Friday, October 28, 2005

Oil Company Profits Soaring

ExxonMobil's third quarter profit surged nearly 75 percent to $9.92 billion, based on skyrocketing oil and natural-gas prices. It's the largest quarterly profit in history for a U.S. company. Royal Dutch Shell said that profits grew 68 percent, to $9.03 billion, last quarter. Earlier in the week, BP announced profits at 34 percent above last year's levels, and ConocoPhillips saw revenue jump 43 percent.

Why? Oil companies are reaping gains from record oil, natural gas and fuel prices after hurricanes Katrina and Rita idled refineries and offshore Gulf of Mexico production.

Earlier this fall, Sen. Byron Dorgan, D-N.D., proposed a temporary windfall tax on big oil companies — a 50-percent excise tax on oil company profits when the price of domestic oil is above $40 per barrel. The annual revenues collected from the tax would be returned to individual taxpayers as rebates. This sounds reasonable to me. But the Bush administration, facing mounting pressure from the U.S. Congress to address record energy costs, has ruled out a tax on soaring oil company profits.

Are we surprised?

Senator Jack Reed, a Rhode Island Democrat, said oil companies should contribute 10 per cent of their earnings to the federal program that helps low-income families pay for heat.

Dennis Hastert warned companies that any price gouging is "unacceptable, and any company who does it will be prosecuted" but I haven't heard of any prosecutions. Have any of you? If so please share. I know that our little town of Norwich has surprisingly high gas prices, STILL and they are higher than any of the neighboring towns and cities and oddly enough all the gas stations have the exact same prices. When my husband questioned the folks at his local station about the amazing similarity in gas prices all over town he was told that the manager calls up, asks what the other stations are charging and then says ok, go with that.

Why isn't this adminstration giving tax credits for alternative fuel use? Or credits to encourage people like you and me to make our homes more energy efficient? I guess we already know the answer.