4 ms·

If Exxon made a net income of $41 billion last year (http://www.forbes.com/sites/christopherhelman/2012/04/16/which-megacorps-pay-megataxes/ http://www.forbes.c

If Exxon made a net income of $41 billion last year (http://www.forbes.com/sites/christopherhelman/2012/04/16/which-megacorps-pay-megataxes/ http://www.forbes.com/sites/christopherhelman/2012/04/16/whi...), then it's pretty much money for nothing. BP's deepwater disaster indicates that not enough is being done to protect the environment, it hasn't stopped risky drilling. That should never happen again. Some of those profits could be turned over into environmental preventative protection. These companies smack of pure greed to me.

hythloday 14y ago
Exxon made a profit of $41bn on a turnover of $480bn - about an 8% profit margin. That's not really "money for nothing". That's a healthy return on a gargantuan investment. Some tech stocks profit margins: AAPL: ~30%, MSFT: ~30%, GOOG: ~25%. 3-4 times higher than Exxon. Do those companies all make money for nothing too?
- hcurtiss 14y ago
  Exactly. You beat me to it. See source here, namely Tables 2 and 6: http://www.fas.org/sgp/crs/misc/R42364.pdf http://www.fas.org/sgp/crs/misc/R42364.pdf Also here: http://ycharts.com/companies/XOM/profit_margin http://ycharts.com/companies/XOM/profit_margin Note that it was closer to 5% in Q2 2009.
- draggnar 14y ago
  But it would be much lower if these companies were held accountable for the massive environmental impacts that they have (beyond the direct impacts of a spill). Excluding things that are even "debatable" like climate change, pollution and the effects thereof are not. These socialized costs would make oil companies unprofitable.
  - ams6110 14y ago
    Those things are all very much debatable. Unfortunately reasoned debate rarely occurs, what we get instead is hyper-partisan shouting matches.
  - hythloday 14y ago
    I agree that oil companies benefit from externalities that aren't accounted for, but I'd really like to see a numerical demonstration that it would make them unprofitable - I'm totally unconvinced that oil demand is that elastic, and I think they'd be able to pass the increased costs on to customers.
    - Tobu 14y ago
      Oil is more scarce and useful than money, it's hard to see what would make extraction unprofitable. A carbon tax would mostly disincentive wasteful consumers. I wonder if anything could prevent exploitation of shale gas with a really low EROEI.
      - blaines 14y ago
        Wouldn't another tax on fuel just hurt low-income consumers? I'm not rich - I drive because I want/need to, not because it's cheap. Sometimes I drive for fun, to get out of town for a bit, and I don't have the most fuel efficient vehicle, so that could be considered wasteful. If gas cost $5,$6,$10/gallon where I live (Chicago) I would still drive. Someone working minimum wage, students, kids, and retirees, increased fuel cost could prevent them from driving altogether.
        Tobu 14y ago
        It will hurt some consumers if they change nothing, but cheap oil is not a right, and being dependent on it now or in the future should be discouraged for good reason (mostly because a lasting ecological catastrophe is worse than diminished standards of living). Some hints that will help commuters save money: better public transport, carpooling, working from home, moving out of suburbia.

hythloday 14y ago

Exxon made a profit of $41bn on a turnover of $480bn - about an 8% profit margin. That's not really "money for nothing". That's a healthy return on a gargantuan investment. Some tech stocks profit margins: AAPL: ~30%, MSFT: ~30%, GOOG: ~25%. 3-4 times higher than Exxon. Do those companies all make money for nothing too?

hcurtiss 14y ago
Exactly. You beat me to it. See source here, namely Tables 2 and 6: http://www.fas.org/sgp/crs/misc/R42364.pdf http://www.fas.org/sgp/crs/misc/R42364.pdf Also here: http://ycharts.com/companies/XOM/profit_margin http://ycharts.com/companies/XOM/profit_margin Note that it was closer to 5% in Q2 2009.
draggnar 14y ago
But it would be much lower if these companies were held accountable for the massive environmental impacts that they have (beyond the direct impacts of a spill). Excluding things that are even "debatable" like climate change, pollution and the effects thereof are not. These socialized costs would make oil companies unprofitable.
- ams6110 14y ago
  Those things are all very much debatable. Unfortunately reasoned debate rarely occurs, what we get instead is hyper-partisan shouting matches.
- hythloday 14y ago
  I agree that oil companies benefit from externalities that aren't accounted for, but I'd really like to see a numerical demonstration that it would make them unprofitable - I'm totally unconvinced that oil demand is that elastic, and I think they'd be able to pass the increased costs on to customers.
  - Tobu 14y ago
    Oil is more scarce and useful than money, it's hard to see what would make extraction unprofitable. A carbon tax would mostly disincentive wasteful consumers. I wonder if anything could prevent exploitation of shale gas with a really low EROEI.
    - blaines 14y ago
      Wouldn't another tax on fuel just hurt low-income consumers? I'm not rich - I drive because I want/need to, not because it's cheap. Sometimes I drive for fun, to get out of town for a bit, and I don't have the most fuel efficient vehicle, so that could be considered wasteful. If gas cost $5,$6,$10/gallon where I live (Chicago) I would still drive. Someone working minimum wage, students, kids, and retirees, increased fuel cost could prevent them from driving altogether.
      - Tobu 14y ago
        It will hurt some consumers if they change nothing, but cheap oil is not a right, and being dependent on it now or in the future should be discouraged for good reason (mostly because a lasting ecological catastrophe is worse than diminished standards of living). Some hints that will help commuters save money: better public transport, carpooling, working from home, moving out of suburbia.