“Then why are profits breaking records each quarter?”
When you’re talking billions of barrels you are talking about some very big numbers. Many people are misled by this. So ... here’s an example for your AP students
Let’s suppose I buy $1.00 worth of crude for my refinery and sell the finished product for $1.05. I’ve made a 5% profit (not all that far off how refineries are performing economically these days).
Now let’s suppose my crude supplier charges me $2.00 for that barrel I run through my refinery. I sell it for that same 5% profit when I sell it for $2.10.
My profit was $.05 and now it is $.10. But it is still the same return on investment.
Oh my gosh! That’s a 100% increase in profits! Outrage! Windfall! You’ve done nothing to deserve this (ignoring the fact that I invested twice as much money as before). We’re in pain and we think we’re being screwed. Increase taxes or come up with some sort of penalty for this outlaw company!
Well, you may be getting screwed, but it isn’t by my company. If you want lower prices (and to do something constructive about the pain vs vindictive), find competition for the guy who sells me crude. Perhaps by truly opening up drilling right here at home -— ANWAR, offshore, government land.
On this we agree 1000%! But the oil companies are making only half hearted attempts to do this because they want to divert the pols attention in these hearings. These companies should be taking their case to the public in ads and open town meetings and every other medium available. The public in an election year will take those politicians to the proverbial woodshed. But that's not happening. Because if they do DRILL ANWR like a $10 hooker, it will produce a glut that will drop the prices down to the level of the 1960s and literally kill that golden goose. However it will only start producing viable product after several years, but the pressure will still be on the companies to do something now and that goose is still gonna be dead.