Mover Mike

Here’s how to identify an ignorant ass (IA). Listen to their words in conjuction with oil companies: “Windfall Profits” and “Windfall Profits Taxes”.

Business and Media Institute has done what you IAs should have done. They’ve studied the Big Oil Companies and found

1. The three biggest American oil companies reported 2007 revenues of $806 billion combined. ExxonMobil…reported $404.6 billion in revenue in 2007. It reported $40.6 billion in profits. Chevron reported $214 billion in revenue and $18.7 billion in profit. ConocoPhillips reported $187.4 billion in revenue and $11.9 billion profit. By comparison The U.S. Energy Information Administration estimated OPEC countries earned $675 billion in revenue in 2007 and are on track to bring in $863 billion in 2008.

2. The three big oil companies had profits of approximately 10% of revenues. By comparison, in a piece I wrote in May, The WSJ has it right, many of our largest companies make more on each dollar of revenues than oil companies. For example,

3M MMM 14.87%
Johnson & Johnson JNJ 18.64%
Procter & Gamble PG 13.96%
Coca-Cola KO 20.64%
American Express AXP 12.24%
Altria Group MO 24.86% (cigarettes)
Merck & Co. MRK 20.10%
J.P. Morgan Chase JPM 21.95%
Pfizer PFE 15.77%
Microsoft MSFT 28.33%
Intel INTC 17.32%
Google GOOG 24.89%
Yahoo YHOO 14.89%
Halliburton Company HAL 22.25%
Goldman Sachs Group Inc. GS 23.83%

3. The three big oil companies paid more in taxes than they earned in profits. Exxon, for example, paid $105 billion in taxes in 2007, more than two-and-a-half times as much as it made in profit. It stands to reason that the higher oil goes and the more money Exxon makes the more the federal government makes. Who has the incentive to keep oil prices high? How much less taxes would our government take in, if oil fell back to $50 per barrel.

4. The IAs have no idea what oil companies do with their profits. “Over the last 25 years, ExxonMobil has reported profits of $331 billion. It has invested $355 billion back into its business over the same time period Conceivably, if the giovernment had taken less, more money could have been reinvested to look for more oil and the price of oil could have been lower.

As John Stossel said, “When did profit become a dirty word?” And I might add what constitutes a windfall profit? I certainly don’t see it with the oil companies.

Tags: Business //
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