Shell's profit soars to record $9 billion

Didn't the major oil execs tell Congress a few weeks ago that they had a "relatively low profit margin"? I wonder how Congress feels after buying that BS! Oh, wait, half of them have money in oil, so I bet their just enjoying their dividend checks!

Originally posted by nyk537

"... Things like solar and wind energy are expensive and not realistic as a mainstream energy source.

I must object, the ONLY reason they are considered 'expensive' and 'not realistic' is because they SAY its so. There is nothing inherently more expensive about silicone and other solar technology materials than oil. The truth is the industry wants to milk the 'free' infrastructure underlying oil until there is no oil left. They have NO incentive to engage in 'new' technology investment.

When we say something is too expensive we seem to forget that what it means is that someone want too much money to make it an attractive option. Now who do you suppose that would be? Who is keeping the price of oil independence too high?

The fact remains that oil is the most abundant, efficient energy source on the planet right now, and we have to own up to that.

I'll grant you that hands down! We SHOULD be using oil, it IS the most logical fuel source for the time being. And yet, someone, somewhere, is making it less viable by way of the stranglehold they have on it's availability (not the oil itself, but the demand for wealth in exchange). There is a beneficiary of this paradigm. Oil is simply a thing, the wealth demanded for it is 'arbitrary' and 'virtual'. Who is getting this wealth and do we have the 'right' to tell them "You simply can't charge that much?"

If the answer is "No." (and I think that would be the proper answer), then we have to say - WHY ARE WE SYSTEMATICALLY BEING FORCED TO HOLD TO THAT SINGLE COMMODITY? There can be no reason that the complex mathematics of 'speculation' is involved, is there?

I don't want to go down the path of "you can't blame anybody" or "we are all to blame" when I can see that the profits derived from oil speculation alone could build solar, geothermal or even nuclear (gasp) energy infrastructure easily.

I still maintain the best course of action for us would be to start using our own oil here in the US as a short term solution. This break for foreign oil dependency would free up the resources on our economy to devote much more time and energy into developing a new energy source that is feasible to institute on a nationwide scale. Eventually we could do away with oil all together and move on.

Now that is a viable path to eventually not only 'solving' the energy crisis, but restoring realistic profit models to oil trade.

But you see 'realistic profit model' is anathema to those who are directly charged with protecting us from this profiteering abuse - because it is THEY who manufacture the 'complex mathematical models' which dictate commercial policy in this country (and perhaps the world).

By the way - EXCELLENT POSTS!

Originally posted by Solarskye
It's called Capitalism and if you take that right away from a private business then you take it away from everyone.

I agree, but only to the extent that this is true because corporations now enjoy the rights granted formerly only to citizens. So if you restrict them you have to restrict all citizens - because constitutionally speaking - there is only ONE class of citizen to which all laws apply equally.

Of course, we could move to restore the original intent of the Constitution to limit citizen rights to actual individual human beings, and not conglomarate business enterprises. Then the practice of Capitalism can be controlled as it was intended to be through common laws and the Uniform Commercial Code.

Pity, we let corporate lobbyists diminish what it means to be a citizen by making 'virtual' entities our equals.

[edit on 29-4-2008 by Maxmars]

reply to post by Maxmars


Thanks for the kinds words.

And to clarify on the topic of those certain types of energy sources being too expensive, you might be right if that were only on a person by person basis. However, you have to factor in the cost of implementing and standardizing those energy sources in place of oil. The fact that everyone drives cars and does other things that currently rely on oil make it simply impossible to merely switch gears.

The break from oil dependence is going to be a long, hard road; there's no way around that. It seems like many people don't want to admit that though.

reply to post by nyk537


You may have struck a chord there. "...person by person basis.", may be the very key to begin the paradigm shift. Perhaps the 'single distribution' model of energy is the single biggest culprit in holding energy policy back. Maybe communities should forgo the gazebo in the town square and instead fund a community project to install solar panels to run their town hall.

Maybe Joe and Martha should work with their neighbors to implement a neighborhood windmill generator to power the local street lights and such. Heck it might earn them a state tax deduction.

Perhaps it's our blind acceptance that 'power comes from the plug in the wall' that makes us unable to accept the risk of changing things. That oil has to come from Arabia to be any good. That if the federal government disapproves, we're no better than homegrown terrorists.

Or, maybe..., just maybe..., my tinfoil hat is two sizes too small.

[edit on 29-4-2008 by Maxmars]

reply to post by Maxmars


Well I think there is some merit to that scenario. However I don't think the majority of American citizens would be willing to make the sacrifices necessary to make the move to alternative energy like that. Part of me wants to believe it could work, but the majority of me believes it would in fact take a mass distribution and implementation to swoon the population.

I'm also not a believer that wind and solar powers could or would provide the gigantic quantities of energy needed to sustain our country. I think the only viable option to replace oil on a large scale at this point is nuclear energy. I realize there is a lot of resistance to that here in this country, but other countries are using it effectively and safely right now.

After all, if the French can do it, we can do it.

reply to post by nyk537


That is apparently not going to happen. The only hope for that, McCain, has already sided against his own Party and is categorically against drilling in places like ANWR.

It takes 10 to 20 years to build a Refinery, so even if they did agree to let it happen we would still be talking about resources that would be unavailable for decades.

Look at the debacle this ridiculous Corn issue is causing. Real people are going to starve to death this year so trendy Environmentalists can pump a less efficient corn product into their visibly labeled vehicles while they cruise around Florida. Save that environment and food be damned. Gotta follow the old Sierra Club / Greenpeace code.

Then we have the stark reality of China and India's oil use going up exponentially. It's going to become a bidding war for oil soon and the highest bidder will control the oil. We pay or we don't play.

No surprise there.
This whole criminal syndicate should be executed.
What brazen a brazen in-your-face announcement.
And they have the audacity to blame it on OPEC or whoever.
THey do take us for idiots, and I have to say we act like idiots.
I guess they share their windfall profits with our congressmen.

Isn't anyone here conserving their trips?
So you say, "i'm going over to the xxx store, I'll be right back."
How about forget it, organize youself and try to do one-stop-shopping; preferably on the way home from work.

The oil companies are making huge profits because they are selling huge amounts of petroleum products.

However, if you look at the profit margins, you will find that the oil companies are only clearing about 9% of what they gross.

And the picture is not quite so rosy across the board.

Valero Energy Corp, the largest U.S. oil refiner, said on Tuesday its first-quarter earnings tumbled 77 percent due to weak profits from gasoline production and unplanned outages at its refineries.

Companies that refine oil to produce gasoline and other fuels had a very difficult quarter as they struggled to pass through to their customers crude oil price increases of nearly 70 percent over the past year.

Valero, whose shares were down 3 percent, said quarterly net income fell to $261 million, or 48 cents a share, from $1.14 billion, or $1.86 a share, a year earlier.

www.guardian.co.uk...

[edit on 2008/4/29 by GradyPhilpott]

reply to post by GradyPhilpott


Did you not see all the analysis I did before? Companies don't want a lot of net income, nor do they want a lot of cash on hand (though they do have a lot).

The more NI, the more taxes. So they use a lot of the money for long term investments (5 billion worth last year) and buying back common stock (which makes the earnings per share look better).

The bottom line in comparison to net sales tells very little.

[edit on 29-4-2008 by Sublime620]

Originally posted by nyk537
True they are making more due to the cost of oil rising, but it isn't their doing. What most people fail to realize (or admit) is that big oil companies DO NOT set the price of crude oil.

Reference: C2C Dec 10, 2007


I don't believe that statement for a second.

Insiders and leaks are all saying the same thing: the oil executives have had a plan to consolidate their influence, eliminate competition, secure supplies, and limit production all with one purpose in mind:

HIGHEST PROFITS POSSIBLE.


We are being economically raped.

Bend over.




[edit on 29-4-2008 by ianr5741]

reply to post by ianr5741


Actually, that statement you refute is indeed correct. Oil companies do not set the prices. And neither do the oil producing nations.

The profits being reaped by the oil companies are merely a pittance of the lion's share.



[edit on 4/29/0808 by jackinthebox]

reply to post by jackinthebox



I'm a monkey's uncle if a company in the business of selling oil can do nothing about the profits they make. If you expect me to believe that then why do these people go to work in the morning?

What do you suppose they do with all this money? They spend it trying to find more oil.

This year, Shell will spend up to £13.5bn trying to find new oil - the equivalent of its total profit in 2007. They may be making billions but we shouldn't suppose it's easy.

www.thisismoney.co.uk...

Also, the government taxes them at a rate near 75%.

reply to post by ianr5741


I never said they didn't manage their profits, I said the lion's share of profits is going elsewhere.

I'm curious as to which oil companies are actually building any new refineries or ungrading their old ones. Anyone familiar with this new refinery and it's progress, if any?

www.petroleumnews.com...

How many years do we have to wait for such a refinery? 4 years? (ouch)

reply to post by dbates


Maybe with some of it. Off hand, I think they used at least 15billion last year buying back common stock and reinvesting.

*Edit:

Apparently I need to add more.



You can clearly see that their ratio of profitability has done nothing but increased since 2001. And they were doing fine then. In fact, it's doubled from 5 cents per dollar to 10 cents per dollar.

Walmart, for instance, is only pulling 3 cents per dollar. People seem to think that's bad, and it would be for any small business. But in big business, the ratio of profitability is lowered so that production and sales increase. They make enough to make up for it.

All their numbers point to them improving by four-fold over the past 6 years. Everything has increased, and that's with them hiding money (as all corporations do) in investments and buying back common stock.

*Edited again:

I forgot the point of my post.

So not only has Exxon mobile doubled it's sales, it has doubled it's ratio of profitability. That equals quadrupling of net income.

That's with a lot of reinvesting and purchasing of common stock, plus Exxon Mobile has an asinine amount of cash flow.

[edit on 29-4-2008 by Sublime620]

reply to post by aleon1018


In 1981, the US had 324 refineries with a total capacity of 18.6 million barrels per day, the Department of Energy reports. Today, there are just 132 oil refineries with a capacity of 16.8 million b.p.d., according to Oil and Gas Journal, a trade publication.

One last thing:

It appears everyone seems to think that these gas companies are spending all this money to search for new fuel what not. Their cash flow tells a very different story:



Now, all you have to do is look at what I've circled. There are 3 categories (major cats) on a statement of cash flow. They are:

Operations (where the money should be made)
Investment (where money should be spent - such as on searching for oil or buying equipment)
Financing (stocks, bonds, and such - can be positive or negative)

Now, as you can see, they spend an average of around 12 billion per year in the investment category. Not bad, however, check out what they spent in the financing category buying back common stock:

That's right 31,402,000,000. $31.5 billion buying common stock back.

That's where their money went.

They spent 4 times more on making their shareholders happy (I WONDER WHY?) than they did on investing.

Cmon guys, the information is right in front of your damn faces, and you're arguing about who sets the prices.

****Edit:

Both of the last two posts contained information from Google finance. Forgot to provide the link.

[edit on 29-4-2008 by Sublime620]

[edit on 29-4-2008 by Sublime620]

It sure is funny that this did not happen until an oil man was voted in as president! But Im sure that this is just by chance that this happened. As far as this dumb hick is concerned this was planned from day one. When the rich and powerful make the rules and make up the paper work things can look how ever they want. I'm just saying.