The Intersection

i-f9ed08a127ce1770428528accd6f0014-exxonmobile.pngDespite the economy, it appears some businesses continue booming. In July, we reported that Exxon Mobil posted a net income of $11.68 billion. Well, record broken. According to CNN, its third-quarter profit was $14.83 billion:

The latest quarter’s net income equaled $1,865.69 per second, nearly $400 a second more than the prior mark.

So new quarter, same question: How about reinvesting some of the profits tax toward alternative energy research?

Comments

  1. #1 Philip H.
    October 30, 2008

    Even better question – how about buying GM/Chrysler (who are looking for about that much money from taxpayers) and then developing mass produced hydrogen fuel cell cars?

  2. #2 MattXIV
    October 30, 2008

    How about reinvesting some of the profits tax toward alternative energy research?

    How about actually thinking about the economics of taxing industries higher when they’re more profitable because the sale price of their product has increased? Prices are how companies are informed of changes in demand – when they’re increasing quicker than marginal cost, it’s a signal to sell more, when they’re increasing slower, it’s a signal to sell less. Taxes increase effective cost, thus signalling to produce less. Thus, “windfall” taxes encourage companies to produce less when demand is the highest. Since the marginal cost of oil production increases the more we extract (companies take the easiest stuff to get out first), it also lowers prices when the “windfall” tax is not in effect, since less was extracted during the last “windfall” period. Thus, gas is made more expensive when people need it more and less so when they need it less than the baseline.

    This is basic econ and can be demostrated with simple algebra and the difference between a windfall tax and a per-unit tax on the oil industry would have economic consequences in the billions of dollars.

  3. #3 Ian
    October 31, 2008

    Better yet, how about boycotting Exxon-Mobil completely? These record-profit people are the same ones who baulked at fixing the mess after the Valdez disaster, who are obviously grossly over-charging at the pump, who are spending only one percent of their money on alternative energy research, and who are begging for government handouts for exploration so they can get drain out more oil and make even larger profits.

  4. #4 Dark Tent
    October 31, 2008

    I already boycott Exxon-Mobil, cuz their prices are so high.

    Mobil and Exxon gas station prices are generally among the highest (in my area, at least), so I’m not sure whey anyone would even buy their gas to begin with.

    Perhaps people think their gas is somehow “better”. Or more conservative or something. Damned if I know.

    Some silly people actually believe economics is based on rational decisions.

  5. #5 bigTom
    October 31, 2008

    But quarterly profits are a lagging indicator. In this case of the record high oil prices of last summer. The next quarter should show a record (quarter to quarter) drop in profits, as the price of oil has crashed.

    Hydrogen fuel celled cars? That would be a huge waste of money. (1) Fuel cells are ridiculously expensive, and need a major overhaul every 3000 miles. (2) Our methods of producing hydrogen have poor thermodynamic efficiency. Might as well burn oil or natural gas. We all know that electrification is the way to go for transportation. Hydrogen is an expensive distraction.

  6. #6 Roadking
    January 31, 2009

    How about thanking Exxon Mobile for paying $30 billion in taxes last quarter.

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