I can't fault your argument but several things should be noted.
* Royal Dutch shell is also the largest solar power player and a
very big portion of its profits come from solar cells on millions
of thatched third world rooves. The Australian arm of the company
claims that the solar section is carrying the oil section in terms
of profitability. I don't know if that it true world wide.
* Secondly with environmental pressure and the greenhouse pressure
are adding to the cost of setting up new refinery facilities.
There is now a great barrier to entry that prevents new players
from entering the market. While the petrol stations are owned by
the supplier they are able to block new players and new energy
technologies.
* Strong cross ownership in the past of oil and automotive
companies, each with a lot of the others shares in their asset
fortfolios and pension plans, tends to discourage non oil based
automotive design. This situation is now in flux since the Exxon
valdez incident. Losses forced the oil companies to sell key
blocks of shared. The asian automotive inroads on to western
markets has an impact on the car side. Things are shaken up but
not to the point where power dynamics is changed.
* Oil companies have a huge reserve asset they can claim, oil in the
ground that they have rights to. Even when things go bad they can
borrow against this asset to smooth cash flow. Most other
industries can't claim resouces that are still under ground to the
same extent. This will change radicly once CF is proven. The oil
futures and the asset value of the remaining oil will change radicly.
* Govenments see oil as stategic; we don't have solar tanks or
fighters yet so shifting the country, any country, to an energy
source that is incompatable with the defence infrastructure is
seen as unwise. The pentagon is the oil industries biggest but
quietist backer. The first fusion tank will change those equations
overnight and the oil industry will be on its own.
I'll have to do some checking for other points.
Steve Krivit wrote:
This, I was asked by someone today, when discussing the apparent
shortage of oil and price escalation that appears to be related to
supply/demand. He referred to this snip:
1) *Oil* <http://freeenergynews.com/Directory/Oil/index.html>* > Big
Oil's obscene profits
<http://news.cincypost.com/apps/pbcs.dll/article?AID=/20050804/EDIT/508040321/1003&template=printpicart>*
- Exxon Mobil, the world's largest publicly traded oil company,
announced a 32 percent boost in second-quarter profits, the
third-largest increase in company history. Royal Dutch Shell, the
world's third-largest oil company, reported second-quarter profits up
34 percent. British Petroleum's were up 29 percent. ConocoPhillips,
America's third-largest, reported profits that skyrocketed by 51
percent. (/Cincinnati Post/; Aug. 4) (Thanks Al Burns)
[Gouging us in the name of Peak Oil]
This was my response. What say you, wise Vorts, to my comments?
Maybe the oil companies are making huge profits because ....
a)...they can
b)...they are in it for the money, and not public welfare
c) ... a simple economic factor: Supply low, demand high. But this
variable is independent of the actual cost. Again, simple economics.
Make (or build) a product for 1x cost, sell it for 2x cost. This is
simple capitalism, and how we all dream of obtaining personal
financial wealth. My guess is that their actual costs of raw materials
and production have not increased a whole lot in recent years, and
they have not inserted massive capital into development and
exploration, so their costs have stayed somewhat flat. Alternatively,
sales prices have gone up. Result: net profit increases. That's my
theory.
The attribution of "obscene" is not objective. People seem to think
that the oil companies are beholden to society. This is senseless to
me. They are beholden to their owners and shareholders. On the other
hand, those of us who have somewhat of a utopian view, may feel
strongly that energy should be a God-given resource, available as
freely as the air, and perhaps, as freely as clean water should,
ideally, be available. But, that too, is another matter. Independent
of oil company profits, independent of peak oil. A does not equal B, B
does not equal C, and neither does A equal C.
That's my $.04 (inflation, you know)
What I REALLY want to know is if ANYBODY in mainstream American press
is saying ANYTHING about the concept of peak oil, not just production
maximization, which is a smaller, tertiary aspect of peak oil.
Steve
