EXPLAINED at LAST : Why the USA does not DRILL NOW!
@redyellowblackdog (10629)
United States
July 31, 2008 9:14am CST
Yes, it is true.
All publically held companies have an obligation to stockholders to maximize profits. Therefore, the decision to drill or not in the USA would be contingent on whether or not it would increase profits. If you were making the decision on this basis, would you decide to drill or not? Here's something to help you make up your mind.
http://www.reuters.com/article/ousiv/idUSWEN711420080731
I say the oil companies have a choice between:
1) Pumping a lessor amount of oil at a higher gross price for a higher net profit.
2) Pumping a greater amount of oil at a lower gross price for a lower net profit.
I further say, given the current circumstances, #1 is logical and perfectly understandable. The oil companies are making more money pumping less crude at higher prices, so, why does anyone expect them to drill? I don't approve of it. I understand it. You can't change the situation without understanding it.
What do you say?
3 people like this
3 responses
@pauld43 (194)
• United States
1 Aug 08
I don't we think we need to blame the big bad oil companies.Sure they make aprofit,but they pput a lot of that profit back into research and development that helps to have the fuel to keep us going.The people to blame are those in Washington who have banned offshore drilling and refuse to lift the ban.In my opinion,do your own research,it is the democrats and the enviromentalist that have blocked the offshore drilling.If Clinton hadn't vetoed a bill 10 years ago lifting the ban on off shore drilling we could be having our own oil now!The democrats including Obama, the savior of the world(in his own eyes and in the eyes of the main stream media)are still opposed to offshore drilling.Place the blame where,where blame is due.
@redyellowblackdog (10629)
• United States
1 Aug 08
As a stockholder in various companies since my teen years, I certainly do not blame the likes of Exxon (XON) for making money. I do blame our politicians for allowing the likes of Exxon to buy them off from maintaining the competitive environment and international free markets in oil that would on its own hold down the price of oil. Yes, it is true. There is not free market access to the USA's oil market by foreigners. When oil is imported into the USA it is mostly brought in by US Oil companies who buy the oil and then import it. Anyone else has to pay a tax so they can not afford to greatly undersell US Oil companies. This is almost as anti free market as things can get. It drives up the price of oil.
1 person likes this
@redyellowblackdog (10629)
• United States
1 Aug 08
Renewable and alternative energy sources are being explored in a serious way, I promise. I've even had a thread about advances in solar cell technology almost ready for market. If we can hang on a few years there is a lot of good stuff coming.
1 person likes this
@gewcew23 (8007)
• United States
31 Jul 08
I understand your logic, but understanding it does not fix the issue. So how do we fix the issue, because this is a tough question. Taxes will only be past on to the consumers, and tax cut will not be enough to force oil companies to drill more oil. Do we use a form of Fascism, which the government keeps capitalism alive but uses capitalism for the nations good. Fascism gets a dirty name because of Hitler, but we forget about Francisco Franco. Franco was an excellent leader of Spain, a friend of the USA, and yes a Fascist. I am not calling for an American dictator but if we as a nation need more domestic oil and the oil companies will not do it maybe they need a helpful nudge. Franco used capitalism because he felt it was the best form of economy but believe that the companies needed to do want was in the best interest of the nation.
My idea would be to open all federal land to drilling but the oil companies must drill their with in some many year or they lose the right to participate in the American economy.
1 person likes this
@redyellowblackdog (10629)
• United States
31 Jul 08
It is the role of government to foster competition by preventing or eliminating monopolies, trusts, and oligarchies. What we have a problem with is an oligarchy of oil companies controling the USA market. This is when only a few companies get control of a sector of the economy and it ends up almost as bad as a monopoloy.
The solution in this instance is to remove and stop the protectionism of US Oil companies from foreign competition. Yes, the US government that will lecture you about FREE TRADE to explain why it is letting your job go overseas has protectionist policies in place so US Oil companies do not have to compete fairly with foreign oil companies. This contributes mightily to the real reason we are not drilling. US Oil companies are pretty well protected and don't need to drill to continue making big money.
1 person likes this
