM

Quote :

"Of course the rising cost of gas makes sense because it is costing them more to buy oil, but why does that translate into mega profits?"

I wasn't being lazy. I was pointing out that the assumption your question was based upon was flawed.

4/20/2006 2:49:06 PM

Quote :

"The key words there being "for awhile". Many things happen in the market that seem to violate the basic laws of supply and demand, but only in the short term as the market always tends to equalize. Any executive of an oil company, especialy now, would be a fool to get into a price fixing arrangement, because with gas prices as high as they are, the first company to sell at 5¢ below everyone else is going to get the money."

Bingo, winner of the thread. Yes, the first company to undercut by a nickel will rake in all the money leaving the rest to dry. There is NO incentive to risk getting a little more profit over losing a whole lotta business. There is no sense to be made of that.

4/20/2006 2:55:43 PM

On a local scale, 5 cents might not be enough to convince people to buy at another station. I know if I had to drive across town and back to save an extra $0.50 or $1.00 a tank, it would'nt be worth it to me because I would probably use $2 or $3 in gas to do so.

4/20/2006 3:10:28 PM