Exxon Is Doing A Good Job

Apr 26
06:56

2008

Charles Nash

Charles Nash

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Exxon is one of the most hated corporations in the world, but is it to blame for the high gas prices?

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With oil pushing well over $110 a barrel there isn't much of a positive view of oil companies. It is natural for humans to want to find blame and put it on someone,Exxon Is Doing A Good Job Articles but are the oil companies really the ones to blame? Or are they the ones that are put in the difficult position? Exxon's profits are breaking records. This happens because they're dealing with a global product in US dollars, which has been losing value. The only thing going up faster than Exxon's profits are the taxes they're paying. In 2006 Exxon payed $28 billion in taxes and in 2007 it payed $30 billion in taxes. The amount of taxes may not seem like much, but when you factor in how much Americans pay, it becomes staggering. Looking at the latest IRS data released(which is 2004), the bottom 50% of American tax payers payed only $27 billion in taxes. This means Exxon, which is just one business, pays more taxes than the bottom 50% of American tax payers. That is significant for just one business to pay that much. The idea of a windfall tax is just an immoral thing to do. Here is why gas costs more...
  • The US Greenback has been going down in value for the last few years. Oil is a global product, so it requires more US dollars to buy the same amount of oil. That's just simple economics. T
  • In this country and other countries around the world, there is prohibition on drilling where there are huge sums of oil. In America, this would include Arctic National Wildlife Refuge and in places on the Gulf of Mexico. This leaves oil companies with less oil to produce, which drives the price of oil up.
  • Most of the countries in the world that contain high amounts of oil have unstable governments. That prevents investment into developing these oil reserves. Most of the Middle East and Africa are unstable. In Venezuela, President Chavez had the military steal oil companies oil fields and equipment in a sneak nationalization. This means there will be no international investment in these oil fields, leaving them under performing.
  • Due to environmental regulations there hasn't been a refinery made in America for turning oil into gas, in the last 30 years. The demand for gas up, but our ability to create it hasn't increased.
  • Putting ethanol in gas requires that there is enough ethanol produced to meet the 5.9% margin. This means when the production of ethanol isn't strong, the price of gas goes up.
  • Taxes on gas at the pump are a percentage of what you pay for it, not flat. Therefore as gas prices go up, you're going to pay even more in taxes.
  • The taxes payed by oil companies leave them with less money for investing in research and development of new oil reserves.
These are the reasons oil prices are high and why we're paying for it at the pump. We shouldn't blame oil companies like Exxon because they're doing a good job. With all the capital, investing, distribution and government red tape, these businesses are doing a great job.

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