Once again our hard working representatives in D.C. are asking the tough questions.
There is a “growing suspicion that oil companies are taking unfair advantage,” Sen. Pete Domenici, R-N.M., said as the hearing opened in a packed Senate committee room.
“The oil companies owe the country an explanation,” he said.
Just because the suits in Washington are putting the oil execs on the hot seat doesn't mean the average American will see any relief.
Wednesday, November 09, 2005
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2 comments:
Bear in mind that while they have indeed turned "record profits," those profits are still only averaging between 7 and 8 percent of total revenue. That's right smack in the middle of the national mean for American industry as a whole.
You should also remember that the oil business is very cyclical--record profits one year, record losses the next four. It's one of the reasons that I stayed out of the business, despite living in Houston and attending college for process piping. When the money is good, it's very good. But when it's bad, work is non-existent. A large portion of the industry, especially the post-drilling side, operates on a contract basis. They are by no means stable jobs, and the industry is notorious for chewing up junior-level vice presidents like cheap gum.
In my industry (commerical building construction) I will typically bid a job on an 80% margin, and occasionally increase it to 77% or even higher if it looks to be a really tough nut. Our profits hover around 11% as an industry overall, which is well above the national average and those of the oils companies.
This Senate hearing is mostly political grandstanding for the eternally clueless American press, and should be taken with a grain of salt.
Grandstanding indeed. The taxpayer takes one for the team as usual.
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