Bush Impeachment Hearing

[nando]

But government has the right to give, give, give, giive and give to their corporate cronies?

You don't mind that big oil gets a pass on money they owe the US for royalty rights?

what are they giving them though? are they "giving" the oil companies money, or are they taxing them at 50% and giving them 10% back? did the US government really "give" me $600, or did they actually just give me back my own money and call it a windfall?

...actually, they took half of it to pay for taxes (as if I didn't pay plenty). I only got $253 from those fuckers. I'm still bitter about that!

I don't like corporate welfare any more than you - but they are just taking advantage fo the system that was setup for them. sort of like people who live on welfare and food stamps for their entire life.

I think you agree that bigger government and more spending isn't helpful. Then what makes you think Obama is going to shrink government and tax less when everything he's spouted is exactly the opposite? I'm not saying Mcain is our savior - but everything Obama has said directly contradicts what I know and believe to be true. Why would I vote for that?

and why the hell does it always come down to the lesser of both evils? something in this system is really, really broken. I know there are people far more qualified for the job but the incentive to do so just isn't there. I do like the idea of voting out incumbents though - I don't really care who they are.

[nando]

Have you seen the margins on gas? It hasn't gotten better for oil companies. They just are selling a lot more of it. (and vertically integrated to help save $)

profit margins are high at the oil wells, but everywhere else are pretty low. by the time you get to the pump the margins are mere pennies (literally). refineries basically serve as a write off, but it's good that the oil companies are investing billions and billions into them. we need more refining capacity and it creates thousands of high paying jobs - one thing you can thank the EPA for. maybe the only thing..

[Lair]

Frankly, I'll take the unknown of the evils over more of the same. I'm done with the party of George Bush.

Big oil has always paid royalties for drilling/pumping on feredral land. Two years ago (IIRC) Dubya gave them billions of dollars that should be going into the federal coffers by waiving the drilling/pumping fees.


It would be different if they were using those breaks to develop alternative energy or anyhting that would benefit the citizenry.

Instead, they're using most of their profits/breaks to buy back their stock.

From the Houston Chronicle:

July 24, 2008, 10:48PM
Big Oil has more cash than it can use


By LOREN STEFFY
Copyright 2008 Houston Chronicle


Some of the country's biggest oil companies have a money problem. They've got too much of it.

No tears, of course, will be shed for Big Oil, which often is cast as the heartless profiteer, sneering in delight as we motorists wince with every squeeze of the pump handle.

But the oil companies, too, are in a squeeze. Awash in cash, they're having a hard time spending it.

More than three-fourths of the world's untapped reserves are controlled by countries that either ban or restrict access to their reserves. In other words, the best drilling prospects are taken.

Investment in emerging technology remains tentative because most alternative fuels don't yet offer the returns that big oil companies need to generate.

Companies the size of the majors need big projects with the promise of big returns.

To use the industry vernacular, they're looking for elephants, and the circus has left town.

High commodity prices make buying additional reserves expensive. If prices fall significantly, those purchases could wind up as costly mistakes. Besides, the big guys aren't interested in most of the existing production. They sold off marginal fields to smaller industry players years ago.

So now, oil companies are buying themselves.

ConocoPhillips, for example, reported a 13 percent rise in second-quarter profit Wednesday. At the same time, the Houston-based company said it spent $2.5 billion in three months buying its own shares.

In all, ConocoPhillips shelled out $5 billion on its stock last year and plans to plunk down $10 billion this year.

Exxon Mobil and Chevron are doing the same. The three companies combined are spending $125 million a day buying their own shares, according to an analysis by Bloomberg News.
Exploration down?
Companies like to portray buybacks as benefiting shareholders because they reduce the amount of outstanding stock and boost earnings per share.

As the big oil companies' "money problems" mounted, they borrowed a page from the tech industry, which for years argued that buybacks are better than dividends because they channel cash back into the company and fuel growth.

Growth prospects for oil companies, though, are limited by the lack of drilling opportunities.

Take ConocoPhillips. Even as it reported blowout quarterly earnings, its production slipped by 8 percent in the second quarter. Exxon Mobil and Chevron, which report earnings next week, had similar declines in the first quarter.

A recent study found that while absolute capital spending among the world's 25 biggest oil companies more than doubled since 1994, much of that was because of rising costs, according to the Financial Times.

Exploration as a percentage of capital spending actually fell to 18 percent from 26 percent, the FT reported.

With poor growth prospects and share prices that have doubled in the past five years, oil companies may be buying their own stock near a peak.


Good for executives
In other words, the buybacks may not as good an investment as the companies portray them to be.

Buybacks have another benefit, but not for shareholders. They make executive stock options more valuable.

Just days before ConocoPhillips released its earnings, its chief executive, James Mulva, topped the Chronicle's list of highest-paid Houston executives, pulling down a whopping $50.5 million in total compensation last year.

Two other senior ConocoPhillips executives round out the top 10, weighing in with $17 million and $16 million.

Combined, the three received options valued at almost $17 million as part of their total compensation.

As the number of shares declines, it boosts earnings per share and drives up the company's stock price, boosting options' value.

Dividends, on the other hand, simply dole out additional money to all shareholders on an equal basis.

Management has an incentive, as Warren Buffett noted several years ago, to withhold money from dividends and divert it to buybacks.

So while ConocoPhillips raised its dividend, it raised its spending for buybacks more.

At the moment, oil companies' stellar returns may overshadow such concerns, but buying back stock amid declining production isn't a growth strategy.

If the companies can't find a way to reduce the production declines, they'd do more for shareholders by distributing cash through special dividends.

For oil companies, it seems that having too much money is almost as difficult as having too little.

[hugh jass]

what are they giving them though? are they "giving" the oil companies money, or are they taxing them at 50% and giving them 10% back? did the US government really "give" me $600, or did they actually just give me back my own money and call it a windfall?

...actually, they took half of it to pay for taxes (as if I didn't pay plenty). I only got $253 from those fuckers. I'm still bitter about that!

I don't like corporate welfare any more than you - but they are just taking advantage fo the system that was setup for them. sort of like people who live on welfare and food stamps for their entire life.

I think you agree that bigger government and more spending isn't helpful. Then what makes you think Obama is going to shrink government and tax less when everything he's spouted is exactly the opposite? I'm not saying Mcain is our savior - but everything Obama has said directly contradicts what I know and believe to be true. Why would I vote for that?

and why the hell does it always come down to the lesser of both evils? something in this system is really, really broken. I know there are people far more qualified for the job but the incentive to do so just isn't there. I do like the idea of voting out incumbents though - I don't really care who they are.

if there was a viable 3rd party, i think you would have a lot less of the 'lesser of 2 evils' shit. you can thanks the republicans and the democrats for basically writing the rules to exclude everyone else from the playground.

[Lair]

We need a new party.

The party of the people.

THE R3V PARTY!

[rwh11385]

Yeah, i meant refining, distribution, marketing, retail... not crazy money there. Reason independent stations are shutting down and big chain ones too. Big can survive but not little players as easily.

And worldwide demand driving up the price on oil, no wondering pumping it out is profitable.

People should be worried more about finding something that is in demand, especially globally or cannot be replaced by technology or shipped out, instead of being upset someone has short-term success from the results of the marketplace.

[Ryan Stewart]

If Carter took the lives of 4000+ US soldiers for a LIE (or a "mistake" for you repubs), then you'd have a point.

Meh, Kennedy did that and he is considered one of the greatest.

Good or bad just depends on what side of the aisle you are on.

[rwh11385]

Frankly, I'll take the unknown of the evils over more of the same. I'm done with the party of George Bush.

Big oil has always paid royalties for drilling/pumping on feredral land. Two years ago (IIRC) Dubya gave them billions of dollars that should be going into the federal coffers by waiving the drilling/pumping fees.


It would be different if they were using those breaks to develop alternative energy or anyhting that would benefit the citizenry.

What's feredral land?

With everyone whining about expensive gas, it makes sense why politicians would be pressured to have greater incentive to drill here. (might as well be here than there...)

It's not Exxon's job to replace itself. Nor would it be most qualified to do so. They're enjoying the sun before it starts to set.

And a lot of people seem to be ignorantly complaining about actions by the administration to replace oil usage...

[Ryan Stewart]

We need a new party.

The party of the people.

THE R3V PARTY!

All you do is prove that you know so little about anything but being a local autoglass peddler that this "argument" has spiraled into hilarity.

OMFG BUSH GAVE TAX CUTS TO BP BECAUSE THEY ARE BIG IN TEXAS!

:hitler:

[Lair]

What's feredral land?

With everyone whining about expensive gas, it makes sense why politicians would be pressured to have greater incentive to drill here.

It's not Exxon's job to replace itself. Nor would it be most qualified to do so. They're enjoying the sun before it starts to set.

And a lot of people seem to be ignorantly complaining about actions by the administration to replace oil usage...

You don't know what federal land is?

[Lair]

All you do is prove that you know so little about anything but being a local autoglass peddler that this "argument" has spiraled into hilarity.

OMFG BUSH GAVE TAX CUTS TO BP BECAUSE THEY ARE BIG IN TEXAS!

:hitler:

Excellent post, Kansas.

Would read again. A+++

[nando]

Frankly, I'll take the unknown of the evils over more of the same. I'm done with the party of George Bush.

Big oil has always paid royalties for drilling/pumping on feredral land. Two years ago (IIRC) Dubya gave them billions of dollars that should be going into the federal coffers by waiving the drilling/pumping fees.


It would be different if they were using those breaks to develop alternative energy or anyhting that would benefit the citizenry.

Instead, they're using most of their profits/breaks to buy back their stock.

From the Houston Chronicle:

More than three-fourths of the world's untapped reserves are controlled by countries that either ban or restrict access to their reserves. In other words, the best drilling prospects are taken.

Growth prospects for oil companies, though, are limited by the lack of drilling opportunities.

Exploration as a percentage of capital spending actually fell to 18 percent from 26 percent, the FT reported.

and guess what - that includes the USA. much of that is from the liberal majority refusing any oil exploration and drilling in our own back yard. Many of the biggest "banned" reserves are right here. Is Obama going to open those up? or are they going to continue to stonewall us, blame oil companies for high oil prices and continue to support OPEC nations?

You know somebody else who benefits from high prices? the government - 50% of record profits in the BILLIONS is a nice windfall for them - a river of cash that congress loves tapping into. They are already hurting from falling tax receipts - imagine if the oil companies lost half of their profits.

[rwh11385]

You don't know what federal land is?

I know what federal is.

Feredral on the other hand... maybe that's a word in the South... not here though

[Lair]

Big oil already has countless acres of leases where they aren't drilling, and there is no shortage of oil. Drilling won't help anything, and the oil industry isn't about to spend billions of dollars on exploration and drilling when they're making record profits without lifting a finger.

Especially when so many people are eager to blame the high prices on "liberals", "treehuggers", enviros", and Democrats.

It's a win/win for big oil. They rake in the cash and leave everyone else holding the bag.

[Lair]

I know what federal is.

Feredral on the other hand... maybe that's a word in the South... not here though

Are you sure you want to play that game?