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Are Oil Company Profits Excessive?

Or do oil companies make good money giving the public what it wants?

Jul 28, 2006

This article was inspired by listening to an oil company CEO testify before congress about why they make so much money and who is to blame.

07/28/2006

If I was a cartoonist, I'd put pictures to this transcript of Senator Blowhard grilling an oil company CEO over "excessive oil company profits."

Senator Blowhard: See. These higher prices are all your fault! The American public won't sit still for you making so much money on a scarce commodity.

Energy Co CEO: We'd love to use our profits to deliver more oil and lower your dependence on foreign oil.

Senator Blowhard: Your profits are obscene!

Energy Co CEO: We give 35% of our profits to you via taxes. Cut our taxes to zero and we'll pass this money right back to the consumer.

Senator Blowhard: You don't reinvest profits in finding more oil in the US..

Energy Co CEO: We found loads of oil. Every time we find some, you don't let us drill because it is in ANWR, Gulf of Mexico or Off the coast of California. Not many more places left to look.

Senator Blowhard: Why are you buying back shares rather than buying new drilling equipment to get us more oil?

Energy Co CEO: You won't let us use the new equipment to drill for oil where we found the oil so why buy equipment you won't let us use?

Senator Blowhard: See. These higher prices are all your fault! The American public won't sit still for it.

Dave Barry, watch your back!

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DISCLAIMER: Answers & my words are general in nature, are not meant as specific investment advice, and do not necessarily represent the opinion of anyone but Kirk. Individuals should consult with their own advisors for specific investment advice.

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