· Crude oil: 72 percent
Note: Distribution, Marketing, and Refining include about 4 cents on the dollar profit for the oil company. This represents the 4% “obscene profit margin” above costs that Congress is questioning them for.
"Congress should commit to the U.S., and people around the world, that we will resolve this issue of restricting supply once and for all," said John Hofmeister, president of Shell. Showing a willingness to exploit domestic resources would send an important signal and would "knock the futures market on its head." Hofmeister is saying that it would discourage traders from bidding up the price of oil based on a perception of tight supplies in the future.
If American oil companies completely eliminated their profit from gasoline sales, it would amount to a savings for the consumer of about 4c on the dollar or about 16c per gallon of gas at the current price of $4.00 per gallon. That is roughly one third of the savings that would result if Congress suspended the federal gas tax, which now costs us about 48c per gallon. If both were done, the best we could expect would be a about 64c per gallon decrease in gas prices at the pump. We would still be paying about $3.40 per gallon, so obviously the 16c profit is not the problem.
What kind of idiots have we elected to congress who don’t understand how the free market works, or that businesses are in business to make a profit - even as low as 4.0 percent? Congressional Democrats would like to see that profit taken away, or punish the oil companies for making it. By removing the profit from gasoline sales, we could all save 16c a gallon at the pump - what a relief that would be!
How about applying the same standard to the companies who are supporting these politicians with contributions to their campaigns in exchange for earmarks from the public treasury? I can assure you that the taxpayers would be saving a great deal more money than they would be by taking away oil company profits.
For many years in the recent past, American oil companies were just breaking even in gas sales. Now they finally are able to return some dividends to their millions of investors - and Democrats want to take that away. Some, with no understanding of how the free market works, have even suggested that the oil companies should operate at a loss. Rep. Maxine Waters (D-CA) even suggested, in pure communist style, that our oil companies should be nationalized and taken over by the government.
“And guess what this liberal would be all about? This liberal would be all about socializing — er, uh. [Pauses for several moments] …. would be about [pause, thinking, uh, er] basically [pause…] taking over, and the government running all of your companies.”
Brilliant! As if that would reduce the price of crude oil and the cost of gas. The word she was looking for is "nationalizing," to which the oil industry reps said, "we've seen this movie before. It's called Hugo Chavez, in Venezuela."
Waters, after revealing her communist views with one foot in her mouth, then proceeded to place both feet in the mouth and finish her statement to the shock of other Democrats on the panel, and to the amusement of Republican members who couldn’t keep a straight face. Undoubtedly, Waters was admonished after the hearing by Pelosi, Dean, Obama, and George Soros, for letting their communist views out of the bag in front of a national TV audience.
This kind of talk is either insane or so naive that it boggles the mind when we hear it coming from members of the United States Congress. Even if the government were running the oil companies, they would still have to pay the same price for the imported oil and refining. Then we could add to the current costs, the cost of the bureaucracy to administer the government oil program. Sure, they could lower the price at the pump while increasing taxes to pay the difference. Either way, we still have to pay it but it would give the government, in true Marxist fashion, the ability to redistribute the wealth by having those who pay taxes, pay for the gas of those who don‘t.
Do you realize how many Americans have money invested in our oil companies? The answer is - just about everyone who has money invested in any mutual fund or retirement program. By taking away the profit from the oil companies, those investments return zero. So what happens when companies are mandated by government to operate at a loss or zero profit?
Investors withdraw their money from that investment, and before long the company goes broke. The country is left with no one to provide the gas for our cars, fuel oil for home heating, aviation and jet fuel, Diesel fuel for the trucking industry, and a variety of other products produced by the oil companies who are responsible for providing our standard of living in America. All of these products would either disappear, or the price of importing them would be unaffordable to most Americans.
Do you remember when Jimmy "Mr. Peanut" Carter froze oil prices back in the 1970s? If you could find a gas station that had any gas, you had to wait in a line a block or more long to get it. Now Democrats want to bring back those days again. It’s simple economics. If there is no profit, there is no product.
This is a profit driven society whether Democrats like it or not. If they all want to move to a vacant island somewhere, where they can start their own country, write their own communist/socialist constitution and live by it, they have the freedom to do so. They do not have the right to destroy the Constitution and capitalist society that this country has lived by for over 230 years since it’s founding, and take away the freedom and liberty that our Constitution guarantees each and every citizen.
That leaves Americans with a simple choice. We can either thank the oil companies for providing gasoline for our cars and other products, at the best price they can, or we can do without gas and the other products, which seems to be what the liberals want.
Here's a thought: Why not just have the liberals get rid of their cars and use public transportation? That would reduce our oil consumption by about 25% right away which in turn, would reduce world oil demands which are now slightly higher than available supply. That in turn would reduce the cost of crude and result in lower prices at the pump for the rest of us. And since liberals have declared war on energy producers, including nuclear power plants, they should also stop using electricity.
Let them lead the way to the energy free life they so desire. Let them try it out first for a few years and then submit a government funded essay on what they've learned from their study. But they'll have to file the report with handwritten or manual typewriter written pages.
Liberals like to complain but are they willing to make the sacrifice to resolve their complaints? Not likely. Al Gore is a perfect example in his energy guzzling home, SUV, and private jet travels, yet he wants to deny us the ability to sustain our standard of living. I am sick of these liberal hypocrites.
People are asking what products are produced from a barrel of oil. Here is what comes out of one barrel, about 42 gallons of crude oil.
Jet Fuel 13.09%
Still Gas 5.71%
Fuel Oil 3.57%
All Others (plastics, lubricants, asphalt, etc.) 5.3%
Crude oil is a global commodity and is sold on the global market at the global market price. For every 5 barrels of oil the U.S. produces, we import 16 barrels just to meet our own domestic needs.
The U.S. uses 25% of all world oil produced. It’s not because we are hoggish and wasteful with oil. It’s because we are one of the most populous and technically advanced nations in the world. Everybody owns a car. Our lifestyle depends on abundant energy resources. That is one of the benefits of being American and what has made America the greatest nation on the planet. Now China and India are trying to catch up to our technical and industrial standard and are competing for the same oil. That has driven demands now slightly above the supply and contributed to the price increase.
Shell, Exxon-Mobil, and other U.S. oil companies cannot control the price of oil any more than the president can. Exxon owns only 2% of the world’s oil and cannot dictate price to the government owned oil giants of OPEC. But any one country with oil resources can lower the global price of oil by increasing their oil production.
President Bush had to go begging to the Saudis for an increase in oil production to help lower the price because our own Democrat controlled congress won’t allow it. We need new refineries. We need to open up new oil fields offshore and in Alaska. The Democrats in Congress for decades have said “no.“ and blocked any legislation to permit it. California and Florida continue to prohibit any drilling off their shores.
"Congress should commit to the U.S., and people around the world, that we will resolve this issue of restricting supply once and for all," said John Hofmeister, president of Shell. "Showing a willingness to exploit domestic resources would send an important signal and would knock the futures market on its head." Hofmeister is saying that it would discourage traders from bidding up the price of oil based on a perception of tight supplies in the future.
Why are these Democrats in Congress so ignorant to how a free economy works? Why are they so ignorant to the real problem of a domestic oil shortage, forcing us to buy foreign oil? Why do they refuse to face the reality that they have caused by blocking domestic oil production? Why do they insist on pointing fingers at the wrong people and accusing them of profiting at the expense of the American people? Why won't Congress allow the U.S. to increase our own production to bring down the cost of gas? Why are polar bears in Alaska giving a higher priority than the survival of the American way of life?
You'll just have to ask the Democrats in Congress and see if you can get a straight answer. Good luck. They prefer to badger oil company executives and blame gas prices on them in order to boost their own image in front of the TV cameras to impress the less informed liberals and make them think they are trying to do something about the price of gas in hopes of gaining their votes.