ABC Bemoans 'Obscene' Profits of Oil Company 'Behemoths'
ABC's Jon Karl on Monday railed against the "obscene" profits of the oil companies and demanded to know what House Speaker John Boehner plans to do about it. World News anchor Diane Sawyer alerted viewers that "the five behemoths of the oil industry" are announcing record profits this week.
Using a highly judgmental word, Karl complained to Boehner, "Is there something obscene about gas company, oil and gas company profits being that high when Americans are struggling just to fill up the tank?"
Karl also derided a tax cut for the oil industry as a subsidy: "[Boehner's] willing to consider doing away with federal subsidies for big oil companies, including the so-called oil depletion allowance, a big tax break just for the act of drilling."
After the House Speaker allowed that he may be willing to consider such a move for very large oil companies, Karl persisted, "So, would you be in favor of seeing some of these subsidies that going to big oil at times record profits [eliminated?]"
A transcript of the April 25 segment, which aired at 6:35pm EDT, follows:
DIANE SAWYER: And coming up next, gas prices. New numbers out late today showing the price of gas soared another four cents this week. $3.88 a gallon, an all-time high for April. And this week, the five behemoths of the oil industry will announce first quarter profits expected to be $35 billion. 45 percent higher than a year ago. And that is a whopping $390 million profit every single day. House Speaker John Boehner even weighed in from his home turf in Ohio. And our Jon Karl got an exclusive interview.
JON KARL: Skyrocketing gas prices and those huge oil profits have even caught the attention of Speaker of the House John Boehner are, a long-time supporter of the oil industry. Is there something obscene about gas company, oil and gas company profits being that high when Americans are struggling just to fill up the tank?
JOHN BOEHNER: Listen, everybody- everybody wants to go after the oil companies and, frankly, they've got some part of this to blame. All right? But the fact is there's a limited supply of oil around the world. There's unrest in the Middle East driving up the price. They happen to hold the assets.
KARL: We met the Speaker in his rural Ohio district where he was meeting with local businesses. [Greeting Boehner.] Mr. Speaker. In an exclusive interview, he said something no Republican Speaker of the House has ever said. He's willing to consider doing away with federal subsidies for big oil companies, including the so-called oil depletion allowance, a big tax break just for the act of drilling. It cost taxpayers more than $1 billion a year. I'm sure you saw the former CEO of Shell Oil came out and said the companies, they don't need these subsidies.
BOEHNER: I don't think the big oil companies need to have the oil depletion allowances but for small independent oil and gas producers, if they didn't have this, there would be even less exploration in America than there is today.
KARL: So, would you be in favor of seeing some of these subsidies that going to big oil at times record profits-
BOEHNER: It's certainly something that we ought to be looking at.
KARL: Doing away with these subsidies?
BOEHNER: We're at a time when the federal government is short on revenues. We need to control spending but we need to have revenues to keep the government moving. They ought to be paying their fair share.
KARL: Boehner also said the President shares some blame for high gas prices and said if they go any higher they'll cost him his re-election.
BOEHNER: The economy doesn't get better, I don't think he'll win. If people don't feel better about government-run health care, I don't think he'll win. If gas prices are at $5 or $6, he certainly isn't going to win.
KARL: For the Speaker's own constituents, skyrocketing gas prices have emerges as, perhaps, the top concern. The owner of this small business in Greenville, Ohio told us that mounting fuel costs are already starting to take a bite out of profits for them and for their customers. Diane?
SAWYER: And that profit number for the oil companies. $390 billion every single day sure got out attention.
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Comments
They buy and sell oil.
Submitted by johnsonl on Tue, 04/26/2011 - 4:41pm.
They can make gasoline and set the price however they wish. It's called capitalism.
I wish that the oil companies would just be honest about their prices instead of speculators blaming everything under the sun except the truth. It's their oil; they can sell it for whatever price they wish.
Yeah, and the government can
Submitted by Rowane on Tue, 04/26/2011 - 5:54pm.
Yeah, and the government can tax it so high that the profits made by the oil companies pale by comparison.
You've got to stand for something, or you'll fall for anything. (Aaron Tippin)
so the discussion didn't include margins?
Submitted by OffTheLows on Tue, 04/26/2011 - 5:08pm.
in the past the margins have been sub 10%.. perhaps because of the oil price spike it will move above that but the major reason oil companies show such big profits is because they've consolidated and it's simply a function of their size. And by the way, that size came in handy in the case of BP, where many others drilling in the gulf would have simply went bankrupt and the expenses would have fallen on the government. If there are special tax breaks specific to the oil industry that are removed, it should have a oil price trigger and the money shouldn't be used to subsidize money losing industries alt energy companies as the president suggests, but instead to reduce the federal gas tax.
Whats obscene is the constant
Submitted by Snappy on Tue, 04/26/2011 - 5:13pm.
Whats obscene is the constant barrage against someone, or a company, making a profit. Its all framed in the argument of it being the governments money which the oil companies are somehow stealing. It makes me sick. Especially how the media always drum up the poor folk who suffer at the pumps. Of course it has nothing to do with the fact that we keep shutting down all our in house drilling, and insist on buying the majority of our oil from other sources.
Furthermore....
Submitted by Blonde on Tue, 04/26/2011 - 5:20pm.
....in order to make "obscene" profits, a company must expend an "obscene" amount of capital on infrastructure, etc. Which is something these idiots never consider.
Shell forked out $4 billion in order to set up drilling in the Arctic Sea....this is before moneys spent on tangible things like equipment, on leases, permitting fees, etc. All was fine until a bunch of eco-freaks on the EPA review panel said, "nope, so sorry".....do you think the government is going to refund the leases and the permit fees?
Listening to journalists discuss economics in any way, shape or form is worse than fingernails on chalkboard.
Handy Reference Guide to Obama's Gaffes and Goofs ~ Currently Numbering 200 (and Counting)
...and more so, what do these
Submitted by Snappy on Tue, 04/26/2011 - 6:30pm.
...and more so, what do these idiots think is going to happen to the price when the tax breaks are removed? Is that going to make it less expensive or more to drill?
ABC, obviously does not know the law of supply and demand
Submitted by Funbowhunter on Tue, 04/26/2011 - 5:15pm.
BIG OIL (who pays Obama handsomely: http://www.opensecrets.org/news/2008/08/oil-industry-leans-toward-mcca.html http://www.politico.com/news/stories/0510/36783.html http://www.outsidethebeltway.com/obama_in_exxons_pocket/ ) is making record profits by keeping the drilling bottlenecked with this administration.
REMEMBER PALIN HAD TO THREATEN THEM WITH REVOCATION OF THEIR LEASES ON THE NORTH SLOPE IN ORDER FOR THEM TO DRILL, AND OIL WENT DOWN BEFORE THE FIRST DROP CAME OUT.
Why did that have to happen for exxon to drill?
What about Google and GE
Submitted by Cool Arrow on Tue, 04/26/2011 - 5:55pm.
Did these corporations not also make huge profits in 2010?
They won't answer. Too busy fighting for "lap time"
"Lap time".
Submitted by johnsonl on Tue, 04/26/2011 - 7:58pm.
I like that!
So like Obama, Boehner doesn't think the price at the pump...
Submitted by Dave. on Tue, 04/26/2011 - 8:21pm.
...is high enough yet, I guess.
It isn't the oil companies who will wind up paying for this, but we hapless consumers.
We are now past the point where rising fuel prices start doing economic damage, so lets get busy driving them even higher.
Yeah, that's the ticket.
This country is being run (into the ground) by idiots on both sides of the aisle.
-Dave
Vote for the American in November
"[Boehner's] willing to
Submitted by Chris Norman on Tue, 04/26/2011 - 8:51pm.
"[Boehner's] willing to consider doing away with federal subsidies for big oil companies, including the so-called oil depletion allowance, a big tax break just for the act of drilling."
And that would be a help for me in paying to put gas in my truck, how? I guess we're supposed to feel a heck of a lot better in that some entity is being punished....
Well Chris
Submitted by Boudin on Tue, 04/26/2011 - 9:02pm.
Hate to say it, but Boehner's part of the problem in DC. He has shown to have the intestinal fortitude of the average 4yr old!
We need folks with courage, not this wimpy, lying, obstructionist.
Boudin, I tend to agree with
Submitted by Chris Norman on Tue, 04/26/2011 - 9:12pm.
Boudin, I tend to agree with you about Boehner - but I was just addressing the response that liberals and the media have to high gas prices - "Oh, these poor consumers need help paying their high fuel bills - we should take away tax credits to punish the oil companies, that'll help those poor consumers!".
On the subject of Boehner, and for that matter, Republican leadership in general, there always seems to be a lag between the party electorate and the leadership. The message coming from the leadership about hearing what the voters want always sounds tinny and forced.
I understand Chris
Submitted by Boudin on Tue, 04/26/2011 - 9:22pm.
But I am wondering as much as you why Boehner is not pointing this out. It's because he doesnt represent us, he represents his own re-election.
He should had put up a bigger fight on the budget, but instead he lied to us about cutting a measly 38bil. He will fold like a cheap tent with the spending cap as well. The Tea Party gave him the majority, and he scoff at us daily. I am growing to dislike him as much as Obama, because I cant tell em apart!
Boudin, not to excuse Boehner
Submitted by Chris Norman on Tue, 04/26/2011 - 9:35pm.
Boudin, not to excuse Boehner at all, just in the way of a possible explanation - these guys did not come out of the current voter revolt. They are threadbare products that come from being in the establishment for years. They will never be the firebrands we hope them to be, because they're so used to trying to function within the system, they've lost a lot of the ideology they ran on originally. They say they are on board with the "revolution" - but, apparently, that's just tinny artificial yapping. The problem is, under the current congressional culture, to get into the leadership, they have to have been around for a long time. I don't know how to get around this. It's a lot easier to get an ousider, like a Ronald Reagan, elected president directly, than to get a Speaker and GOP leadership to maintain an outsider's fervor while coming up in the ranks.
I agree
Submitted by Boudin on Tue, 04/26/2011 - 9:45pm.
Best we can do, is send the Rino's home, and keep crushing the commies on policy.
My problem is, I had hope for Boehner, he was talking a good game for a while.
They just don't get it.
Submitted by Chris Norman on Tue, 04/26/2011 - 10:04pm.
You know, I think, sadly, that Boehner doesn't even get that he's not living up to his tough words. I've come to the conclusion that by the time these guys get to their high positions, they just inevitably become detached from the electorate. It's happened too many times to be just him alone. The GOP leadership all bear more of a resemblance to the "moderate" GOP of the Sixties and Seventies" than they do the current very conservative mood of the rank and file. They're still like the old party of "...Let's do what the Democrats want, but let's spend a little less money doing it". The sad thing is, they actually think they're being conservative. They just can't and don't get it.
I don't have a problem with
Submitted by ckc1227 on Tue, 04/26/2011 - 10:13pm.
I don't have a problem with them taking away oil company subsidies, if in fact that's what they are, but they shouldn't pretend that taking away those subsidies is going to reduce the price of gas.
What's even worse is they want to take those subsidies and piss them away in magic bean green energy. So, not only will the price of gas go up, the money will still be spent, saving us nothing.
Obscene profits mean obscene federal taxes.
Submitted by big.league.slider on Tue, 04/26/2011 - 9:13pm.
Here's an interesting chart.
In 2006, just 29 US oil companies paid almost as much in federal income taxes as the entire bottom 50% (67 million) of individual taxpayers. And remember, the average price for regular gasoline in 2006 was less than $3.00/gal.
ABC's asking the wrong guy.
Submitted by Phryj1 on Tue, 04/26/2011 - 9:26pm.
The simplest and most obvious way to deal with high gas prices is to increase supplies. John Boehner isn't the guy to ask about that. Barack Obama, whose administration has been doing everything they can to prevent drilling through the EPA and regulatory agencies, is the guy you need to see about fixing the problem. More oil=lower oil prices. It really is that simple. SO, ABC should go ask the supposedly smart Obama why, exactly, he doesn't quite seem to grasp that.
Progressives seem to be completely averse to facts and logic. Apparently, reality has a conservative bias.
But BIG OIL does not want more supply, Ask Sarah Palin
Submitted by Funbowhunter on Tue, 04/26/2011 - 11:16pm.
More supply means lower profits for big oil. They have bought up the competition, all prices in certain areas are within pennies of each other, why is that? It is the law in Florida, Texas and Wisconsin that prices be fixed. Who benefits from that?
Why did Exxon refuse to drill until their leases were threatened in the North Slope?
Makes total sense if BIG OIL
Submitted by MightyMouth on Tue, 04/26/2011 - 11:27pm.
Makes total sense if BIG OIL is ONE friggin company! Are you saying Oil companies are in collusion against the American people and anti-trust laws? The only way that could happen is if the gooberment was privy to, and supported such activity! I am outraged that you would think the gooberment of the people. and by the people, is actually stacking the deck against the People!!! Shame on you!!
I can give you the history if you would like!
Submitted by Funbowhunter on Tue, 04/26/2011 - 11:57pm.
In Texas, there were a BUNCH of independents in the mid 70's to early 80's, before the big boys started buying each other. In fact some of the independents had their own small refineries AND gas stations/convenience stores. They sold their fuel for 25 cents or more lower than the big boys (the ones that came about from the Standard Oil breakup in 1911). Well, the big boys could not have that, so they got Texas to pass a law that in local areas gasoline prices could not vary but for a few cents, their "reason" was to make sure supply stayed steady, but the independents had their own supply, so that would not be a real reason, the real reason was to make the independents bring their prices up to the level of the big oil companies, something that caused them to not be unique any longer, thus driving them either to sell or to shut their doors. This happened to a local company near Seven Points Texas in the early 1980's.
BTW, Each of the big boys have separate shipping and crude producing companies. They don't just have refineries. You will find their total profits are much more than the 7% margin when their subsidiaries are taken into account.
"...so they got Texas to pass a law ..."
Submitted by MightyMouth on Wed, 04/27/2011 - 12:11am.
Dude, you just proved my point!
Is that you PopTech ? Man,
Submitted by Free Stinker on Wed, 04/27/2011 - 12:14am.
Is that you PopTech ? Man, the PDS just keeps these clowns attacking Sarah.
/// Sarah Palin Fan since July 11, 2007 /// خال
Sarah Palin isn't the one blocking drilling.
Submitted by Phryj1 on Wed, 04/27/2011 - 1:47am.
Obama is. Oil companies are still TRYING to get permits and get new rigs going, but the Obama administration is blocking them every step of the way.
Progressives seem to be completely averse to facts and logic. Apparently, reality has a conservative bias.
Big dollar profit but small percentage profit
Submitted by Ray Mark on Tue, 04/26/2011 - 9:38pm.
Whenever some Marxist writer wants to bash America and free enterprise capitalism, he writes about the dollar profit and carefully omits the percentage profit. This has been going on for many years and some people still fall for the superficial, shallow, Marxist, class warfare.
Average oil industry operating margins are7.9% - less than half that of the S&P 500.
http://finance.yahoo.com/q/co?s=CVX+Competitors
HMMM
Submitted by Funbowhunter on Tue, 04/26/2011 - 11:59pm.
But does that 7.9% also account for their subsidiary Shipping, trucking, crude producing companies, or just their petroleum delivered product from refinery to end user?
Will someone please explain
Submitted by MightyMouth on Wed, 04/27/2011 - 12:27am.
Will someone please explain "margin" to funbow. Or better yet... look it up pal!
do you understand ROI?
Submitted by wizardjr on Wed, 04/27/2011 - 9:37am.
The average Wall Street Fortune 500 company gets around 8% to 10% Return On Investment (ROI). On average, the oil industry has earned around 5% ROI. Their dollar returns are HUGE, but their investments in physical plant and exploration are even more HUGE ( about 20 times bigger).
Does that clarify it for you?
Say WHAT?
Submitted by ckc1227 on Tue, 04/26/2011 - 10:04pm.
"SAWYER: And that profit number for the oil companies. $390 billion every single day sure got out attention."
The oil companies make $390 billion dollars of profit every single day? On what planet? Might want to wait until AFTER the show to hit the pipe, Diane.
Oil profits as a percentage
Submitted by deerjerkydave on Wed, 04/27/2011 - 12:46am.
Oil profits as a percentage of sales is nothing special compared to other industries. That fact alone proves the political agenda of the liberal media who receive their marching orders from their dear leader Mr. Obama.
http://everydayecon.wordpress.com/2006/04/26/oil-profit-margins-vs-other...
Why are they asking Boehner about gas prices? Isn't it their dear leader Mr. Obama who has banned oil exploration and acquisition? Nobody in the liberal media dares to question the all knowing wisdom of their dear leader. To do so would be heresy.
------------------------
"The powers delegated by the proposed Constitution to the Federal Government are few and defined. Those which are to remain in the State Governments are numerous and indefinite. -James MadisonCongress and media ought to
Submitted by jdhawk on Wed, 04/27/2011 - 2:04am.
Congress and media ought to be giving the oil companies a ticker tape parade down 5th Avenue in New York City. Not only are they shoveling obscene amounts of taxes at every level of government, they also pay royalties at the federal and state level that sometimes equals or even exceeds their federal and state tax bill. Couple the above with lease fees and you name it fees that are levied by federal, state, and local governments on oil companies and they are lucky to make 6 cents in profit on every dollar of revenue. That is NOT obscene, that's pitiful.
What about ABC/Disney's profits?
Submitted by jackieaxe on Wed, 04/27/2011 - 7:44am.
I went to Disney and I had to pay $14 to park then about 80 something dollars for a ticket to an overcrowed amusement park where bottled water costs $3 a bottle and the rest of the refreshments were ar ball park prices. ABC/Disney has some nerve harping on the Oil Company's profits!
another blatant lie writ large!
Submitted by wizardjr on Wed, 04/27/2011 - 9:34am.
These are NOT subsidies. They never were. They are a tax DEDUCTION for money spent on intangibles like permits.
The disingenuous asshats in the media (mostly) know this. They also know that conservatives and now a fair bit of the population are against "subsidies". So what do they do? Simple, just rename something. It's a lie, but so what? It serves the "higher good". You know - rape and spend.
G*d I hate these people in media.
No company can make a profit in liberal-land
Submitted by Mary Louise Turner on Wed, 04/27/2011 - 9:42am.
In liberal fantasy land, private companies, and not just Big Oil, are not allowed to make profits at all; they are to "give back" to the community, help the poor, donate to Democrats, etc. The only entity allowed to make any money is Planned Parenthood, which donates millions of dollars in blood money to Democrats every year. This is sickening, folks.
The oil companies are obscene.
Submitted by no tingly legs on Wed, 04/27/2011 - 11:23am.
deleted
I wonder
Submitted by Patriot II on Wed, 04/27/2011 - 11:18am.
if the idiots at ABC ever noticed the "obscene" profits this stinking communist administration is getting per gallon of gas? The taxes are outrageous!
The oil companies are obscene.
Submitted by no tingly legs on Wed, 04/27/2011 - 11:24am.
I've heard and read about their golfing/vacation junkets to places all over the world in luxury jumbo jets. They hardly seem to do a days work, don't address pressing problems, etc. Oh wait, that's Obama I'm thinking of....never mind.