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Poor guy, only got $150 Million

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Postby thedude » Thu Apr 20, 2006 12:18 am

knapplc wrote:
thedude wrote:He accomplished his goal: he made huge profits for his company. He could care less about the externalities.

Thanks to Exxon and the other oil companies, consumers are buying more hybrid vehicles, and using alternate sources of transportation. To be honest, while it is hurting us at the pump, the higher prices in the short term will lead to alternate energy sources in the long term.


That's exactly what they said during the Embargo in the 70s.

Unfortunately, we don't learn. :-B


It was the oil crisis in the 1970s and 1980s that lead to the devolpment of compact cars and the end of the muscle cars. In the 1990s gas prices were historically low and people began to buy SUVs. Now the high gas prices have lead to people buying hybrids decreased SUV sales (look at how bad GM suffering because of its relianice on SUV sales among other factors). Technology is far ahead of where it was thirty years ago, that the demand for oil should become more elastic quicker.
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Postby knapplc » Thu Apr 20, 2006 12:32 am

thedude wrote:
knapplc wrote:
thedude wrote:He accomplished his goal: he made huge profits for his company. He could care less about the externalities.

Thanks to Exxon and the other oil companies, consumers are buying more hybrid vehicles, and using alternate sources of transportation. To be honest, while it is hurting us at the pump, the higher prices in the short term will lead to alternate energy sources in the long term.


That's exactly what they said during the Embargo in the 70s.

Unfortunately, we don't learn. :-B


It was the oil crisis in the 1970s and 1980s that lead to the devolpment of compact cars and the end of the muscle cars. In the 1990s gas prices were historically low and people began to buy SUVs. Now the high gas prices have lead to people buying hybrids decreased SUV sales (look at how bad GM suffering because of its relianice on SUV sales among other factors). Technology is far ahead of where it was thirty years ago, that the demand for oil should become more elastic quicker.

I agree with all of that. What I'm getting at is that we've known for 30 years now that the Middle East is not a good source for the world's oil, yet here we are three decades later still suffering for our lack of foresight and our inability (or unwillingness) to ween ourselves off of oil.

I agree that we have more fuel-efficient cars and that cars are getting smaller again, but the 90s SUV craze proved beyond a shadow of a doubt that we did not and probably will not learn from our past mistakes dealing with oil.

If oil prices go down the "sky is falling" mentality will go away as well, and we'll be having this same conversation in 2025. That's what irks me about this.
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Postby Madison » Thu Apr 20, 2006 1:32 am

http://news.yahoo.com/s/ap/20060420/ap_on_re_mi_ea/iran_oil

Very bottom of the article:

Oppenheimer & Co. oil analyst Fadel Gheit said he considered it unlikely that Iran had any intention of cutting off its oil, the lifeline of its economy.

Gheit noted, however, that there was some truth in Ahmadinejad's comment on developed countries benefiting most from increased oil prices, though the statement would likely be seen as an attempt at "fanning the flames" of a red-hot oil market.

"What he's saying makes a lot of sense. Unfortunately, the source of the comment is going to send jitters in the market," Gheit said.

"The street value (of oil) is triple what OPEC is making," Gheit added, referring to the value of a barrel of gasoline versus the value of a barrel of oil.

Gheit estimated that in London, where the retail price of gasoline is about $6 a gallon, about $150 worth of gasoline can be made and sold from every $50 barrel of oil.

"That is why Exxon Mobil and all the rest make so much money," he said.


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Postby SaintsOfTheDiamond » Thu Apr 20, 2006 1:59 am

Madison wrote:"The street value (of oil) is triple what OPEC is making," Gheit added, referring to the value of a barrel of gasoline versus the value of a barrel of oil.

I'm not trying to justify $3.50 a gallon gas, but you also have to consider the region it's coming from and how much companies have to put into security just to get it out of there. I completely though agree that we should get off of petroleum ASAP so we can just say screw it to the whole Middle East and let them fend for themselves (like that'll ever happen *cough* Israel *cough* :-[). It's a vicious cycle -- our presence there gets us the *cheap* oil yet our presence there is what makes it so expensive to ultimately get it out of there -- that could be virtually (if not entirely) eliminated if we as Americans would just kick our oil habit. :-[
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Postby Madison » Thu Apr 20, 2006 2:17 am

SaintsOfTheDiamond wrote:
Madison wrote:"The street value (of oil) is triple what OPEC is making," Gheit added, referring to the value of a barrel of gasoline versus the value of a barrel of oil.

I'm not trying to justify $3.50 a gallon gas, but you also have to consider the region it's coming from and how much companies have to put into security just to get it out of there. I completely though agree that we should get off of petroleum ASAP so we can just say screw it to the whole Middle East and let them fend for themselves (like that'll ever happen *cough* Israel *cough* :-[). It's a vicious cycle -- our presence there gets us the *cheap* oil yet our presence there is what makes it so expensive to ultimately get it out of there -- that could be virtually (if not entirely) eliminated if we as Americans would just kick our oil habit. :-[


Oh I agree we need to find a better way to fuel our cars. Both of my cars get over 30 miles to the gallon, I keep them tuned, have all the regular maintenance done, etc.

The only issue I have is that I don't like seeing what I consider to be a monopoly on something we all have to buy, steal from everyone. Gas is through the roof, and it shouldn't be. They are robbing us blind with the prices (which are only going to continue to go up) for something that most people don't have a choice but to purchase. I'm the same way with the electric companies, gas (heat) companies, etc. Make the prices fair, and I won't say another word. You don't hear me complaining about the price of cigarettes, beer, makeup, diet stuff, health food, etc, because those are non-essentials. Gasoline is a must buy in today's world. No reason at all for the prices to not be fair. Keep robbing us for no reason, and I'll continue to point it out. B-)
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Postby RugbyD » Thu Apr 20, 2006 8:34 am

SaintsOfTheDiamond wrote:That's capitalism ... you don't like it .. move to Europe where they're paying $5-$6-$7 a gallon.

I agree with you Rugby .. to a point. Could you imagine how viable the alternatives would be if the government gave all the subsidies/tax breaks it gives to the oil companies to the people working on those alternatives? I don't think the oil companies are hurting for revenue streams given this countries (and the emerging markets in Asia) addiction to petroleum based products .. not just gasoline..

All that would accomplish would be to shift our costs from one product to another while keeping our overall tax level the same.
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Postby RugbyD » Thu Apr 20, 2006 8:42 am

Madison wrote:Make the prices fair, and I won't say another word. You don't hear me complaining about the price of cigarettes, beer, makeup, diet stuff, health food, etc, because those are non-essentials. Gasoline is a must buy in today's world. No reason at all for the prices to not be fair. Keep robbing us for no reason, and I'll continue to point it out. B-)

Just because the price is increasing relative to cost doesn't make it inherently unfair. The market supports this price, making it fair. It is not Exxon's problem that demand for their product is inelastic, it is the consumers' problem. I could take public transit to work and lots of other places, but I choose not to. I could drive something other than a 1998 Pathfinder, but I choose not to. I could finesse the thermostat a little more than I already do, but I choose not to (half the blame goes to the roommate on that one).
Last edited by RugbyD on Thu Apr 20, 2006 8:58 am, edited 1 time in total.
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Postby RugbyD » Thu Apr 20, 2006 8:54 am

something to note here is that the sky is not falling, and it never will. Current market prices, which are still pretty low in historical real$ terms, are making new production methods economically viable. Over the past 3 weeks my company has been part of the loan syndicate to finance 2 ventures to consummate development of canadian oil sands, which have massive amounts of recoverable oil. New technologies, financed by the massive profits that people like the Exxon CEO enable, are continuoulsy improving recoverability of oil and exploration techniques. Current conventional oil deposits can only be drained up to 35%. Every time new technology ups that %, our proven reserves increase, helping keep prices down.

If anything, anger over gas prices should be directed and people like Hugo Chavez and the Iranian prez. Unstable collectivist sociopaths make your life more expensive, not the companies charged with the risk of dealing with these psychos.
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Postby Mookie4ever » Thu Apr 20, 2006 9:31 am

His retirement package is actually $400 Million.

http://abcnews.go.com/GMA/story?id=1841989

Exxon is giving Lee Raymond one of the most generous retirement packages in history, nearly $400 million, including pension, stock options and other perks, such as a $1 million consulting deal, two years of home security, personal security, a car and driver, and use of a corporate jet for professional purposes.

Last November, when he was still chairman of Exxon, Raymond told Congress that gas prices were high because of global supply and demand.

"We're all in this together, everywhere in the world," he testified.



My opinion in a nutshell is that I don't have a problem with the concept behind this but I do have trouble with the amounts.

Exxon is a widely held public company so when it makes a $36 billion dollar profit, that is spread to almost everybody that holds shares and would probably include almost everybody that owns any mutual funds.

Raymond's compensation is tied to company performance so when the company does well (and all of us shareholders) so does he. And if the company doesn't do well neither does he (comparitivly speaking).

But my problem is why does it have to get to these absurd numbers? How much wealth is too much? Forgetting his bonus and retirement package, Raymond made $51 million in salary last year. The story says that this is five times as much as the CEO of Chevron.

I guess I shouldn't begrudge him his money but I see him differently than entrepreneurs. If you get ridiculously wealthy like Gates or Allen by building your own company good for you. These guys made something and had no guarantees of success or even of a minimum wage. I see Raymond as an employee. Sure he was a hard worker and worked his way up through the ranks and contributed to the success of the company but he still works for all of us since we are the shareholders. Is he five times better than the CEO of Chevron? Probably not. Are there dozens of people who could have done the same job? Probably. So I'm not that thrilled by the sums that are being paid out here.

It's not Raymond's fault. He signed an incentive laden contract when he took the job. The people who approved the contract knew that he would only get this kind of coin if the company made a $36 B profit - so it would be a win/win situation. It was fair - still doesn't mean that I have to like it. It didn't have to be that big of a contract, but that's just sour grapes on my part.
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Postby Mookie4ever » Thu Apr 20, 2006 9:34 am

RugbyD wrote:something to note here is that the sky is not falling, and it never will. Current market prices, which are still pretty low in historical real$ terms, are making new production methods economically viable. Over the past 3 weeks my company has been part of the loan syndicate to finance 2 ventures to consummate development of canadian oil sands, which have massive amounts of recoverable oil. New technologies, financed by the massive profits that people like the Exxon CEO enable, are continuoulsy improving recoverability of oil and exploration techniques. Current conventional oil deposits can only be drained up to 35%. Every time new technology ups that %, our proven reserves increase, helping keep prices down.

If anything, anger over gas prices should be directed and people like Hugo Chavez and the Iranian prez. Unstable collectivist sociopaths make your life more expensive, not the companies charged with the risk of dealing with these psychos.


I read yesterday that the current highs are not supported by the current economic reality and that they are being driven up by fear and speculators. Most analysts feel that the price of crude should drop by at least 20% this year. Is this right?

I'll try to find the article online.
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