Posted on 06/18/2006 10:14:30 PM PDT by Flavius
WASHINGTON (AP) -- Americans paying $3 per gallon at the pump have it relatively cheap when compared with prices globally, say oil and gas company executives who defend their record profits as essential to maintaining supplies.
ADVERTISEMENT click here In parts of Europe and elsewhere in the West, gasoline prices are more like $5 per gallon to $7 per gallon, said the chairman of ConocoPhillips Co., James J. Mulva.
"This is a global business, and it's not only that we need to add to supply, but we need to reduce demand," Mulva said. "In the United States alone, we have about 2 percent of world oil reserves, 5 percent of the population and yet we use about 25 percent of the world's consumption of oil."
Mulva and two other executives who appeared on NBC's "Meet the Press" said they are optimistic about keeping a lid on domestic prices, unless their fears come true about the potential for damage to U.S. energy production from the hurricane season that began June 1.
"I do understand why consumers are concerned. The thing that concerns all of us, I think, is that we're heading into hurricane season again," said the chairman of Chevron Corp., David J. O'Reilly.
Scientists say this year's season could produce 16 named storms, six of them major hurricanes. Last year's was the most destructive on record and the busiest in 154 years of storm tracking, with a record 28 named storms and 15 hurricanes.
Thousands of oil company employees living in temporary housing along the Gulf Coast are "much more subject to having to evacuate if hurricanes were to return," O'Reilly said. "But absent the hurricanes, I'm optimistic" that prices will not spike this summer.
Though many consumers blame high pump prices on oil companies greedy for profits, the oil company chiefs blame global competition for supplies.
"If we didn't have this level of profitability, I don't think we could get the supplies to where they need to get to," said the president of Shell Oil Co., John Hofmeister. He emphasized that the companies are seeking greater access to federal lands and offshore waters for exploration.
O'Reilly said "profits are in the midrange" and not as high as they could be, but that if prices were to decrease, the demand for oil and gas would increase and supplies could become short.
"The issue here is not the price issue. The solution here is how to increase supply," he said.
Hofmeister said his company has held "discussions with the White House quite frequently" on issues such as gaining greater access to more domestic supplies. The Bush administration has granted the companies ever-greater access to drilling areas on federal lands and waters.
"On a global basis, we're competing for resources," Hofmeister said. "If we're going to be more independent, we're going to have to address the tough, tough question of should we allow more oil and gas development in this country."
Doesn't have much compunction about SELLING "25 percent of the world's consumption of oil" though does he?
well one has to do everything one can to make ceo's unemployed
thats all
It's just a fact, that when you artificially increase demand in a tight market (by selling below the market price) you create shortages. In a free market, the only thing that makes demand conform to supply is price. Artificial meddling in the free market price has never given any positive result that I can remember. It’s a great way to create shortage. Everything is cheap, if you can't buy it, but I don't think that's what people want.
I'm sure wonderful arguments can be made for free market economics, but this guy sounds like he's shedding crocodile tears about the global energy picture all the way to the bank. Most of the high price of European gasoline is taxes, by the way.
Is this statement as trivial as it looks? Just what are you trying to say?
Remember, for every barrel of oil sold there is a barrel of oil bought. So what?
To paraphrase the old joke, "Everybody's gotta buy somewhere."
"We have to make it expensive so we won't be selling so much." If he's worried about selling that much oil, then well why don't he just get out of the business?
Well, ain't that generous.
I'm certain equally wonderful arguments can be made for gravity too, but neither economics (free-market or any other kind) nor gravity depend on argumentation for their operation or existence.
If they did, they could be debated and repealed at the stroke of a pen - and your line of thought might just have a chance of being taken seriously.
The news reported tonight tht the taxman will be increasing our petrol by 4 cents per gallon before the year ends. Since I only caught the end of the segment, I didn't hear if it was a state or federal increase.
Makes no difference whether it be state or federal, or what industry, the more they raise the prices, the more they raise the taxes.
The people who liken it to gravity, as if humans could not choose something else, ignore the fact that very few people are forced to lie on the ground for their entire lives...
Nobody "makes" a good expensive. There is a certain amount of oil available and there is a certain demand for it.
The price of a good in a market is not what somebody "makes" it for some cognate purpose.
Read a book, preferably one on economics, for goodness' sake.
Read the Bible where God sometimes orders people to defy the supposedly sacred laws of economics.
While he has to suffer in his 30,000 sq ft mansion in his gated neighborhood! Poor suffering b@atard!
EVERYBODY is forced to the ground by gravity for their entire lives and aafter.
Just as we are all bound by the fact that human behavior in seeking the things that make life possible brings into play economic laws that are just as rigid and immutable as gravity, even if less obvious.
That's why humans have an implied obligation to get sqyuare with reality before mouthing off.
You are entitled to your opinions, but you are not allowed to make up facts.
Go thump your bible elsewhere. It has nothing to do with the subject under discussion.
"Doesn't have much compunction about SELLING "25 percent of the world's consumption of oil" though does he?"
Hell no, why should he? He's a capitalist. This is a capitalist country you know. What's more you can actually buy shares of his stock and make profits off of oil. I made some very nice profits in oil last year. Hope you do too.
If I'm in the commodity business, any commodity business, I have to charge the replacement price of the product. I'm not going out of business next year, so I have charge enough to replace what I sold in this production cycle to have adequate supply next year. Probably more supply. The price of oil is high because replacement costs are high, and American politicians do a lot more, much more, than anyone in the oil business to make that replacement cost high. We depend on other countries to increase their supply, for our benefit, and some of them maybe like this tight market. It’s a goldmine for them. They're not looking out for Americans. And as long as we're not willing to increase our own supply, to help ourselves solve the problem, we're at their mercy. We’re even more at their mercy than we were about thirty years ago when OPEC shut off the tap, and gave us gas lines around the block, cars being pushed up to the pump.
thats all
Well, do it. Vote at the stockholders' meeting.
It appears that you're missing the point and do not understand basic economics, , free market, and basic business fundamentals. Then again, I could be wrong.
I agree with you JV. I mentioned the same thing to HTR.
I forced both of my children to take at least one year of Economics in college; or I wasn't going to pay for any of their four years of schooling.
They did, they liked it, and they're staunch conservatives and understand business (unlike most schoolteachers, journalists and screwball philosophers).
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.