Both Exxon Mobil and Shell have posted huge gains in profits, even as prices continue to rise. Exxon has reported 36 percent increase in profits above what it reported a year ago. Shell reported a 40 percent rise in profit. These profits are happening as Americans are paying more at the pump. But as I have said before, prices don't necessarily have to come down. But what must happen is that that massive profits that have been made should go to help Americans, not just corporate leaders.
First, the government must stop giving subsidies to oil companies. If the oil companies are earning record profits than they DO NOT need any subsidies. Subsidies are given to help industries that could not perform and maybe even collapse if it was not for subsidies. One such example is many small farms in rural America. But oil and gas companies are not in threat of collapse and will make huge profits even without giveaways by the government.
Second, more money should be taxed. Currently many oil companies pay no money in royalties to the government when those companies pump oil and natural gas from federal territory. Over the next five years this is estimated to equal more than $7 billion in payments. That money would otherwise go to the government and help BALANCE the budget. Free market politics states no government interference with companies, but if the government gives away money to some industries they are playing favorites. This is hurting some while helping others. That is definitely NOT anything close to laissez faire and not close to social economic politics either. This is not a policy of any conservative or liberal. This is a policy of oil companies. It has no merits in economic terms for America or the government (unless you count re-election funds).
Finally, more money must be put into alternative fuels. Be it hydrogen, electric, hybrid or other technology. Common sense dictates that if something will run out, than there should be something to replace that something with. In this case oil must have alternative because oil will not last forever. If we put money into research now, than people can start to prepare to make lifestyle changes which do not depend on oil as much as now or lifestyles that don’t depend on oil at all.
Waiting on this issue cannot happen. Oil WILL run out; it is only a matter of time.
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2 comments:
Let's take a look at your first sentence:
"Both Exxon Mobil and Shell have posted huge gains in profits, even as prices continue to rise."
Almost all industries are able to make bigger profits when there is instability in pricing - - true when prices are going up and when prices are going down. It is in periods of stability that profits sag.
We see a similar situation in the banking industry. Profits soar when interest rates are rising and when they are falling. If you take a look at profit margin you will see that the banks are making greater profits right now than are the oil companies!
Your friend,
Joe
P.S. Please take a look below at my comments on stem cell research, and I'd love to hear some comments from you.
With the limited amount of oil left (it is not an endless rescorce) we should invest in new ways to power cars and other oil dependent processes. And one way that the major costs of new research can be covered is through the oil profits currently being made by the oil companies.
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