Evil Oil Companies?

Oil companies are evil. We all know that. They make billions of dollars a year. How could anyone make billions of dollars a year and not be evil?

However, the actual dollar amount of profits is not as relevant as the ratio of profit to expense, which includes the costs of research and development as well as the ordinary costs of doing business. Overall, oil companies have a slightly higher than average profit margin, but not nearly as high as some other industries, like pharmaceuticals, banks, financial services, telecom, software, and the food and beverage industries. According to U.S. News & World Report, “if you exclude the financially troubled auto industry from that analysis, the oil industry actually appears less profitable than most manufacturers, which were earning 9.2 cents on every dollar of sales.”

Also, if you look at oil profits over the course of several decades, you’ll observe that it’s a cyclical industry, with booms and busts. The chart below, from TaxFoundation.org, tracks oil industry profits from 1977 to 2004, as well as the gasoline taxes levied by the federal and state governments for each of those years. It’s interesting to note the boom-bust cycle for oil industry profits. The profits in the mid -2000’s are comparable to the profits in the early 1980’s. But, in the two decades between, profits were much lower, sometimes only reaching 20% of the profits during the boom years. The boom years need to cover the bust years in order to keep the industry going.

Source: Bureau of Economic Analysis, U.S. Energy Information Administration

BTW, who do you think makes more money off of gasoline, — the oil companies or the government? If oil companies are evil for pulling in billions of dollars a year in profits from the oil they produce, the government must be evil incarnate, because the federal and state governments make a lot more money off of gasoline taxes each year than the total profits of all the oil companies combined. Over this 28 year period, the government made more than twice as much money off of gasoline as the oil companies did. (And that doesn’t even take into account the corporate taxes the oil companies paid!)

While many think of the oil industry as evil, we’d all be in a fix if it collapsed. So, it’s in our interest for them to make enough money to keep the oil flowing through boom and bust. If the government allowed them to drill for oil here at home, and build new oil refineries, perhaps the boom and bust periods would even out a little more. If there was more local supply to meet the demand, the price wouldn’t be as high. But, since taxes are based on a percentage of the price at the pump, it’s in the government’s interest to constrict the supply, which artificially elevates the price.

Now the Democrats are proposing an additional windfall tax for the “excessive” profits the oil companies are making. But guess where the money to pay those windfall taxes will come from? It will come right out of your pocket at the pump.

The next time you get pissed off at how much you pay for gasoline, bow your head and thank the government for that. Remember, for every penny of profit you’re giving the oil company, you’re giving the government two. And, while you’re at it, thank the government for subsidizing ethanol production and raising your food prices as well.

Ethanol is more expensive to produce and transport than gasoline, as well as being 20%-30% less efficient, so you’ll find your gas prices increasing even further, while your mileage decreases. We have to pay more for the food we eat so we can also pay more for less efficient fuel. You have the environmental lobby to thank for that bright idea, but don’t forget to thank your Uncle Sam and your state legislatures for making their dream (and our nightmare) come true.

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72 CommentsLeave a comment

  1. LOL. Your argument is cute and I agree with it be that in a socialist or neo-liberalist frame. Business organizations and companies should have ethics also when it comes to profit. They should not be milking to death the consumers, and the government, which you call as the “evil incarnate”, should also see to it that the business companies and organizations are not bleeding our pockets dry. The problem, it appears that the government is also benefiting from the profits of the companies whether in terms of taxes or in terms of election campaign contributions.

  2. Please note that I did not call the government “evil incarnate.” I said that, IF you believe oil companies are evil for the profits they reap, THEN the government must be evil incarnate for taking even more than they do.

    But I, myself, don’t believe the oil companies are evil for making a profit. As for the government, “evil incarnate” would fall under the category of hyperbole. Though I do think it’s wrong for the government to make more money off of the fuel we all use than the companies that produce it. Don’t you?

  3. The problem, it appears that the government is also benefiting from the profits of the companies whether in terms of taxes or in terms of election campaign contributions.

    Ummm… the problem is that the government is milking the consumers to death while the oil companies take the blame. Then the government makes things even worse by using our tax money to create subsidies that are jacking up the prices of our food supply to create a product that is even less efficient. There’s nothing cute about the sadly accurate argument.

  4. […] I recall reading somewhere recently that the oil companies only made about 9% profit on sales of gas. Certainly not a number worthy of all the spleen venting on the left. Then I found out that other industries like Food and Beverage or Banking have even higher profit margins. From Government is Not Your Daddy. […]

  5. Both government and big corporations are “necessary evils.” Evil because they aren’t pure good (only God is pure good) and necessary because – well duh!

    The people making the most profit out of oil right now are those stock-market investors who bought futures last year when they saw the writing on the wall.

  6. “Over this 28 year period, the government made more than twice as much money off of gasoline as the oil companies did.”

    Find some facts to back this up. Its a great argument, but needs a little more substance to it. A good government source would definitely solidify your point.

  7. SuggestionGuy, the data in the chart comes from the Bureau of Economic Analysis, U.S. Energy Information Administration. I got the chart from TaxFoundation.org.

    I usually do try to link to original sources, but a quick check of the EIA Web site didn’t turn up a single document that includes the data on both oil company profits and gasoline taxes. (I’ve contacted the TaxFoundation to request a link to their original source documents.)

  8. A discussion of oil and taxes without a mention of the billions in subsidies and tax breaks?!? Absolutely fascinating. Oil industry apologists take note!

  9. mmmm, oil, nice warm oil….
    I’m glad I’m working in an industry that is more profitable than oil.
    Kenny, Kenny, Kenny, your negative attitude needs adjustment. Please stop using oil and supporting the evil oil companies. Please let us know when you are completely free of consuming oil. Until you do that, you are part of the problem.
    Oil companies got some good tax breaks so they could continue to function during periods when they were losing money instead of making money. I agree that those tax breaks should go away today. They should keep their profits and keep some in the bank for when times get tough. It would also be great if they chose to invest a few bucks in alternative energy, some companies are doing well with this, others are not. There are good investment opportunities in alternative energy, but the government mandates for corn ethanol are a disaster. Don’t be a fool and blame the oil companies for the prices, blame the market. Go to China some time and you’ll see why oil is expensive, everyone there wants a car now. Many have them. Try rush hour in Shanghai. Oh. My. God. and then take a whiff of the air, the pollution is amazing!! more people want oil, therefore the price will go up unless production increases. Supply and Demand, baby. So don’t be a whiney baby about the price.
    Stop using it.
    If you can.

  10. You pseudo libertarians feel that you have to attack rather than discuss to make your (talking) points. You feel the need to place parameters around the participation of those you do not agree with.

    Must my life be 100% petroleum free before I can participate in the dialogue? Yours isn’t. Hypocritical right-wing bullies are out to cloud up an issue rather than discuss solutions.

  11. As it happens, Kenny, I’m against subsidies for oil, or for any other industry. If they cut out the subsidies, the price would go up even further. But then, the government could use all the money they save by not subsidizing oil companies to reduce our taxes (in my dreams), and then we could all afford to pay the higher oil prices (or spend our money on something else, as we choose).

    By taxing everybody to subsidize any particular industry, the government takes away my freedom of choice to set my own prioirities on how I spend the money I earn. Naturally, I’m against that. I’m not an oil industry apologist. I just thought it worth noting that the government makes more money off of gasoline than the oil companies do. Why does it disturb you to have that fact made known?

  12. “Why does it disturb you to have that fact made known?”

    I am all for facts being made known. It is the omission of facts that disturbs me. You are critical of Dems and government. But OPEC and Republicans get free pass. No mention of subsidies or tax breaks.

    Don’t you remember who attended the energy policy meetings? Remember Enron and the manipulation of the energy market on the west coast?

    How many other industries in your profit comparison chart receive our tax money as subsidies? Could it be all of them? Is that a truly free market?

  13. You are critical of Dems and government.

    Where did I mention Dems in this post? I am critical of government. You bet. And I don’t particularly care which party is the one partying at my expense. Philosophically, I agree with the Republicans more than the Democrats. But they don’t always do what they say and, when the Republicans waste my money, I get just as mad as when the Democrats do it. (For example, I wasn’t too happy about Bush’s economic stimulus package.)

    But OPEC and Republicans get free pass. No mention of subsidies or tax breaks.

    I try to limit the length of my posts. If I were doing a comprehensive report on the oil industrty, there are certainly a lot more topics I would need to cover. But, in the space of a blog post, I have to pick one point and make the case for that point. I pick topics that pique my interest. I don’t claim to give equal coverage to every point of view. That’s not the purpose of my blog. I do attempt to research the topics, so the opinions I set forth are based on actual facts and supported by real world data. But, beyond that supporting data, everything else is purely my own opinion, and each topic is necessarily narrowly scoped.

    Is that a truly free market?

    A free market? Where? How can you have a free market with so much government regulation? I’m all in favor of giving the free market a chance. We just have to convince the government to stop meddling in it.

  14. You did mention the Democrats in your post.

    But to exclude facts that negate the very point that you are trying to make? The message that I get from this post is “Suck it up. It’s totally the government’s fault.” Not true. These companies are active participants. These companies are all too willing to accept our tax dollars in what can only be called welfare. Evil? Probably not. Is free money good for business? Of course.

    I appreciate the fact that you leave the critical comments up. Cheers for that.

  15. You’re correct, Kenny. I did mention the Democrats proposing a windfall tax. (I forgot about that. I apologize.) But I don’t think I omitted facts that negate the point I was making. My point wasn’t “Suck it up. It’s totally the government’s fault.”

    My point was that most of the $3.50 per gallon that angers us so much at the pump isn’t going to the oil companies. About $2.83 of it goes to costs of production, about 22 cents goes to the oil companies, and about 45 cents goes to federal and state government. The profit margins of the oil companies are not unreasonable, compared to other industries.

    Subsidies are an entirely different issue. However, when figuring the profit margins, the subsidies are taken into account. To maintain a reasonable profit margin without the subsidies, that cost of gas would be much higher. So subsidies reduce the price at the pump. However, because we all pay for those subsidies with our taxes, it comes out of our paychecks anyway, just in a sneakier fashion.

    If the governemnt were to stop subsidizing oil companies, and reduce our taxes by the full amount that’s currently being spent on the subsidies (plus all the administrative overhead), would we end up with more or less money in our pockets? That would vary by individual, depending on one’s tax bracket and how much gas one uses. Personally, I’m all for cutting out the subsidies, even if it means paying more at the pump, — as long as I see a commensurate reduction in my taxes. Does that sound reasonable to you?

  16. A portion of this ‘huge government payday’ goes right back to the oil companies. So ‘full disclosure’ per say was not reached in your piece.

    ‘Record profits’ and ‘reasonable profits’ are two different things. To supplement ‘record profits’ with my tax dollars is nothing short of ridiculous. This is like giving food stamps to someone with a 250K salary. You have been trained to turn a blind eye to corporate greed and cronyism.

  17. But, as I pointed out originally, total profits are not as relevant as profit margins. A profit of $100,000/year to a small company may well represent a higher profit margin than a million dollars to a large company, or a billion to a huge company. It’s the profit margin that’s significant, and the profit margin is not out of line with other industries.

    Again, I DO NOT support subsidies. I’m not making excuses for them. I’m not turning a blind eye to them. I’m against them. As you point out, the government is taking money out of our pockets with one hand and giving it to the oil companies with the other. The taxes the government takes from us at the pump are not actually what pays the subsidies. (That comes out of our paychecks.) But, regardless of where it comes from, the government is taking money from us, and the government is giving money to them. I object to that. As I said previously, I’d rather give them the money directly and cut out the middle man.

  18. Are you talking about net profits? Today BP announced $7.6 billion first quarter net profit. Shell: $9.08 billion. I’m glad my tax dollars could help out.

  19. I’m talking about profit margins, which is the percentage of total income that represents profit versus the percentage that goes to paying the costs of producing that profit.

    If I have a business that costs $100 a year to run, and I make $400 a year in profit, that’s a very profitable business, even though it’s on a tiny scale. Even though I only have a net profit of $400, my profit margin is 80%! On the other hand, if I have a business that costs 92 billion dollars a year to run, and makes 8 billion dollars in profit, the profit margin is only 8%, even though it’s on a huge scale.

    Eight billion dollars is a lot of money. But, if it requires a 92 billion dollar per year investment to make that 8 billion, that’s not an outrageous profit, proportional to the cost of producing it. It’s a reasonable return on investment.

  20. Dear Daddy,

    They are evil. The oil companies. Why? They don’t live to fulfill the agenda of being non-evil. They don’t spend every possible moment being non-evil. They haven’t pledged all their assets to non-evility. If there are errors of commission and errors of omission, then clearly the oil companies are evil, as an error of omission.

    I’ve read some of the above comments and find that this logic is demonstrated clearly by one commenter. Farmers receive subsidies, but, farmers spend every possible moment being non-evil. And, they have pledged all their assets to non-evility.

    They are non-evil.

    It also turns out that while far from being free from oil consumption, the use of oil by the commenter is non-evil. The attempt to show the commenter’s apparent hypocrisy by using the product derived evilly, by evil oil companies, has only underscored the extreme non-evilness of said commenter.

    Record profits are per se evil. Reasonable profits are per se non-evil. Corporate greed is evil. Cronyism is very, very evil. Although, I am hard-pressed to see how cronyism is sussed out by the commenter. But, we must stop evil; to be replaced by non-evil.

    The guy down the street, who makes and sells bird houses, is evil. I asked him why he made bird houses, and he said he did it because he enjoyed the work.

    I asked him about his agenda. “Do you think about Global Warming while you make these birdhouses?” He admitted he did not.

    I asked him about world hunger, the poor and whether or not his bird houses wouldn’t be improved, if only he thought about contibuting more to advancing the cause of non-evil things. He asked me “What non-evil things would you mean?”

    And, frankly, I wasn’t sure. But I knew that simply being good at a thing, and making a thing that people wanted, at an affordable price, was not living a non-evil life. And, until this guy down the street changes his ways, and begins to intend his work to benefit Mankind, that the product of his effort is, and only can be, evil. I cannot buy his birdhouses. That would make me complicit in his evil plan. To take my money and not care how I earned it. To take my money and move on, to build another bird house.

  21. Hey, OregonGuy, nice to see you in Daddyland.

    I think it’s OK to buy the birdhouses. If buying oil doesn’t make you evil, even though though it’s evil to produce it, then buying a birdhouse shouldn’t make you evil either, even if the producer of the birdhouse had evil capitalist intentions. (But I’m not really qualified to advise on spiritual matters. Perhaps we should consult Rev. Wright. … )

  22. @ Oregon Guy: I think it’s evil to buy birdhouses… if you’ll not gonna use them. But I think it’s still evil to use them coz that means you’ll gonna imprison birds in the guise of housing them. Birds should be free and should be able to fly freely.

    Going back to daddy’s topic, well we are in a capitalist society. So it should be no problem for capitalists if they invest their capital on fuel production. But we are not in an anarchy. Thus, we have a government. And this government should ensure that the capitalists will not encroach also into the rights of the people — the consumers, the people in general. And one of these rights is the right to a clean and safe environment. The problem: the government seems to be reactive rather than pro-active. And the government just seem to extend its arm to collect taxes and fails to view things in a long term — that is, if it thinks only of taxes without thinking of the negative effects on the people, it may find no more people and companies to tax in the future.

    • wrong we live in a socialist era. the democrats tax the people relentlessly and WE pay for it. no one takes action or stands up? the government is as corrupt as ever. the problem… is MONEY and no one sees that.

  23. “I’m talking about profit margins, which is the percentage of total income that represents profit versus the percentage that goes to paying the costs of producing that profit.”

    So, to answer my question, YES you are talking about net profits. I do understand the concept. Your math is skewed as long as you insist on excluding any tax funded subsidies.

    Where did you find your operating/production cost info? And where did you find your taxes per gallon data? (Mentioned in your On April 28, 2008 at 10:57 pm comment)

    Also, when/where did the government block any refinery development?

  24. The production cost and taxes per gallon are broad estimates, based on round numbers, for the purpose of example only. If a company has a profit margin of ~8%, and a profit of ~8 billion, then the total income must be ~100 billion. If ~8 billion of that is profit, ~92 billion is expenses.

    The taxes per gallon is also a round figures estimate. Based on the 28 year average of combined federal and state gasoline taxes running approximately double the oil companies’ profits, with a profit margin of 8%, if you assume a round figure of $3.50 per gallon, it’s a simple algebraic equation. (x + .08x + .16x = 3.50) where x is the base cost, .08x is the profit, and .16x is the taxes. Again, this is an off the cuff estimate for illustrative purposes only, not based on actual statistics.

    The P&L does take the subsidies into account, so they are included in the net profit. Without the subsidies, the profit (and profit margin) would be significantly less. But the oil companies would make up the difference by raising the price to the consumer, so we end up paying for it either way. (Personally, I would prefer to pay for it directly at the pump, rather than have it siphoned out of my paycheck for subsidies so I have to pay whether I use it or not.)

  25. “But the oil companies would make up the difference by raising the price to the consumer”

    I don’t think this is a fair assumption. I think the point of getting rid of the oil subsidies and/or taxing the oil companies more is to reduce their profits, period. You might not be in favor of that, but to assume that if an oil company loses some corporate welfare (that they don’t even need in the first place) that we’ll all end up paying for their “loss” in revenue, I think, is a flawed arugument.

    As far as pharmaceuticals, banks & other financial institutions, and telecom & software monopolies…they are ALL making too much money off the little guy IMO.

    Why would an oil company willingly invest in alternative energy? That would just more quickly undercut the stranglehold that they have on our economy.

  26. Isn’t there a parallel here for the tax revenues both Federal and State Govenments get from tobacco sales, and hate the tobacco companies.

  27. Mr. Guy, what would stop them from raising the prices to make up the difference? Are you suggesting the government would legislate a cap on gasoline prices?

    The reason the oil companies would invest in alternative energy is so they don’t get caught holding the bag when alternative energy sources become viable and everybody switches — which they will. As soon as alternative energy is as efficient, practical, and cost effective as fossil fuels, why would anybody not switch? Once that happens, the oil companies will either be prepared, or face the fate of the dinosaurs, themselves.

  28. LOL…do you think that the entire country would stand for a move like that…that’s blatant price gouging IMO. At least if that happened there really wouldn’t be any debate over what the oil industry really cares about…dollar signs only…

    Your ignoring the history of the oil companies, the car companies, etc. banding together to hinder the development of alternative energy sources. It’s in their best interest (translate that as their bottom line) to pump all the oil that they can out of the ground whereever it’s located so that they can make money. The tame forays that the oil companies have made into alternative energy so far are merely PR marketing ploys IMO. There’s still trillions of dollars of oil left for them to pump and make a buck on…

  29. I think Daddy and Mr. Guy are both correct… only in a case to case basis. In the Philippines, there is this one small retailer company selling both bio-fuel and oil. This can be categorized under what Daddy says as those who see bio-fuel as the future.

    In most cases though, many still prefer to sell and use the traditional energy sources. One reason, it’s not easy to shift to alternative fuels. Large companies, you know, would not easily experiment with new ideas as it will be costly for them. Second, there are also those who consider alternative energy sources (like bio-fuels) as a factor in the food security issue. Thus, shifting is again to alternative sources is very hard.

  30. Bio-fuels are only one form of alternative energy. Ethanol from corn has turned out to be a disaster. But I’ve heard rumors of making bio-fuel from algae. And, here in the Pacific Nothwest, we have forests full of undergrowth (aka ladder fuel) because of our 30+ year non-management policy. If there were a way to turn that into bio-fuels, that would make it profitable to clear out the ladder fuel from the forests and prevent the kinds of devastating forest fires we’ve seen in recent years. (Today, it has little to no commercial value, and is very expensive to clear.) That would be a win-win situation. But using food to fuel our cars when people are starving, and when ethanol is both more expensive and less efficient than oil, is a travesty.

  31. My question is, why the hell can’t we drill for our own oil and build refineries? The old ways of drilling for oil until it gushes are long gone. We can easily and inexpensively drill for oil without harm to the environment.

  32. “why the hell can’t we drill for our own oil and build refineries?”

    We can, but there isn’t enough oil left in our country to sustain us for very long, and why should the oil companies get behind building more refineries? That would just allow more oil to be produced and lower the high price of their own commodity.

  33. […] presents Evil Oil Companies? posted at Government is not your Daddy., saying, “If oil companies are evil for pulling in […]

  34. “That would just allow more oil to be produced and lower the high price of their own commodity.”

    Just because the price goes down, doesn’t mean the oil companies can’t make just as much money. In fact, if the price goes down, they will sell MORE gasoline. If they aim to make 8% profit, they want the price to go down so they sell more and make more dollars with the same profit margin.

  35. MisterGuy….there’s TRILLIONS of gallons of Natural Gas….and BILLIONS of gallons of oil…..what do you mean we don’t have much????

  36. Impressed by big numbers eh? Here’s a smaller one for you then…peak of oil extraction will occur in 2020, and the world’s “proven” oil reserves are expected to last a maximum less than 50 MORE YEARS…that’s, of course, assuming that you believe the past suspicious official estimates of oil reserves from OPEC countries like the UAE, Iran, Iraq, Kuwait, Saudi Arabia, & Venezuela.

  37. what if we did nothing i love to see people getting mad at uncle just think what can be done if we keep plugging away i believe old farts like bates are ioo percent correct and desel can be home made for one dollar a gallon but why do they want to send students to make fuel to college for 500 bucks a whack if its free on the web with free instructions holmon and moody engine was bought off by oil companies but you evade the subject because you are a young wantabee that think they are smarter than god and narrow minded as a snake first of all bootleggers wont sel there product its fer drinkin and opinions are like assholes everybodies got one but methane is in use at fork lift factories inside buildings closed atmosphere chicken shit and pig shit is free so are leaves and straw and garbage my tomatoes are growing three feet a week as are my swiss chard my greenhouses produce water and free food so change the subject stick youre head in youre ass and i give you some wine to go with that cheese

  38. yes im mad and wont take it anymore a lady has invented a plastic that seperates all gases co2 from methane she supplies water treatment plants but will she supply the home oner on a small scale and a green house we can make it but will we shoot our eye out will we swaller the bull crap that is on the computer what if a person wants to make desel it was stopped in matthews nc as was the holmon and moodey engine some say jeruselem artechokes some sat soybeans some say garbage i say give us grants to produce green just think three feet a week in growing vegetables the water depts want to produce methane so do the pedmont natural gas so they can make more money look at the garbage people collecting waste they call it garbage but its methane

  39. Punctuation anyone??

  40. Comrade,

    Thank you for uncovering who is really evil :)

  41. This is based on old data, the profit is like 80 cents on the dollar.

  42. I love corporations.


  43. NotyouDaddy,

    You seem to be leaving out key facts that would debunk your whole arguement. I find this interesting in itself that one that claims to speak the truth fails to mention that a majority of Federal and State taxes are charged at the pump…..to us. Also, the accuracy of you profit chart while I can not prove this I am guessing that it’s also inaccurate for when the head of Exxon stood before congress he himself wasn’t able to supply accurate P&L Statements so I am baffled as to how you managed to do so. Also in a war that our very own president says was about oil why is it that oil has only sharply raised in the last presidential term?? You may wish to examine your facts a little more closely, either that or gather the rest of them as this seems a little biased.

  44. I think all of the industries you listed are evil.

    People starving while food goes in the garbage is evil.
    People living homeless while forclosed properties rot on the street is evil.
    People suffering and dying from lack of medical treatment because they are poor is evil.
    Taking financial advantage of peoples’ ingnorance is evil.
    Having anyone in your society suffer when your government can afford to help them is evil.

    “We the people, in order to form a more perfect union …
    1) Establish Justice
    2) Ensure Domestice Tranquility
    3) Provide for the Common Defense
    4) Promote the General Welfare
    5) Secure the Blessings of Liberty to ourselves and our posterity

    …do ordain and establish this Constitution of the United States of America”

    If these five things are not being provided by our government then our government is failing the Constitution. If government regulation of corporate profits is needed to ensure All Americans recieve these five things, then so be it.

  45. One thing you forget to mention about the tax the government gets from oil is that they invest that money back into infrastructure such as roads. You pretend like it all goes into George Bush’s wallet or something.

    By the way, the US is one of the CHEAPEST places for oil, outside of the oil countries. The price of petrol minus tax is almost the same all around the world (again, excluding the oil countries). In other words, you should be thankful your tax isn’t higher than it is – it’s MUCH higher in many other countries.

  46. If the sheer AMOUNT of stock you sell means that your measly 8 cents on the dollar profit is making you BILLIONS of dollars of profit, then in a world where many people don’t have enough to survive, then YES it is evil to continue to rake that money in. The non-evil response is to say “wow, look at that huge profit I’m making, I’ll cut my margins”.

    Unfortunately that cannot happen, as the root cause core of the problem is the system itself, which doesn’t care how much profit you make, only that you make MORE every time.

    Now what’s so hard to understand about that?

  47. While many are ranting about the evils of “big oil”, remember that nearly 90% of the world’s crude oil supply (and therefore the worldwide supply/demand relationship that sets the price) is not owned or controlled by private oil companies like Chevron, BP, ExxonMobil or Shell. That 90% is owned by the governments of Saudi Arabia, Iran, Iraq, Venezuela, Nigeria, Russia, Mexico, etc. – many countries or cultures that are not particularly friendly to the nice folks on this blog from good old USA…

    “Big Oil” is the producer who is “nibbling” around the edges, finding fields in remote places that are adding the remaining ~10% of non-government controlled oil to the supply. By adding to the supply, they are actually helping to keep the worldwide price of crude DOWN. Imagine that !! Why do they do it ? If they did not, they would have no business to run at all…

  48. Who create those numbers in the chart? If it is
    acurrate as it is written, then who makes all the
    profit? The Fed/State taxes seems to generate more
    dollars than the oil companies and we the public
    pays for it! It seems the more they raise the taxes
    the more we dig ourselves into a bottoomless pit!
    We will never balance the books, pay for education,
    make retirement for hard working citizens possible,
    etc. Where does the money go? The Feds, big business
    conglemorates, State need to all realize that it’s the people that makes everything possible and not
    them! Without us they’d be nothing,nothing and more

  49. DNA:

    Corporations pay you. Is your paycheck evil?

  50. You’re stats are BS at best.

    You’re not including environmental damage, CO2 pollution, lobbying against renewable alternatives, lobbying for SUV’s an other high consumption vehicles.

    You’re not including the cost of war to secure the oil… for the oil companies.

    That’s why the government HAS to tax, because oil companies, like most companies avoid paying the full price of their produce. They offset their cost back onto taxpayers by denying global warming, denying environmental damage and denying their are alternatives.

    So the government and states are left to clean up their mess.. yes at the taxpayers expense.

    It’s childish to blame congress for being corrupted by millions of dollar in bribes when they make 100 times less then CEO’s of the companies bribing them.

    Bribery just works my friend, let there be no doubt about that. It’s out job as the people, to realize that blaming our government is just a way to indirectly blame ourselves without actually admitting who’s at fault.

    When you voted for Nixon, Reagan and Bush.. you voted for this. Just because they SAY they are people or high morals and fiscal responsibility doesn’t mean you should blindly accept their own rating of themselves.

    The externalities (or added costs pushed onto the public) are among the highest of all industries when it comes to energy. We clean up after them endlessly at YOUR expennse because IDIOTS want to make graphs that show how innocent these corporations are and how much to blame the government is.

    Your breakdown is BS. It’s design to mislead people.

    Here is a real breakdown of whats going on


    You’re acting as if there is ONE super power called government that taxes the hell out of everything and just like there is no COMPANY called the Oil Industry, there is no super entity that controls all taxes.

    If you wanted to inform people you’d break it down ane explain that each state taxes gas on it’s own, alone with a flat federal tax of 18 cents and then the big ol income tax which all businesses pay.

    The point you miss is that those taxes are not government profit. They are the COSTS of operation.

    Does Exxon pay for the roads they use, the bridges, the waterway management. NO NO and NO

    It’s not like that money goes to the evil KING of America’s giant treasury. That’s how much it cost to keep up with the damage done on the roads and bridges.
    That’s how much it costs to keep schools open, police paid and firefighters as a public service so they don’t just let you house burn because you didn’t pay the fire prevention fee.

    You have a child’s concept of how economics work.

    Taxes are NOT government profit, they are in fact LESS than what it costs to run the government, which is why we have a National Debt, a budget deficiet and a falling currency.

    It’s true, for all American’s whining, we have some of the chapest energy on the planet. The rest of the world is driving around on mopeds people and your SO bloated and stupid you think 4 dollar a gallon gas is expensive.

    You put yourself in this situation driving around huge cars and not demand fuel efficiency until the very last second.

    It’s not that gas costs a lot, it’s that you’re poor, and you’re car is very inefficient. Compared to world gas prices we are doing great beyond the fact our currency fell, which IS the fault of BORROW AND SPEND and corporate and governmental inefficiency.

    PLUS you have taxes rolled up in there for Exxon PAYING to pump oil out of public land.

    What, should they NOT pay to take oil off federal land ?

    Rolling all that up and saying OH look look Exxon doesn’t make as much as it costs to run the nation’s energy infrastructure.

    That’s not government inefficiency. That means the government can RUN much of the energy infrastructure for the energy companies for merely what the energy companies make in profit.

    It’s a handful of companies… vs the cost of running the nation’s energy infrastructure… and you think the corporations should make MORE profit than the cost of running the nation.

    It’s not even remotely as simple as you’re trying to make it…. for your cause… which is clearly to attack democrats and government without true reasoning other than finding a means to prove your opinion and support the data out of context from any angle you can… to prove you’re right.

    I think there is plenty of room for budget cuts and efficiency in government, but not at the sake of out roads and bridges and the public’s saftey.

    You want Exxon to make money that’s just not there and you want major transport externalities to just magically go away… they aren’t. That’s the cost of operation above and beyond mere Exxon’s involvement.

    That yet another reason not to roll up your stats into a car graph called OIL AND GAS industry. It’s misleading and you’re missing billions of dollars in costs that the oil industry offsets onto taxpayers.

    You’re right… the government should stop taxing… and the oil industry should PAY EVERY DIME of it’s externalities. But, how can you ask Exxon to pay for the roads just because they use them all the time ? Can you sell the roads to the oil companies or should the people charge a fee for upkeep ?

    Should we cut taxes and let the government’s side of things and the environment turn to shit so people can go back to driving SUV’s.

    Do you even realize how inefficiecy the internal combustion engine is ?

    If it wasn’t for taxes there would be NO money in renewable energy, the roads would be total shit, our bridges would be falling apart, the environment would be much worse than it is now. We’d have absolutely no control over the fate of out own energy model.

    You take taxes away and corpoate America will just eat you for lunch and tell you to drive on the potholes and like it.

    Do you think they will step up and pay for all that on their own ? 20 years latter Exxon just got done fighting tooth and nail against the Valdeez settlment down from 2.5 trillion to 500,000.

    More taxes on the oil companies just means more money in renewable energy instead of this ferris wheel of profit leading to what… to empty oil reserves, to the worlds greatest military without enough fuel to do a god damn thing.

    We can even freeze and regulate oil costs if we have to. There is no reason to think we are truly at their mercy, this a democracy, not corporatism, not an oilocracy.

    We can just pass a law that says they can’t pass the tax cuts on to the pump… POOF there goes that problem.

    This is why the renewable tax INCENTIVES that Reagan killed were so important. Rather than taxing them to death you give them the option to dodge taxes if they innovate.

    At this point though.. nobody wants to reneward oil companies for lobbying against climate change, against what is now seen as the energy crisis. Those stupid liberals told this was going to happen for the last 40 years and you just keep siding with the oil companies.

    well it doesn’t even matter if you have stock in them, because as the worlds largest energy consumer, the US’s economy will be most hurt by what is now only the begining of the energy crisis. The DOW will fall, the dollar will fall and ALL products you can think of will go up in price.

    This isn’t an artifical problem like the great depression. This is like the dust bowl of energy but it’s not going to just clear up with a good rain.

    The problem is MUCH bigger than you think if profit margins are your main concern.

    The problem is NOT the price of oil, it’s the END of cheap energy.

    We’ve pumped the cheapest oil out already, our busienss models are not made for minimalistic energy use or unstable energy prices. They are made to move and consume commodities which simply cannot be done without oil.

    The problem is physical… not fiscal. Most people wouldn’t pay taxes if there was no law sending them to prison.. right ? Well, most people are dumb. They want cheap gas at any expense… until they that expense actually affects them.

    So we’ll use it while we got it and then ….

    Well, that why paying the upfront costs for a stable energy model is worth it… you not left saying… and then….

    and then …

    wait… there is nothing like oil because we’ve not planned that far ahead. That’s a global depression of a level we’ve never seen before. Energy has always been cheap and now it’s not just oil like the 70s, it’s almost all fuel types.

    In the big picture 5-6-7 dollar a gallon gas is the least of your problems compared to the long term relaity of having no real substitute.

    If you think 4 dollar gas is so bad… buy a fucking Prius and th effective cost will be 2 dollars a gallon.

    Back in 87 Honda put out the CRX HF and it gets 50 miles to the gallon adjusted with the new numbers. That’s BETTER than the prius.

    Do you think maybe automaters and oil companies are working together to screw you over on that one ?

    I do… considering cars from 20 years ago get better gas milage than the high tech hybrids of today.

    The VW bug people.. gets better MPG than most ‘fuel efficient’ cars of today.

    Stop asking for more interior room and 200 hp engines and gas will effectively cost half as much.

    Stop borrowing money and getting price gouged by the medical industry and your dollar might go back up.

    A higher dollar coupled with a 50 mpg car means gas is effectively less than 2 dollars a gallon.

    WTF more do you want ? You want unlimted fuel … and it’s just not there. You should have thought of that over the course of the last 40 years instead of forgetting that oil will run out and pulling you head out of your asses at the last second.

    TOO LATE now.

    Cutting taxes on a nation with 10 trillion in debt and about 1 trillion over budget will just send the dollar down even more.

    You HAVE to pay for you nations costs, transport, tourism, environmental impacts all add up. Skip out on that and you currency declines and oil goes up even more.

    Look at it this way… most of the cost is in the crude oil. That means MOST of your problems are form a low dollar. Killing taxes will proportionaly raise gas costs MORE because MOST of the cost is from crude which is a foreign asset.

    Congress should IGNORE oil and focus on investments in renewable energy, battery technology and algae based biofuel.

    That’s your solution, when it happens, you can say I told you so. It might take an economic collapse, but in the long run those types of renewable energies are the future and oil is dead.

  51. […] make billions of dollars a year. How could anyone make billions of dollars a year and not be evil?read more | digg story Share and Enjoy: These icons link to social bookmarking sites where readers can […]

  52. “By adding to the supply, they are actually helping to keep the worldwide price of crude DOWN.”

    Too bad that it hasn’t worked that way in quite a while, the oil companies are sitting on federal oil drilling permits that have more than *doubled* in recent years. So much for drilling our way out of this crisis…

    “Corporations pay you.”

    Maybe you, but not me…

  53. I have been saying this for a long time and only to fall on deaf and mad ears. Not only do the Oil Companies not earn a high enough profit margin but neither does Wal Mart for that matter. Albeit not for the same reasons, but the point is there and clear. The government has for a long time been charging more in taxes then the oil or gas is worth and I would venture to say a lot of it goes towards pork funding, since fiscal conservatism or RESPONSIBILITY seems to be a word most politicians don’t understand.

  54. […] Evil Oil Companies? « Government is Not Your Daddy […]

  55. Gas taxes? Yea, they fund a lot of “pork funding”, like roads, bridges, other infrastructure…that we need MORE of, not less. I agree though, the GOP doesn’t understand what “fiscal conservatism or RESPONSIBILITY” is anymore.

  56. […] read more | digg story No Comments so far Leave a comment RSS feed for comments on this post. TrackBack URI Leave a comment Line and paragraph breaks automatic, e-mail address never displayed, HTML allowed: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong> […]

  57. I just want to say, thank you for making this clear for those who did not understand that it was actually the government making off with your money.

  58. Note to readers here, if you go to “Obamanist’s” blog, he will intentionally edit your comments on his blog to make it look like you agree with him after he “moderates” them. He has ZERO integrity, period.

  59. I love this webpage SO much I added it to mine. Click to it and scroll down to the bottom.

    Do you mind?

    Glenn Woods

  60. This is my site.


  61. Don’t mind at all. Glad you like it, and thanks for the plug.

    BTW, great blog, Glenn!

  62. Evil is such a harsh word, the people who run them are unscrupulous, Unpatriotic, Unethical, UnAmerican, even Treasonous but Evil is whole other level!

    Sure they are Monopolies, sure they Kill innovation, sure they manipulate our Government with bribes, threats, and coercion of every kind and they put their Egos, wealth & petty whims above the Health & Wealth of our Democracy & National Security.

    Some People say they Destroyed America’s Public Transportation Infrastructure for personal gain! They have caused countless deaths because they’ve Polluted our Air, Land & Water like they’ve polluted our Government with their Lobbyists & blood Money, Some people say most our recent wars have been over OIL and that we have Whored our Military out to the Oil Companies & Subsidized big oil in more ways then you could count, and that if we were to pay the TRUE cost of Gas at the pump it would be more like $12 to $15 / gal!

    So I wouldn’t call them “Evil” just very very bad for humanity!

  63. […] The blog Government Is Not Your Daddy cited some interesting statistics about how much money energy … […]

  64. I’m a physicist and I wrote a blog about oil and gasoline prices. Please check it out:


  65. Nice info sharing. Thank’s a lot for informatif posting ^_^

  66. […] (click here to view at Not Your Daddy) […]

  67. People keep expecting the government to change oil, but meaningful change rarely comes from any government. The fastest way to get alternatives to oil is for mass boycots of oil, if oil companies can’t sell oil they won’t drill it. The oil companies will rush to find an alternative to stay in buisness, if its more convienient to keep using oil then oil really isn’t that bad. Eventually oil will run out do you think that oil companies will simply give up and go out of buisness or do you think they will take their billions of dollars and invest that in a new industry so they can continue to make money? Until we need change it won’t happen, in oil or in government.
    If the goverment serves the people and the people can’t agree on how they want to be served the government can’t really serve anyone because no matter what they do someone will try to stop them. We can either wait until wait until oil is expensive enough to justify altenatives or stop oil companies from making money on oil, but don’t count on any politicians actually stopping the oil industry, because too few people are ready to live without oil.

  68. Time to buy a bike? My money wouldn’t go to oil companies or the government, I would be healthier (read: nicer view from behind) and wealthier (imagine if I didn’t have to spend from $200 – $500 a month on insurance, gas, etc.), and I would feel better about the environment.

    Now if I could get my hands on some of that gas tax money for building bike trails… Come on, with more people riding bikes there would be more, cheaper gas left over for you, silly.

  69. […] the oil companies are making. my bet is the government is raking in the doe on it. according to this the government makes twice what all oil companies combined make off of oil per year. […]

  70. What terd of a site full of unsupported supposed “facts”. No the government doesn’t make more off of oil they only receive the pennies in taxes off the price of gas. In fact in my state the oil companies receive 30 million TAX PAYER DOLLARS IN SUBSIDIES SO NOT ONLY DO THEY NOT PAY THEIR FAIR SHARE OF F$*KING TAXES A HOLE THEY GET TAX PAYER MONEY JUST LIKE THe INSURANCE CORPORATIONS SO STICK YOUR BOUGHT Corporate site you know where

  71. Polluted land, Polluted water, Polluted air as long as some rich @$$ hole makes money we don’t care. This site makes no sense unless everyone here is the 1%. Phony grassroots organizations. Hi Koch Bros love the fake sites to push your agenda. Have fun destroying the only planet we have in the name of a dollar. BP is so innocent the gulf and its people should apologize for getting ocean water and sea life in their precious oil. Poor Chervon the amazon in south america should apologize to Chevron for getting water in its precious oil supply. Poor Poor Oil. Who needs clean air, water and land. FREE MARKET just take whats not yours, destroy whats not yours, Cut corners, make people sick, Contaminate air and water. Capitalism is a virus, if left unchecked. No corporation can be trusted look at how much oil has been spilled through out history due to cutting corners. EXXON, BP, CHEVRON not of which can be trusted they all have caused disasters. Have fun fighting for the only people not struggling right now.

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