Governent vs. Oil Companies

On FactCheck.org the question of who makes more money on gas, the government or the oil companies is answered. Well, sort of.


Q:
Does the government really make more in taxes from the sale of a gallon of gasoline than the oil companies do?
A:
Possibly. Both taxes and profits account for a large share, but which is larger depends on too many unknown factors to allow for a clear answer.
Let’s start with the basics. According to the Energy Information Administration, in February 2008 state and federal excise taxes accounted for 13 percent of the average price per gallon of regular gasoline sold in the U.S. That figures to just under 40 cents per gallon as a national average. However, the actual amount paid varies greatly by state. Federal taxes are a flat 18.4 cents per gallon of regular gasoline, no matter the price at the pump. State taxes range anywhere from 7.5 cents to 34 cents per gallon, according to the Federal Highway Administration. And on top of that, the oil industry points to additional taxes and fees, such as sales taxes and inspection and environmental fees, that drive up the state-local fees to as much as 45.5 cents per gallon (in California).And even these figures don’t account for income taxes that the companies pay on their profits. Those taxes would drive the tax total higher yet, but we know of no authoritative source that has attempted to break down how much income tax should be allocated to each gallon of gasoline. One big problem in trying to calculate such a per-gallon amount is that income can be earned on the sale of any number of products besides gasoline, such as diesel, home heating fuel, jet fuel, natural gas, crude oil and whatever else a company might sell. The same goes for profits. The EIA does not attempt to calculate an average figure for the profit earned on each gallon of gasoline. "It’s not that these guys [the oil companies] are obfuscating; it’s that the processes are intertwined," EIA economist Neal Davis told FactCheck.org. He added that trying to reduce profit figures to a per-gallon average for gasoline would be "heroic at best" and "sadly misinformed … at worst."Nevertheless, the oil industry has tried to do something close to that. A publication from the American Petroleum Institute, the industry’s principal lobbying arm, displays a graphic stating that "taxes" made up 15 percent of the price of gasoline at the pump in 2007 (that figure comes from EIA) and showing a figure for "earnings" (a measurement API prefers to straight "profit") of 8.3 percent. This figure is the average earnings for the industry per dollar of sales.On closer examination, however, that 8.3 percent earnings figure turns out to be after-tax income. The pre-tax profit margin would be considerably higher. And that’s only an average. The profits of any particular oil company could be higher or lower. For example, in 2007, ExxonMobil's after-tax earnings were 10.4 percent, much higher than the industry average. Furthermore, any particular gallon of gasoline might have passed through several companies as the product moved from the oil well to the refiner to the retailer that owns the pump.Another complicating factor is that the percentages change from month to month, sometimes dramatically. State and federal excise taxes are generally fixed at a certain number of pennies per gallon, so as the price of gasoline rises, the percentage paid in excise taxes goes down. As shown in this breakdown, state and federal excise taxes made up 32 percent of what motorists paid at the pump in January 2000, when the average price for regular was only $1.29."Unfortunately, there’s no real simple answer," says Lucian Pugliaresi, president of the Energy Policy Research Foundation, which conducts economic analyses of energy issues and is supported by oil companies. It depends on when the gasoline was purchased. "If you bought it right now, I’d say the government is making more." If the gasoline was purchased a month ago or last year, that may not have been the case. And the answer further depends on what type of company the question refers to. Refineries, Pugliaresi says, are hurting right now. "If you’re an independent refinery, the answer is definitely they’re making a lot less than the government." So, to the question of whether motorists pay more per gallon to the government than to oil-company profits, we can say only this: The answer depends on the state in which the fuel is purchased, the company that produced it and sold it, and when the motorist bought it.-Lori Robertson
Sources
American Petroleum Institute. "The Truth About Oil and Gasoline: An API Primer," 31 March 2008.U.S. Energy Information Administration. Gasoline Components History. What we pay for in a gallon of regular gasoline, accessed 8 April 2008. U.S. Department of Transportation, Federal Highway Administration. Tax Rates on Motor Fuel, 14 Feb. 2008.

Copyright © 2003 - 2008, Annenberg Public Policy Center of the University of PennsylvaniaFactCheck.org's staff, not the Annenberg Center, is responsible for this material.


Link here to the site to follow the links in the article. You should also look further into what oil companies have to go through to get rights to drill for oil, and what it takes to refine oil into gas. if you base it on risk, then the government makes a lot of money per risk taken, whereas the oil companies make little per risk.

Hockey Sticks

On the Climate related blogs there is a lot of talk about the "hockey stick" graph. (illustrated below).Basically, this is the graph (true or not) that Al Gore used in his Inconvenient Truth and the IPCC have used to make policy regarding Global Warming. Bishop Hill, has summarized the graph and how it came to be, along with why it may not be as accurate as the "world" believes.

Polar Bears For Dinner

I did some checking on Polar Bears. Just how "threatened" are they? That all depends on the amount of arctic sea ice. Here is what Factcheck.org has to say.

I Love The Egg

A little egg enjoyment.

I got this from Life, Liberty, and Property Blog.

I can't believe anything this good coming from anywhere but Japan, but the english is just too good.

Scientists Against Scientific Consensus

A little more on the "settled" science of global warming, and the universal consensus among the scientific community. I found a link from Glenn Beck to a site where scientists can sign their skepticism of global warming. Apparently 31,000 have signed. They also have a 12 page letter outlining their position.

One big argument that I often hear (even from John McCain) is that true or false what harm is there in reducing our greenhouse carbon output. I will admit there are many goods that come from increasing MPG in cars, switching to some renewable cleaner fuels to improve air quality, conservation to lower out of pocket costs for home energy. But the steps outlined by Kyoto, or subsequent meetings would devastate our economy. Fuel, Food, and luxuries would be so outrageously expensive only the "rich" would be able to afford them. Pretty much all economic progress made over the last 100 years would be undone. And frankly I don't even know what the goal is. Do we want Global cooling? Seems like I remember in the 80's that we were heading for an ice age. Do we want to maintain the current temperature? To that all I have to say is: ENTROPY. Energy required to maintain anything in nature has to be equal to the forces moving to greater randomness. The biggest question is then are in positive or negative feedback. and here

Al Gore, Smarter Than You Might Think

I used to think Al Gore was an idiot. What would our country be like if he were elected president? But, now just look at how much money he is making, mostly from climate change hysteria. His speech challenging the government to 100% renewable energy in 10 years seems absolutely ridiculous, but can you imagine just how much money that will bring him? Just in case people don't listen to his prophetic word, and if it turns out he is right he has a plan.

Good luck "Gore-Al" and may your posterity prosper for ever!!

Stop Global Warming

stopglobalwarming.org teaches about global warming, and how to stop it (in case you want to). Apparently all the science points to a unanimous consensus such that further study on the cause of global warming appears to be worthless.

The results are in and the reality of global warming is beyond dispute or
debate. It’s not just an environmental issue. It affects our public health
and national security. It’s an urgent matter of survival for everyone on
the planet — the most urgent threat facing humanity today. It’s going to
take action from you and all of us working together. Global warming isn’t
opinion. It’s a scientific reality. And the science tells us that human
activity has made enormous impacts to our planet that affect our well-being
and even our survival as a species.

The world’s leading science
journals report that glaciers are melting ten times faster than previously
thought, that atmospheric greenhouse gases have reached levels not seen for
millions of years, and that species are vanishing as a result of
climate
change. They also report of extreme weather events, long-term droughts, and
rising sea levels.

Roy Spencer testified before congress on June 22, 2008, mostly explaining that the climate models used in many research in global warming are not all correct.

While it will take some time for the research community to
digest this new information, it must be mentioned that new research
contradicting the latest IPCC report is entirely consistent with the normal
course of scientific progress. I predict that in the coming years, there will be
a growing realization among the global warming research community that most of
the climate change we have observed is natural, and that mankind’s role is
relatively minor.

I hope that the Committee realizes that, if true, these new
results mean that humanity will be largely spared the negative consequences of
human-induced climate change. This would be good news that should be celebrated
— not attacked and maligned.
And given that virtually no research into
possible natural explanations for global warming has been performed, it is time
for scientific objectivity and integrity to be restored to the field of global
warming research. This Committee could, at a minimum, make a statement that
encourages that goal.

Any valid study that shows discrepancies in the "established, beyond dispute or debate" science should be celebrated. People that so adamantly insist on environmental impact studies for any new development, are so willing to believe that the earth is imminent peril, that they are willing to stop as much carbon producing industry as to revert back to life as it was in the 1800's, without an objective evaluation of the science. And taking the country's economy down with it.

They don't want the price of gas lower, that would mean more carbon emitting cars.

They don't want a thriving polar bear, that would mean admitting the arctic really isn't melting away.

I learned pretty early on in my scholastic career that if any question on a test spoke in absolutes it was mostly likely wrong. If true in medical science, why would it differ in climate science?