Saturday, November 05, 2005

Excessive Oil Company Profits

I was on a roll for a while.  Jeff Pulver stopped by and I was mentioned in the Vonage Forum Digest.  I have a treasure trove of articles, but time limits what I can do.  Lately I have been engrossed in a couple of projects.  So I am taking the time this weekend to get caught up a bit.

I am going to deviate a bit from my blog topic today to mention how big government has let the oil companies reap excessive profits from the American public.  They have taken advantage of this year’s hurricane season to gouge us at the pumps.  Gas prices in Colorado are at least 10 cents higher per gallon than the national average and 30 cents higher than the mid-west.  Oil companies, one after another, report record profits for their last quarter.  Why is it when their supplies are supposedly cut and facilities damaged by hurricanes they are racking in humongous profits?  Before you flame me for being anti-business or anti-capitalist, those of you that know me know that I am far from it.  As our government intrudes further and further in our lives, they are neglecting one of their basic responsibilities:  prevent cartels from controlling any part of industry.  Like it or not, the oil industry operates as a global cartel.  Why is Congress more obsessed with Scooter Libby and Supreme Court nominations and not protecting the American people?  Because the Democrats are more intent on destroying Bush’s image than doing their jobs.  On the other hand, the Republicans are not doing much better.

At least last week Senator, Chuck Grassley, from my home state, wrote a letter to oil companies reminding them of their responsibilities, and next Wednesday two senate committees will be holding hearings on the topic.  Talks of a windfall profits tax reminiscent of the Nixon-era are floating around inside the Beltway.  In a Republican dominated Congress, I doubt whether such a tax would ever pass.  Personally I am against taxing a company just because they did exceedingly well.  That’s taxation without representation in my opinion.  What Congress should investigate whether the oil companies manipulated the supply of oil and gas to increase profits and colluded to keep prices artificially high.  If the oil companies broke any of these laws then they should go after the oil companies and have them distribute the profits to consumers through a rebate.  The punishment will have a chilling effect; thereby, lowering prices in the future.

These are short-term solutions to our energy problem.  If we don’t address the long-term problem of finding new reserves, building new refineries, conservation, and alternate energy sources, we will find ourselves with high energy costs again in a year or two.  Already oil and gas dependent industries are leaving the United States for places where they are much cheaper.  Plastics manufacturers like Dow Chemical are shutting down plants in the U.S. for more economical ones in the Middle East and Asia.  If Congress and the President does not take action now, then the recovery the U.S. telecommunications industry is enjoying will vanish shortly.

Tag: telecom, oil, profit