I guess the point went over your head. At $3 a gallon for gas, About $.25 is profit, $.60 taxes, and the rest is for ALL that goes into procuring, refining, distributing, etc etc. If we had drilled in Anwar years ago, built Nuke Power Plants years ago, built refineries years ago, etc., we would not be having the problems now.
You can get water for .39 a gallon at the cheapie store, but that is not the point. The small convient 12 oz. bottles can generate up to $2.90 a bottle profit when sold at a theater or concert, or ballgame. That is about 3000% profit. If that margin is OK with you, why do you fuss at 8% by the oil companies. You argue with the same inane logic the MSM does. Say hello to Al.
Another factor which plays into all this is what it actually costs an oil company to get a new barrel of oil to the refinery.
Their "finding costs" per barrel necessarily involve all the costs of drilling and completing a well, constructing facilities and possibly a pipeline to get it to market.
But that's only part of it. The finding cost also includes all the multi-million dollar wells that find nothing. Every discovery has to bear its share of every dry hole.
And then there's the tremendous overhead of the labor associated with it, everyone from the geologist to the facility engineer to the marketers and accountants who don't work directly at the wellsite. There is an enormous cost associated with merely making a new productive well which goes largely misunderstood.
All the permitting, archaeological studies, and regulatory compliance costs must be added. And every well is still a gamble.
My company is drilling a well right now with a dry hole cost of over $85 million. I don't know what the completion cost estimate is, but it's probably in the neighborhood of an additional $20 million. If it's successful, it may cost nearly $3 billion to equip to produce (although subsequent wells in the field would be able to use the same facility).
If anyone wants to know where the billions of dollars of profits are going, there is one example. We're putting it back into the ground to find more supply.
Not hardly.
If that margin is OK with you, why do you fuss at 8% by the oil companies. You argue with the same inane logic the MSM does.
Noooo. I have never complained about the oil companies profit margins. Quite the contrary. They've earned it by risks taken and products produced. And, if you read most comments by posters here, they agree with me.
The gripe is with the government that has totally screwed up the free market by blocking drilling in 60% of the US, and imposed draconian regulations on every link in the chain of petroleum products manufacture and distribution.
I am mad as hell about the cost of gas, pisses me off every time I pass a gas station. And each time, I curse the government for causing it. It's not enough we pay confiscatory rates of taxes, but also higher prices for everything because of government medding in the free market.