Everybody freak out!

DALLAS - Oil industry behemoth Exxon Mobil Corp. said Thursday its third-quarter earnings rose to $10.49 billion, the second-largest quarterly profit ever recorded by a publicly traded U.S. company.

The report comes as high crude prices this year have fueled record profits in the oil industry, triggering an outcry from consumers who were being asked to pay about $3 a gallon for gasoline in early August.

Although crude oil prices began to decline toward the end of the third quarter, the average market price for crude held at around $70 a barrel in the period after peaking above $78 per barrel in July. Oil futures prices have recently traded near $61 a barrel, and gasoline prices have dropped to an average of about $2.43 a gallon.

The world’s biggest public oil company said its net income amounted to $1.77 per share for the July-September period, up from $9.92 billion, or $1.58 per share, a year ago.

HOW DARE THEY MAKE THESE OBSCENE PROFITS!!

/moron

Seriously though, what makes me angry about this reporting is how the media always picks up on the record profits...they never seem to report the fact that while “big oil” is making lots of profits they’re reinvesting all of those profits, plus some, into oil exploration and development.  That reinvestment is going to oil-rich places like North Dakota, where the resurgent oil industry has caused our unemployment rate to hit rock-bottom lows and caused our state budget to have a massive surplus.

Of course, some (see: Senator Byron Dorgan) think the oil companies should be denied these profits with a “windfall profits tax.” That would be a terrible mistake.  America’s demand for oil goes up every single year.  The only way our oil companies can produce the supplies to keep up with demand is to take in massive amounts of profit so that they can turn around and invest that money into the development of oil supply.  If Dorgan got his way and oil companies were hit with a windfall profits tax the need to invest in oil development wouldn’t go away.  America would still need that oil, and the oil industry would somehow have to supply it.

What would probably end up happening is we’d just end up getting more imported oil from non-American companies.  Meaning that the windfall profits tax would not only make oil more expensive, since oil companies would have to raise money to pay the tax and expand oil development, but would also make us more dependent on foreign oil.

While the knee-jerk reaction to stories like this is to accuse the oil companies of being greedy, let’s remember that there’s more to the story.  They aren’t quite as greedy as depicted, and the “solutions” to their “greed” would just make things worse.