Who Profited From Oil Prices

[theholycow]

Originally Posted by bowtieguy

fantastic point! i worked a short stint w/ the roads dept in my local public works a few years ago. anyway, a VERY large(and cheap) contract was given to pavers to upgrade the entire county of unpaved roads.

Yup, the job goes to the lowest bidder...who still has to pay union-dictated prevailing wage and follow a huge pile of worthless regulations along with the smaller quantity of useful regulations. That cheapest bid has to take the money from somewhere...

The system is not very good at delivering a good product.

[GasSavers_bobski]

It seems like a largely political issue to me. Longer lasting roads would piss off the associated labor unions. More durable construction means the roads need to repaired less frequently, which means a smaller labor force, which means layoffs and/or reduced hours. In turn, that means it's not in a politician's interest to push for better roads either, unless they were to get the public interested in it as well. Otherwise it would become a "so-and-so wants to cut jobs" talking point for the competition.
Yet another wonderful example of a government "by the people of the people and for the people" screwing over the people.

[bobc455]

Originally Posted by theholycow

Yup, the job goes to the lowest bidder...who still has to pay union-dictated prevailing wage and follow a huge pile of worthless regulations along with the smaller quantity of useful regulations.

Clarification- It goes to the lowest bidder who will meet the specifications provided.

BTW when I was driving around Belgium a few years ago, I commented how nice the roads were despite an equally harsh environment to the US. My host pointed out that anyone who bids on a paving project is actually bidding on a 20-year contract, and they are responsible for *everything* that happens in the next 20 years. Therefore it is in the pavers' best interest to use the highest quality materials that never need maintenance, and ensure that the underlying ground/surface is REALLY properly prepared.

At first I thought that was probably more expensive for the gov't, but after thinking about it I bet the incremental cost is tiny (or maybe even cheaper) over the long term.

[GasSavers_BEEF]

back to the topic

http://money.cnn.com/2009/01/30/news...ex.htm?cnn=yes

this is an interesting article. I don't think oil did too bad last year, let's see how 2009 fairs for them

[GasSavers_bobski]

The article points out that their profit margin was about 9%, which is typical in other industries as well. The difference between those other industries and the huge profits raked in by the oil companies is the total revenue. There's a big difference between 9% of $100M and 9% of $100B. Greatly inflated oil prices meant greatly inflated revenue, providing greatly inflated profits.

The article points to the supply/demand (specifically the narrowing gap between the two) and speculator issue as a cause of the price fluctuations. Either reducing demand or increasing production could widen that gap and smooth things out... Consumers have control of demand as the recession has shown. Guess who has control of supply? I'm sure they're just scrambling to increase production, with their record profits and all.

[theholycow]

Originally Posted by bobc455

Clarification- It goes to the lowest bidder who will meet the specifications provided.

Eh...I've bid on loads of government projects. You have to sign a paper stating you will meet the specifications, and there's many qualifications required (some are administratively difficult, few demonstrate actual ability to do the work). You have to convince the guy whose job it is to check your work that your work was decent. You rarely actually have to meet the specifications provided...and sometimes it's impossible to do anyway.

Belgium's strategy sounds good.

As for the link about Exxon:

Exxon said its fourth quarter earnings of almost $8 billion were hurt by falling oil prices, higher operating expenses, and charges related to Gulf Coast hurricanes.

Exxon made $11.7 billion in the same period last year, and a record $13.38 billion in the third quarter or 2008.

Interesting...

[shatto]

Y'All got off the subject.

Jay2TheRescus touched on who is the main single profiteer....government.

Why do people buy into 'class envy' and begrudge the system that provides you with cheap fuel and are outraged at the use of corporate jets......
yet think nothing at all of government taking a larger chunk of your purchasing dollar than anyone else....for doing what to bring it to you?
Huh?

[theholycow]

Originally Posted by shatto

government taking a larger chunk of your purchasing dollar than anyone else....for doing what to bring it to you?
Huh?

This reminds me of a good quote I was thinking of yesterday:
"For a nation to try to tax itself into prosperity is like a man standing in a bucket trying to lift himself up by the handle."
--Winston Churchill

[bowtieguy]

careful HC, that's a VERY political POV. it goes w/out saying which one.

it's not like it was as insignificant as quotations from brainy smurf afterall.

oh wait, even he has his moments of profoundness.

[R.I.D.E.]

Government and profit in the same sentence, now thats hilarious.

regards
gary