Yeah, about those oil company profits

New Hampshire Union Leader:

So, Exxon Mobil broke corporate records last week, posting a $9 billion profit on $100 billion in revenue in the third quarter. Right on cue, Democrats demanded that Washington confiscate some of those profits. Are they predictable or what?

[…]

Want to know who is making a bigger windfall than oil companies are making from the prices paid by the poor gasoline consumer? It’s good old Uncle Sam and his 51 little brothers.

Refining costs and profits combined make up about 15 percent of the cost of a gallon of gasoline, according to the U.S. Energy Department. State and local taxes make up almost double that, about 27 percent. (New Hampshire’s 18 cents per gallon fuel tax accounted for 7.2 percent of last week’s average gas price of $2.49 a gallon.)

State and local gas tax collections exceed oil industry profits by a large margin, according to a Tax Foundation study released last week. Since 1977, consumers have paid $1.34 trillion in gas taxes — more than twice the profits of all major U.S. oil companies combined during that same period. Last year, state and federal gas taxes took in $58.4 billion. Major U.S. oil company profits last year totaled $42.6 billion.

Want to make an immediate dent in gas prices? Cut gas taxes.
But of course cutting the fat from local, state, and federal bureaucracies isn’t the answer. It’s confiscation of private industry profits!
[Emphasis added. –R]

3 thoughts on “Yeah, about those oil company profits

  1. I don’t see this as gouging. Don’t get me wrong, I don’t like paying $2.30/gallon, but this isn’t gouging. Gouging is what happened in Atlanta when all the station owners went looney post-Katrina and started charging $6/gallon.
    If I have a problem with the oil company profits–and profit is not a dirty word–it would be that I don’t see what my extra buck a gallon is going toward. Thanks to the environmental extremists, we haven’t built a new refinery in this country in something like 30 years. I heard on the radio yesterday that our refinery capacity is actually operating at 20% above what everyone thought it would actually output. The problem isn’t necessarily getting crude oil; it’s refining the crude fast enough to get it to market to drive prices down. We need new refineries, and we need to start drilling our own crude again.
    There are oil shale deposits in Colorado, Utah, and Wyoming that puts the oil fields of Saudi Arabia to shame. In the past, harvesting oil shale hasn’t been worth the cost. However, Shell has a new process they’ve been testing for the past couple of years that drives down the cost of shale processing immensely, and the three states mentioned above could potentially provide our nation enough crude for the next two or three generations that we wouldn’t need any foreign oil.
    If I saw action on the part of the oil companies to lobby for new refineries (you would think with these new profits they could simply outspend the enviro-radicals), and the oil shale fields were opened up, I would be less miffed by the extra I pay at the pump. Technology has progressed to the point where we can drill for and refine oil with minimal environmental impact, and we should put that technology to the best use we can.

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