Republicans To Big Oil: “Pony Up Some Profits”
By Justin Gardner | Related entries in Economy, General PoliticsThe U.S. Department of Energy said it would like to see portions of large profits that oil companies have been posting used for increasing energy production.Senate Finance Committee Chairman Charles Grassley, R-Iowa, has called for oil and gas companies to devote a portion of their nearly $100 billion profits in the latest quarter to families who could see a 50-percent hike in heating bills this winter.
Grassley has sent letters to three oil companies asking them to contribute 10 percent of their profits to the federal Low Income Home Energy Assistance Program or similar state- or utility-run plans.
But they aren’t forcing anybody. Probably a good deal, but will it be enough?
The Bush administration is encouraging charitable giving at a company’s discretion but is against a tax on the companies’ profits, citing problems caused by windfall taxes implemented in the 1980s.This entry was posted on Friday, November 4th, 2005 and is filed under Economy, General Politics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
November 4th, 2005 at 10:01 am
I certainly don’t see this as good news. If congress can interfere with oil companies and tell them how they need to spend their ‘profits’, how could you be nieve enough to think that it would stop there????
These profits are temporary because as soon as they replace the oil in their reserves (that was bought cheaper) with the higher priced crude oil, these ‘profits’ then disappear. It works this way because Oil is a futures market.
To truly tell if consumers are being ‘gouged’ you would need to look at the ‘profit margins’ over a set period of time. If they have to pay more for the raw materials, then they of course will raise the price of their finished products, just as anybody would.
November 4th, 2005 at 11:33 am
We tried this in the 70s. The result? Read this:
http://www.techcentralstation.com/110205E.html
November 4th, 2005 at 12:50 pm
Frankly it’s yet another ludicrous Republican attempt to “suggest” good behavior to companies and expect them to line up and be nice - sort of like their voluntary environmental plan.
The oil companies for years have been playing the market to squeeze every penny out of consumers, much like the electricity companies screwed Californians during the energy crisis.
I don’t pretend that governmental regulation always does a better job, but in some cases it is necessary to protect the consumer from unbalanced corporate greed.
November 4th, 2005 at 6:31 pm
If they invest in refinery capacity so we aren’t socked in future with these huge price spikes, that’s fine by me. Unfortunately, the stopper for that isn’t the oil companies, it’s environmentalists.
November 4th, 2005 at 6:45 pm
The real issue is the profit margin. For every 1 dollar in sales Exxon made 9.8 cents. This is nothing compared to other industries. The BIG EVIL here is that oil companies play by the same supply and demand principles that everyone else does and there was a high demand and limited supply (a bubble) and profits increased — but the profit margin (price - expenditure) did not.