Exploiting The Energy Market For Fun and Profit
// July 27th, 2006 // No Comments » // Business & Politics
Exxon-Mobil reported a record profit of $10 billion this past quarter (up 35%).
I know energy company profits are not a simple thing. It’s something only the egghead economists and energy analysts can truly understand.
You can’t just say that oil prices are artificially inflated in a government-protected monopoly that takes advantage of a wartime, deficit-spending economy to boost its profits to record numbers and put the squeeze on you and me in almost every aspect of our lives.
Oh wait… I guess I just did.
I know it’s not that simple, I know. But it just looks real bad for the oil companies.
Simply put, profit = income – expenses. In the case of the energy companies, it means revenue is outpacing the cost of doing business by a record margin. It’s safe to assume this is due most directly to the market price of oil, rather than reductions in the cost or pace work in other areas or the energy production life-cycle.
While supposedly “driven by anxiety over supplies from the Middle East” (which could be argued at any point in modern history), that alone can hardly justify what’s going on. Calling for a “windfall tax” on the oil company profits is surely the very least our Congress could do.
I had a guy tell me yesterday that the price of stainless steel kitchen appliances are skyrocketing because (don’t ask me how or why, but…) gasoline is used in the manufacturing process (presumably more directly than in the distrubution process). I’ve even seen resturants raising their prices to cover the gas surcharges their suppliers are hitting them with.
Most people only see the effect when they fill up their cars, but we pay the price for these “profits” in almost every monetary transaction that occurs.
“Big oil” is protected from on-high by governments all over the world. It isn’t going anywhere. But the public can make a difference by increasing demand for energy-efficient technologies.
I just realized yesterday that our energy company has a plan we could elect that uses 100% renewable energy sources. They claim that the pollution saved by using this plan is the equivalent of planting 1,100 trees per year. It is slightly more expensive than other plans, but for me anyway, it’s a worthwhile exchange.
Energy-resources will always cost us because there will always be money to be made. But at least we can do something to make the by-products of our consumption less destructive to the world we’re leaving to our children.
