Comments on: 2008 Fortune 500: Exxon Mobil’s No. 2

By: Spencer, Los Angeles, CA

Spencer, Los Angeles, CA — Wed, 06 Aug 2008 20:46:20 +0000

I work for one of the companies commonly referred to as “Big Oil,” and I can tell you that we are most certainly NOT behind the recent record prices of crude oils, gasolines, diesels, etc.

Most people outside of the oil industry don’t know this, but there is more than one kind of crude oil. There are many different kinds. This makes the phrase “the price of oil” somewhat misleading since there are many different kinds. It would be like asking someone “What is the price of wine?”

Some crudes are clean and easy to refine into valuable products like gasoline and diesel, and some are very dirty and very costly to refine into the products that consumers demand.

In the last couple of years, the US and EU governments have passed increasingly strict environmental regulations mandating that the gasolines and diesels the oil companies refine become increasingly clean (i.e. contain larger amounts of biofuels and/or incredibly low amounts of sulfur).

These stringent regulations prohibit oil companies from utilizing many types of crude oils because we cannot profitably refine them. Thus, government has artificially restricted the oil supply. This boosts your product prices.

This is just one of many reasons why prices reached such high levels over the last few years. The oil industry is incredibly complex, and large events like the recent sustained price rises are never caused by only one reason.

By: Ray, Akron, OH

Ray, Akron, OH — Tue, 05 Aug 2008 19:13:06 +0000

to S.H.–I (and probably many others) want to be part of a “Socialist” nation if it means reasonably-priced, decent health care!

By: Ray, Akron, OH

Ray, Akron, OH — Tue, 05 Aug 2008 19:09:06 +0000

Oil prices will come down with a global recession. Drilling is not going to lower prices, since any oil produced goes onto the world market (83MM bpd) and will be a drop in the bucket. We should allow drilling, but oil companies should pay the USGovt well for the privilege of coastal drilling and be well-regulated.

Repubs are fanning the notion that it is urgent to drill NOW, but we will see no benefit until at least 2 years out, if at all.

By: Bud, Mooresville, NC

Bud, Mooresville, NC — Tue, 22 Jul 2008 19:54:14 +0000

I worked in the oil industry for over 40 years both in the USA and overseas and retired from ExxonMobil, so I have a realistic approach to the present oil problem that would literally take a book to explain all the variables. Question? Why is XOM selling their 2200 service stations in the USA? Lack of profit. Suprising, isn’t it? Lets do some calculations. When crude cost $149/barrel recently, divide this by 42 gallons/barrel and you get $3.55/gallon, plus 50 cents state and federal tax equals $4.05/gallon. Add on exploration and production costs; pipeline transfer; storage of crude; refining and storage; addition of very expensive additives; pipeline again; shipping via ships, rail or trucks; distributor and dealer margins and there is really not too much profit left. The oil companies really earn pennies on the dollar. Keep in mind that there are approximately 5,000,000, yes, five million, byproducts made from crude oil per the book “Lubrication Fundamentals” by George Wills. There is much more profit in many of these byproducts than in gasoline. Yes, we need to develop all the alternatives that we can. Improve design of equipment and try to conserve as well. But, we also need to get congress to approve drilling on the OCS, ANWAR and open up more shale oil reserves. Engines will be here many, many years, so we still need hydrocarbons. It will also take many, many years before alternatives become a large portion of our energy needs. So, bottom line is that we need to develop all avenues of energy so as to become as self sufficient as possible as well as improve our overall living enviornment worldwide.

By: Jim Houston TX

Jim Houston TX — Fri, 11 Jul 2008 03:32:18 +0000

The level of ignorance in this stream of venom is unbelieveable. The fuels marketing and refining business is notoriuosly unprofitable and thisis why Exxon isselling its downstream business in the US. Soon many of you will be happy to know you won’t be able to buy Exxon or Mobil gas. As for the upstream business, Exxon only produces 2 million barrels per day out of global production of 85 million barrels, hardly enough to set prices. All commodity producers are price takers not setters. Where were all of you when oil was $10 a barrel ten years ago. Finally, its rather irrelevant what you do to cut back on demand. India and China are growing too fast for any cutback in the OECD countries to make any difference.

By: Chris, DC

Chris, DC — Wed, 09 Jul 2008 14:17:55 +0000

If you want to beat oil prices, it is really this simple:

1) Find your own energy source and find a way to harvest that energy.
2) Get a job that pays you more.
3) Live closer to work.
4) Car pool.
5) Buy stock in ExxonMobil and reap the benefits.

Here are the facts. ExxonMobil doesn’t set gas prices, nor does any oil company. Basic economic laws of supply and demand. Asia is becoming more industrialized; we consume more energy as a people than ever; the dollar has taken a dive in the world market. All of these things drive up demand and the price of oil-based services and products.

ExxonMobil makes 11% profit. That is extremely low, especially with the grip oil has on this country. They could, if they wanted, drive it up a few more percent and what would we do? Pay the money and drive the car.

Nothing is going to stop gas prices from increasing besides more oil is able to be pulled from the ground or we reduce the amount of oil used worldwide by turning to alternatives. Oh, and by the way, Exxon has invested more dollars into renewables than any other oil company as of now.

Please, if you are going to yell about something, know what you are talking about.

By: Charles Leverett, Montgomery City, MO

Charles Leverett, Montgomery City, MO — Wed, 11 Jun 2008 16:14:14 +0000

What really scares me about this is how the American people act on emotion and fear, and let the democrats feed this ignorance to get more votes.
The one who is truly robbing us is the government, the one organization everyone seems to want to fix this. Someone tell me, when is the last time the government has done something right? And anyone who has ran a business will tell you that if the government was a business, it would be extremely inefficient.
It is this need to act on emotion that has gotten us where we are today, paying 1/4 of our income to support a government that doesn’t even pretend to care about us anymore.
If you think that raising taxes on the oil companies will solve this problem, then your nothing but a fool that has fell for the left’s attempt to spread ignorance. Its a known fact, companies don’t pay taxes, we pay taxes. I mean use common sense. To get a company to charge less you don’t make them pay more money.

Its time to step back from the problem and look at it without all the emotion, and then maybe you’ll realize all the dems want to do is feed this emotion to get elected.

And by the way, I am lower middle class, and I drive 45 min to and from work every day, and I certainly don’t have any interest in oil companies, but I’ve been given a curse, its called common sense.

By: carole plymouth meeting, pa

carole plymouth meeting, pa — Sat, 07 Jun 2008 18:36:51 +0000

Anyone who says it’s OK for the oil companies to make 40 billion (and don’t give me that crap it’s before taxes) must be working for an oil company or a CEO of one who should be homeless the rest of their life. In my opinion Bush, who has bankfuptws our country in his eight years in office, is spending his last days in office making his cronies in the oil business rich. He got us into this war with lies and I believe it was all about the oil and not for our country to have it but for the prices to increase. If the oil companies made money at $1 a gallon why can’t they now make even more at the same price due to the substantial increase in demand. They are robbing us and I for one am sick of it. If there is a 3 day sick out I WILL do it. I already don’t buy gas from Exxon or Mobil but if the day comes when people actually pull together and block certain companies totally I would die and go to heaven. Let’s do something!!!

By: Dave, Denver, CO

Dave, Denver, CO — Thu, 22 May 2008 17:17:55 +0000

Look at the profit margins and not the total profit. That tells a better story about “big oil” profits. The margins are in line with other industries; in fact below several others such as food and beverage, tobacco, computer, pharmaceutical, and chemical industries.

By: GM, Augusta, KY

GM, Augusta, KY — Wed, 21 May 2008 04:01:15 +0000

Unfortunately, I have to admit that I don’t totally understand how the oil business “works”. I read a few of the posts here…and yes, we could get rid of our cost of internet, cell phones, etc… but shouldn’t have to just because we are being ripped off by the oil companies AND our government. What, should we also not buy toilet paper or food or any other essentials? Because EVERYTHING that we currently buy is going up in price all because of inflated oil prices. I think that WE, as Americans, have much more power than we give ourselves credit for. The problem just seems “Too Big” for us, as individuals, to make a difference. But if we could just come together and truly put our feet down we could make a difference. I, like most of you, have received several emails over the last few years saying not to buy gas on a certain day…blah, blah, blah, blah, blah. They know that won’t work because even if we don’t buy it today, we’ll make up for it tomorrow. But why couldn’t we boycott a particular company all together. (Perhaps the one that is #2 on the Fortune 500 list) Still buy gas as necessary, just not from one major company. Something tells me if no one is pulling up to their pumps, then they’re going to do something to bring customers back. I don’t think they would just sit back and watch the other oil companies take their share of the market without a fight. And at that point, about the only thing they could offer to make a difference would be lower prices. And eventually, the others would follow suit. I don’t know, but it makes sense to me.
By the way, I understand that all businesses are there to make a profit. And I’m all for it. But there’s a big difference in making a profit fairly and taking total advantage of a nation not being protected by their government.
If YOU think this is a good idea, pass it on to your friends and family. I truly think YOU, and I, can make a big difference. I won’t be pulling up to any of their pumps any time soon. And I intend to make the same suggestion to anyone I know. Heck, it’s worth a try!
A little more extreme and unlikely, but another idea I had one day when I was griping to myself about gas prices, healthcare (or lack thereof), etc…and our government in general…how about an American strike. 1, 2, maybe even 3 days that everyone just stays home. Of course I don’t mean police, fireman, doctors, etc. But those who aren’t ABSOLUTELY necessary to the safety of the general public…Don’t drive, don’t work, don’t go to school, don’t shop, don’t use any more electric than you have to…Take a deep breath, stay home, spend some quiet time with your family. Heck I’m sure most of us could use the break. Now, I know that would be highly unlikely to happen. But it’s nice to daydream once in a while…and that one gives me this hillarius vision of our government FINALLY jumping up off their duffs (rather quickly) and trying to make some changes that will actually benefit the average American. Before we know it guys, the so-called working Middle-class in America will be gone. Pretty soon, it will be just the RICH and the POOR. And which category will YOU fall into. Sorry for such a long post, but once I get on my soap box, it’s sometimes hard to get off. Heck, we have to release our aggrevation somehow. To each of you, I wish for a stable financial future…and LOWER GAS PRICES!

By: Jarrett Elliott, Richmond, Virginia

Jarrett Elliott, Richmond, Virginia — Sat, 17 May 2008 02:11:40 +0000

One can definately see who below owns or wants to own a piece of Exxon. Profit has always been considered dirty if it is at the expense of an entire nation.

Most of us are suffering trying to figure out whether or not is is actually profitable to drive to work while “Big Oil” Execs are trying to figure out whether or not the new Audi A8 will come in actual gold instead of that “pigment” crap the peasents use.
I absolutely believe the government should step in and limit the profit of oil and other societal, infrastructural needs. The concept of competition is perverted and absolutely reversed for these items. Companies compete to see who can charge the most!

I’m sorry if I dont feel devestated that poor little Exxon might not be able to make that $40 billion in profit anymore.

By: Jas,Toronto,Ontario

Jas,Toronto,Ontario — Wed, 07 May 2008 22:38:11 +0000

These oil companies are earning billons of dollars whereas almost every third company is going into severe losses.These oil companies are delibrately keeping oil prices high bcoz they know oil is lifeline of every economy.This is absolutely unfair practice.Also oil traders are making profits.Oil trading should be regularised to check the oil prices.All food and essential exports to opec countries should be made expensive as we are paying more for everything.

By: S. H., WDM IA

S. H., WDM IA — Tue, 06 May 2008 18:25:09 +0000

Do all of you realize that these companies pay billions upon billions of dollards in taxes? Of the $40 billion Exxon made after expenses, they paid $30 billion to the government in taxes. And the government wants to tax them more?

A “windfall profits tax” is a socialist policy meant to redistribute wealth.

Who wants to be part of a socialist nation?

If you’re worried about gas, save yourself $20 a month (or more) and ditch the internet you’re using to post on this board. Get rid of the cell phone, or the land line. That’s another $30 to $100 a month you can save. That should make up for the extra money you’re spending on gas.

By: George Foundas, Newburgh, NY

George Foundas, Newburgh, NY — Thu, 01 May 2008 22:04:56 +0000

Some of the opinions expressed here really cause me a great deal of concern.

I fail to understand when and how “profit” became a dirty word. Profit represents a gain; a step forward; progress. What I find much easier to comprehend is how the people who find profit such an egregious afront to their world view may not be doing so well financially.

You think it’s somehow wrong, or even evil to do well? Good luck with that champ. The gap between the wealthy and the not-so grows more because of the pervasiveness of just such a mindset more than for any other reason.

In the words of Ice Cube; “You better check yourself before you wreck yourself.”

By: Rob Wilbur - Economist, Cleveland Oh

Rob Wilbur - Economist, Cleveland Oh — Thu, 01 May 2008 14:32:19 +0000

Peoples feelings on this issue are correspondent with Simon’s “Fairness” economic theory of economics, whereby the consumer blames the seller for the price which they are paying. Traditionally, oil contracts worldwide are written in U.S. dollars because of it’s stability. As the U.S. dollar deflates, oil prices rise. This is from inflation or a stimulus of money into the economy. Oil companies have a right to make a profit also or they wouldn’t be in business. Those profits are funding new deep sea drilling in the Gulf to hopefully make us less dependent on the OPEC nations. Don’t forget, those company employees have to fill up at the same price we do. All the way down to the secretary and janitor.

By: Brian, Kansas City, MO

Brian, Kansas City, MO — Thu, 01 May 2008 13:45:22 +0000

11% profit that is low compared to most companies. I own a business and if I only made 11% profit I would shut it down and look for some thing else, and there would be another 130 people out of a job. I served my country for 11 years in the Navy as an enlisted man and got out in 2000. I was brought up in a small town in the midwest with no possible chance to go to college even with a 3.4 gpa. I joined up and lived within my means and saved like hell for 10 years. When I got out I paid 100% of my college education to aquire an engineering degree and a MBA while working 2 jobs supporting my family of 6. Then I started my own business with my own money.

My point is I am greatful for the US and its capitalism. I say make as much as you can to any company. That is what I was taught in school and in life. If you have a product people want or need you price it to MAXIMIZE your profit. 11% is actually pretty pathetic electric companies in the regulated market get 12% garaunteed. A good company that is in a growth phase like OIL is should be closer to 30% profit margin, my company 2007 profit margin was 26.3%.
Oh my family has a gas guzzling SUV and fullsize truck, because I can afford it. I usually drive my economy car a C5 corvette that gets 28 mpg fill-up to fill-up and gets over 30 on the highway at 75 mph. Go Chevy V8 power (400 hp) and economy!!!

By: Jason Berkes, Carlsbad CA

Jason Berkes, Carlsbad CA — Wed, 30 Apr 2008 02:52:38 +0000

I think they should be number 1. They are just big rip offs. If we keep letting them get away with it they will keep having it there way. I don’t have a solution to this problem but it is out of control. Just my 2 cents.

Thanks

Jason Berkes

By: Paul Kopp, Basking Ridge,NJ

Paul Kopp, Basking Ridge,NJ — Tue, 29 Apr 2008 20:15:31 +0000

For 30 years Petroleum companies have closed refineries and we operate at a 90-95% capacity……….it is just unacceptable that oil companies and Dick Chaney can get away with the excuse of permits and siting regs to expand of our refineries……….they can drill in Alaska if Congress requires all oil and gas to go to the lower 48 states and not Asia………

By: Larry L. Stamford CT.

Larry L. Stamford CT. — Tue, 29 Apr 2008 18:51:48 +0000

One other factor is the refineries. The cost of the raw materials (oil) is so high that they are haveing trouble being profitable. They are producing less product (gas) thus driving prices up. They are running at 82% of capacity since they have little incentive (profit) to raise production. It is much more than the big bad oil companies. The pricing is really hurting us and 95% of our driving is just to work and home. The economy will not stabilize until pricing goes down or wages go up. As well as the Fed stopping to kill the value of the dollar.

By: Irfan, Chicago, IL

Irfan, Chicago, IL — Tue, 29 Apr 2008 17:06:12 +0000

The general public needs to be educated about oil economics. Like many other industries, big oils are subject to macroeconomic factors and the resulting boom and bust cycle.

Crude price is set by demand & supply mechanism. Demand is very strong, as China, India and Middle East are expanding and have high energy demand. Supply is flat/declining due to dwindling oil reserves, geopolitical risks in the middle east, and worker strikes, while alternative energy sources are still not mature and not available in mass. All of these factors are outside the big oils’ hands.

Yes, right now they’re enjoying record profits. But we have to take the current situation into a longer-term perspective. Remember when oil price dropped in early 90’s, they were down big time. If they can somehow influence crude price, why didn’t they do so during that time?

Also, don’t forget that millions of Americans benefit from the big oils performance. Example: thousands of new job creations in the oil industry, thousands more in the oil service industry, millions of employees in the aforementioned industries prosper. Don’t forget the investing public. 53%of Exxon is owned by institutional shareholders (mutual funds, pension funds, etc.), so millions of average Americans are also enjoying the benefits.

What shall we do? Hopefully we’ll be able to develop more advanced technologies to tap into unconventional oil sources (that currently cannot be extracted due to tech difficulty); and hopefully we’ll be able to develop viable alternative energy sources. In the meanwhile, curb your fuel consumption and invest in energy-related stocks!

Anyhow, here’s a very good commentary that provides a balanced perspective:
http://money.cnn.com/2008/04/29/markets/thebuzz/index.htm