In Defense of Oil Companies' Profits

I want to give kudos to America's oil companies for their behavior at today's hearing of the Senate Engergy and Commerce Committee. Yes, it would have been nice is they have tore into the Senators as vicious thieves, but given the current situation, I am quite content for them to just politely-- but unappologetically--defend their profits. MSNBC has one account of the hearing. There are some other facts, not in the article, worth mentioning too. The oil industry, in a year of record profits, is still making 0.1% below the national average profit margin. Also conveniently ignored is the highly cyclical nature of the oil industry. It is truly boom and bust. The booms, such as at present, are the only way they can afford to stay afloat in the abysmal bust periods. Remember when you could get a gallon of gas for under $1, only a few years ago? That meant hard times for the "working people" who happen to work in the oil industry. Apparently Senator Boxer forgets that there are a lot of people who actually work in these industries. Perhaps the tree-huggers in California are not that concerned with the people who research, explore, drill, and refine oil. I suppose those Texans and Alaskans aren't really "working" when they put in the long hours that enable her to fly between the west and east coasts, preaching her hatred.

The Australian has an even better article, "Big Oil takes Senate back to school." Best quote:

ExxonMobil chairman Lee Raymond dispassionately explained why oil companies and politicians would find it difficult to agree, noting the different timelines his industry and the politicians worked under.

"In politics, time is measured in two, four or six years, based on the election cycle. In the energy industry, time is measured in decades, based on the life cycles of our projects."

ExxonMobil had just announced the first oil and gas production from its Sakhalin-1 Project in Russia's far east, he said. "We began work on the project over 10 years ago, when prices were very low, and we expect it to produce for over 40 years ... that's more then 50 years for one project. Fifty years is 25 congresses and 12 presidential terms. Fifty years ago, Dwight Eisenhower was president of the US."