Re: OT : so this is what our troops are dying for in Afghanistan !

I've been on holiday, so my reply is somewhat late - probably no one is reading this thread any more. Comments below:

dagmargoodboat@xxxxxxxxx wrote:
David Brown wrote:
dagmargoodboat@xxxxxxxxx wrote:
David Brown wrote:
dagmargoodboat@xxxxxxxxx wrote:
David Brown wrote:

I don't think anyone accuses the US administration of invading other
countries in order to reduce the selling price of petrol to the end
users. Prices and profits are only relevant for the top cats that are
in the American ruling class - the aim is for Exxon, etc., to make more
money - no one cares about the price the plebs pay at the pump.
You know, while acknowledging that for sure a lot of people believe
such things, such a firm belief in an omnipotent, omnipresent,
international brotherhood of evil conspirators .... it sounds just
outright bizzarre. One can barely begin to imagine the level of
competence, coordination, communication, secrecy, and discipline that
would be required, yet none of those qualities are in evidence.

"Never attribute to malice that which is adequately explained by
stupidity" ? That certainly seems to cover the way a lot of things are
run (in the USA and elsewhere). I don't think that the Exxon bosses or
shareholders managed to engineer the Iraqi invasion just to increase
their profits, but they certainly take advantage of events like it (and
Katrina - while you could blame the storm on global warming, and
therefore on oil companies, I think a direct relationship is stretching
things a little). My point was merely that any "cheap oil" motivation
of the invasion of Iraq means cheap for the oil companies, not cheap for
their customers.

What a dark, cynical, strange way of thinking.

And, just as strange to me, is that the people who hold this view of
government are the most adamant we need more of it.

James Arthur

P.S. What's the fuss anyhow? Gasoline still seems cheap to me -- at
29MJ/L, I calculate 8KWH/liter, or 30KWHr / gal. Even at $3.00 a
gallon it's only $0.10/KWH, which is 2/3rds of what I pay for
electricity, and a lot easier to cart around.

Petrol here (Norway) is over twice that price, and has been for many
years - long before 9/11 or any invasions.
But surely that's by design, a deliberate policy of your government.
AIUI, Norway has vast petroleum reserves, and is a net exporter
(deriving about half your gross domestic product from it at today's
prices, I calculate). Surely Norway could have cheap gasoline if you
wanted it, but instead you prefer to export oil, and tax your public to
discourage their using it.

Norway charges high taxes for petrol sold here as a deliberate policy,
as you say - it encourages people to be more economical with
environmentally damaging fuel.

But does it succeed? I calculate Norway's oil usage as 20 barrels
annual per-capita, versus 24 barrels in the U.S., and surely we (USA)
are today's standard of excess? In Chile, by contrast, uses the same
amount of oil as you do, but has four times as many people.


I don't have any figures on oil usage, so I'll take your word for it. Two factors that contribute to high usage in Norway are that we are a very long country (for the population), leading to long distances for transport of goods and people, and that oil is often used for other purposes such as heating (though its use here has declined over the years).

Yet, although your usage is close to ours, a great deal of your
economy shouldn't need it: this revenue and GDP is from the sale of oil
itself, an activity which produces, not consumes oil. A much greater
proportion of our economy is still in the production of material
things--industry. So, if making things in the US is a higher
percentage of economic activity--not to mention our use of oil as an
important raw material--shouldn't a slightly higher usage in the USA be
expected, possibly even forgiven?


Norway benefits from high oil prices, no? Or does Norway export its
oil only at the old prices, not the new, higher prices? Is Norway then
profiteering, capitalizing on the world's misfortunes? I certainly
would never think that--it wouldn't occur to me.

Anyway, from here it's hard to see why one would accuse Exxon of
profiteering and manuvering world affairs to its benefit, when your own
government's charging you twice Exxon's price, and also sees fit to
take advantage of the same world circumstances by selling at the same
world market prices.

Your pump prices have gone up as a result of recent years' events,

But the prices were initially very low, very cheap. By my reckoning
they're cheap still. And in your country, people still consider the
product worth buying at twice our price.

and
Exxon has shown absurdly high profits.

Exxon's profits are about 10%. Is that excessive? Your government,
if equally efficient, is making not less than eleven times that profit
rate presently from you, its people. Is that absurd?


What is excessive is how Exxon's profits have risen in recent years. A quick google shows that in late 2005, their quarterly revenue was up 32%, and profit up 75% - just after the big hurricanes. In other words, their costs have gone up (due to infrastructure damage and oil prices), but they have increased their prices to customers well in excess of these increases.

Exxon makes a lot of money because their customers buy a lot of their
products. Is that bad?

Our pump prices are pretty much
the same as they always have been, and the state has raked in its usual
millions in petrol tax.

And therefore your government's profits were even higher in previous
years, when oil was cheaper. Is your government then evil? Or are
they simply trying to do the best they can for you, the people of
Norway who depend on them?


There is a big difference between a government and a privately owned corporation. When a government gets more money (assuming, of course, that it's a reasonably honest and competent government), the money goes to the good of everyone in the country. When a giant corporation makes more profit, most of it goes to a few immensely rich people.

You have an enormous social burden, are using oil sales to fund it,
and, as I examine the issue, only seven years' assured supply. Surely
your government would be derelict in its duty to you, its people, if it
sold oil for anything less than reasonably possible.


You are wrong on a few points here. The great majority of the oil profits (from the drilled oil, rather than from petrol sales) are invested in an "oil fund". The interest rates on that fund are expected to generate far more than the oil itself does now before the oil runs out. Secondly, seven years supply would be a very pessimistic estimate for Norway's oil reserves, although obviously extraction costs will increase later on. Thirdly, there are very substantial gas deposits that will supplement the oil revenues over time.

And Exxon has people that depend on it too. Employees.
Shareholders. Should Exxon do any less for them?

Your answer seems to be "Yes," that 1/11th of the profit your country
charges you is excessive when given to another, that it's "absurd." I
don't understand that.


That's the difference between taxation and corporate profit.

IOW, Norway is certainly a wonderful, friendly, lovely place, and has
an enlightened, modern, freedom-loving government of its people, which
just goes to show that a person or company or country can act in its
own economic interest without being evil, malevolent, or implying other
ill-intent. The price of oil--it's merely supply and demand in action,
which is the fairest way of determining value yet devised.

Some of the Norwegian electricity companies have used similar tricks -
charging customers extra for electricity when there is little water in
the reservoirs, and then selling electricity abroad when there is plenty
of water, giving themselves extra profit both ways. So we are not
perfect over here either.

Again, I don't understand--should electricity be cheaper when there's
less of it to sell? Should the baker mark down his bread when he can't
keep loaves on the shelf? And what public good would that serve?
Oughtn't the baker charge a little more, to ensure that his bread goes
to those who value it most? And to enable him to buy another oven,
that he might bake more bread and feed more people?


Large electricity (and oil) companies are in a very different position from a baker - the analogy is not valid. There is far less competition between them (they are not monopolies, but the cost and inconvenience of changing suppliers gives them some of the power and responsibility of monopolies). The Norwegian electricity companies exist primarily to provide a service to the public - corporate profit is a secondary goal (they were once a state-owned service). So while it makes sense to increase prices during water shortages, to reduce demand, prices should be similarly reduced wet periods and no more electricity should be exported than can be afforded without causing shortages here in Norway. Excess profits should go towards increasing capacity (such as improving the old generators) rather than shareholder profits.


Best regards,
James Arthur

Best Regards,
James Arthur


.

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