"...too many politicians believe things that aren’t true." says Robert Rapier

[Tom Nolan + 2,443]

What Biden Is Getting Wrong About Big Oil’s Profits

By Robert Rapier - Jun 18, 2022, 10:00 AM CDT

• President Joe Biden has targeted Big Oil companies, accusing them of price gouging.
• The high profits and soaring inflation are both a result of high oil prices, and oil companies have little influence over that.
• The oil companies are always a convenient scapegoat, particularly for Democrats.

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Last Friday President Biden singled out ExxonMobil for reaping big profits as a result of high oil and gas prices. The President complained “Why don’t you tell them what Exxon’s profits were this year? This quarter? Exxon made more money than God this year. Exxon, start investing. Start paying your taxes.”

Other prominent Democrats have also smeared oil companies in an attempt to deflect anger over high gas prices. Earlier this year Bernie Sanders blamed inflation on high oil company profits, which reflected a complete failure to understand cause and effect.

Oil companies aren’t reaping huge profits because they are gouging consumers, and their high profits aren’t driving inflation. The high profits and soaring inflation are both a result of high oil prices, and oil companies have little influence over that.

The oil companies are always a convenient scapegoat, particularly for Democrats. But let’s look at ExxonMobil’s profits in context. Further, let’s compare the company’s net profits to those of Apple over the past 10 quarters.

In the most recent quarter, ExxonMobil reported $5.5 billion in net income. If that’s “more than God”, I wonder how President Biden would quantify Apple’s $25.0 billion for the quarter. Five times more than God? Oh, and ExxonMobil also paid $2.8 billion in taxes for the quarter, so it seems that they are paying their taxes.

(The point here by comparing to Apple is simply to show that the outrage isn’t actually over some insane profit level. It’s about the perception that ExxonMobil is taking unfair advantage).

Related: Exxon Hits Back At Biden After Investment Accusations

Over the past 12 months, ExxonMobil has reported $25.8 billion in net income versus Apple’s $101.9 billion. But if we look back further, the discrepancy is much worse.

ExxonMobil reported losses in four of the past ten quarters, including a whopping $20.1 billion loss in December 2020. That’s what can happen when you don’t control the price of the product you sell.

You don’t see that happening with Apple. They never earned less than $11.2 billion in any of the past ten quarters. Add it all up and include the losses, and over the past ten quarters ExxonMobil earned $11.8 billion dollars and Apple earned $211.7 billion.

Perhaps someone can help me understand this concept of price gouging.

ExxonMobil is selling a product whose price is set in the global commodity markets. They earn a fraction of Apple’s profits.

Apple has full control over the price of its products and trounces ExxonMobil’s earnings in every quarter. Apple could slash the price of its products and still make a huge profit. But ExxonMobil can’t slash the price of its products because it doesn’t set the price.

Yet it’s ExxonMobil that is accused of gouging.

If you want to know how we end up with bad energy policies, it’s because too many politicians believe things that aren’t true.

By Robert Rapier

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https://oilprice.com/Energy/Energy-General/What-Biden-Is-Getting-Wrong-About-Big-Oils-Profits.html

Edited June 19, 2022 by Tom Nolan

[Boat + 1,324]

When the US allows exports with no control it is easy for the industry to create times of shortages and times of excess. There is a claim of diesel refining shortage capacity yet over 1 million barrels per day is exported and around 122 thousand imported. The government knows this, big oil knows this, then we have the idiots that lie about it. Pay me and I can teach you non idiot classes. Pay me more and I would be better at government. 
 

https://www.eia.gov/dnav/pet/pet_move_wkly_dc_NUS-Z00_mbblpd_w.htm

[footeab@yahoo.com + 2,192]

The politicians are not "getting it wrong"

They are getting it right. 

Because their RELIGION hates themselves and their lifestyle 100% dependent upon FF.

[Boat + 1,324]

On 6/21/2022 at 10:56 AM, footeab@yahoo.com said:

The politicians are not "getting it wrong"

They are getting it right. 

Because their RELIGION hates themselves and their lifestyle 100% dependent upon FF.

That made no sense. Think hard and try again. 

[Tom Nolan + 2,443]

https://oilprice.com/Energy/Natural-Gas/Biden-Snubbed-Oil-Firms-And-Met-With-Offshore-Wind-Partnership.html

Biden Snubbed Oil Firms And Met With Offshore Wind Partnership

By Charles Kennedy - Jun 24, 2022, 11:00 AM CDT

• Biden met on Thursday with industry leaders to boost offshore wind capacity.
• Oil refiners, in the meantime, were summoned to meet with Secretary Granholm.
• Granholm's meeting with U.S. refiners didn't lead to any commitments from either side.

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U.S. President Joe Biden met on Thursday with governors, labor leaders, and business leaders to discuss the implementation of more offshore wind capacity, snubbing oil company executives who were meeting with U.S. Energy Secretary Jennifer Granholm to discuss the soaring gasoline prices in America.

The White House is desperate to lower gasoline prices, which are the most important election issue for many Americans ahead of the mid-term elections in November. Ideas juggled by the Biden Administration range from invoking the Defense Production Act to boost refining capacity and output, to restrictions on oil exports. President Joe Biden also stepped up rhetoric toward oil companies, telling them in a letter sent last week to increase fuel production and noting that “refinery profit margins well above normal being passed directly onto American families are not acceptable.” 

While oil refiners were summoned to meet with Secretary Granholm, President Biden was meeting with officials and executives to discuss an offshore wind partnership. During the meeting, President Biden said the Administration had set a bold target of 30 gigawatts (GW) of offshore wind capacity by 2030.

“And this is a real boost for energy security. It really changes the creation of — and jobs, and it cuts consumer costs,” President Biden said.  

Meanwhile, Energy Secretary Granholm met with U.S. refiners, reminding them that “oil companies must deliver solutions to ensure secure, affordable supply.”

“The Secretary made clear that the Administration believes it is imperative that companies bring supply online to get more gas to the pump at lower prices. She reiterated that the President is prepared to act quickly and decisively, using the tools available to him as appropriate, on sensible recommendations,” the Department of Energy said in the readout of the meeting.

Secretary Granholm also “reiterated the President’s call for them to do more to ensure that their companies are passing savings on to their customers.”

By Charles Kennedy for Oilprice.com

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