Gas Profits

Inspired by Rush today:

Exxon's profit per gallon of gas: $.09
Exxons's 3-month record profit: $8,400,000,000

Federal government's tax per gallon of gas (as per Neil Cavuto): $.19

Mathematically, that means that the government, in the same time period, made essentially twice as much as Exxon. That is:

.09/8,400,000,000 = .19/x
x = 17,733,333,333

In other words, the Federal government's (unmentioned) record revenue last quarter: $17,733,333,333

And, it must be pointed out, the government made that proportionally greater revenue for work, risk, and investment they are disportionally NOT at all involved in. But that is the nature of taxing in general (hence, some think of taxing as robbing) and not of this situation demonstrating, once again, the failure of American economic education. At any rate, it is hypocritical, ingrateful, and a blinkered demagoguery that condemns a party making its just share while the demagogue takes twice as much.

UPDATE:
from Powerline, John quotes Republican Congressman Mike Conaway of Texas:

Congress's actions must be rationally based on economics and the realities of global energy markets. We must not fall into the political trap of knee-jerk reactions that will only worsen our problems.

There is a great hypocrisy in America's national energy policy. As long as politicians continue to demagogue energy companies and oppose legislation that addresses the long-term problem of rising energy costs, we will continue to fail the American people.

Yes, oil companies are making large sums of money in real dollars; however it is disingenuous to simply look at the raw dollar amounts without looking at these numbers in the proper economic context. We need to look at the percent of return these companies are making. In reality the oil and gas industry's earnings are easily comparable to other industries and in many cases lower.

According to Business Week and Oil Daily magazines, the oil and natural gas industry earned 5.7 cents for every dollar of sales compared to an average of 5.5 cents for all U.S. industry over the past five years. By contrast in the third quarter of 2005 the pharmaceuticals industry made a profit of 18.6% per dollar of sales versus 7.6% for the oil and gas industry. The average profit per dollar for all US industries is 7.9%. ***

It is time for Congress to look at the facts. It is the global market place and the law of supply and demand, not greedy oil companies that are responsible for higher prices. The price of a barrel of oil is set by the global market not by multinational energy companies. When some in Congress refuse to allow for domestic and deep sea energy exploration that would increase supply and reduce cost, the problems get worse. We must enact legislation that would open ANWR, expand refinery capacity, reduce costly fuel regulation and allow for deep sea exploration. These are long-term issues that could have made a difference today had we avoided political posturing and addressed them years ago. It isn't too late for us to do the right thing now and begin enacting common sense legislation like increasing supply and increasing research and development regarding alternative sources of energy.

We must stop allowing the issue of rising energy costs to be clouded with misinformation and politically motivated emotion.

John wraps up with this reflection:

I want the oil companies to make enormous amounts of money. I want them to make enormous amounts of money so they can spend it on drilling wells and building pipelines and refineries. I talked to an oil executive recently who told me that the fact that we can't expand our refining capacity is a scandal in terms of the public interest, but is actually good for the oil companies' profitability. Look at it this way: if the oil companies agreed among themselves not to drill for oil in new locations like ANWR, and not to build new refineries, so as to limit the supply of oil and thereby drive prices higher, it would be illegal; indeed, it would be the greatest price-fixing conspiracy in American history. But it isn't the oil companies that have conspired to limit supply and thereby drive prices higher. It is our government that has foreseeably, if not intentionally, achieved this ignoble end.

UPDATE 2 (Friday):
Further context for the record energy industry profits from the AP:

WASHINGTON - Casting off an end-of-year lethargy, the U.S. economy bounded ahead in the opening quarter of this year at a 4.8 percent pace, the strongest growth spurt in 2 1/2 years.