shut down big oil?

Question

Oil companies like to play a shell (no pun intended) game.
company 1 has 3 subsidiaries.
a sells to b who sells to c who sells again to a
the oild never moves, but the 'sale' price climbs so each company can make a profit and then the ficticiously expensive gas hits your friendly neighborhood gas pump!
fraud and it happens daily!
OIl companies generally announce 350%-500% profits
WOW
and none of it helps our economy (with the exceptions of the boards of said companies). The US gov't puts a HUGE tax per gallon and when is the last time you got 1/10 cent change for your gallon?

time to shake up the system and force, by law, the constant flow of oil, no make believe shortages!
TEXAS and OKLAHOMA produce huge amounts of oil, but they pay more than the nat'l average at times

FRAUD!!!
ALASKAN pipeline oil goes to JAPAN for 50% of what we pay for arab oil!
FRAUD!!!
Let Japan buy arab oil and we can drop prices selling our own
tyvm!

Opinions?

VOTE FOR INDEPENDANTS ( and independence) AND VOTE OUT INCUMBANTS IN '08
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A healthy country, a constitutional government and better choice!

Answer 1

I'm no supporter of big oil, but I honestly believe you have many of your facts wrong. It's possible that this is happening, but I doubt it.

For example, if a company sells a product to a subsidiary (or vice versa), they can't claim a profit on it. I believe there can be mark-up on it, if they do something to it. But a paper-only profit cannot be claimed. Besides, their tax returns and financial statements are consolidated and everything washes-out. Any profit claimed by the one counts as an expense for the other; and no extra profit is claimed. I'm a CPA and this is standard accounting. You may consider subsidiaries to be some super-secret thing hidden from us, but corporations have to be open about who they own and who owns them.

Secondly, there would be no need to do that. Unless every major oil company worldwide is doing that, a single company could never artificially inflate the price through its subsidiaries. Because nobody would buy their oil And if every company was doing that, there would be no need to. They could just set an artificially high price and do away with your so-called fraud. In the end, price is set by the buyer. If you're willing to buy, they'll sell it. The only reason they don't completely gouge us is because of political implications (ie, people blaming Bush) and economic implications (more focus on alternatives).

I believe that two of the major problems is that oil companies have no incentive to build more refineries in America because they're only in competition with themselves. So they have set-up a de facto monopoly and have kept the supply artificially low. The other problem is that prices are usually set on the future's market, with traders trying to predict future supply issues. And with Bush & Co still rattling sabers at Iran and Venezula, along with the natural turbulance in Iraq and other places worldwide, the traders are scared that prices will keep going up. So they get roped into buying oil at higher and higher prices, due to the instability. And if the oil supply becomes as endangered as these guys fear, they'll have made the right decisions. And until things become more secure (ie, post-Bush) we're unlikely to see them drop any time soon.

Again, I do believe that we are being gouged at the pump, but I really think that many of your facts are incorrect. And while you didn't provide a source, I fear that you're only willing to accept information that reflects what you want it to. But don't let that stop you from picking me as Best Answer. I really will appreciate the extra points.

Answer 2

"we are all area of the project." What difficulty, John? Being consumers of ability? Or being consumers of - gasp! - evil oil? using oil - low-cost, important, and attainable - has raised the regular of life immeasurably for each human being on earth. (Or do you favor to bypass lower back to cave residing?) What you curiously don't realize is that that is all a count of economics. The ability that oil produces remains less extreme priced per kw hour than the electrical energy produced by skill of all of your image voltaic panels, windfarms, geothermal, and different "eco-friendly" ability sources to this point. purely even as those eco-friendly ability manufacturers can compete economically with the petroleum-depending ability manufacturers will the shift faraway from petroleum-depending ability production commence to take position. And even as it does, i imagine the final public of people will welcome it (I easily will). yet in the present day, we particular as hell do not favor to spend vastly more suitable in basic terms be fashionably eco-friendly. the costs to our already shaken economic equipment may be deadly. So supply up the demagoguery about shutting down large Oil, ok? Or positioned your money the position your mouth is - unload those stocks or mutual money of yours that make investments in oil exploration, production, refining, and transportation, and positioned it into sustainable ability R&D. (BTW, we does not be witnessing the tragic Gulf leak in the present day if environmental whackjobs hadn't pressured the oil organizations over the years - via liberal legislators - to drill in extreme possibility settings like deep water, rather of in shallow water or onshore. Frankly, i'm surprised we've not experienced more suitable incidents like this, given all the stumbling blocks put in the way by skill of "properly-meaning" people.)