Surging gasoline prices bring out predictable and robotic responses about “record oil company profits.” Oklahomans should take such grumbling with a grain of tar sands. Profitable energy companies are good for the state.
We’ve long noticed, though, that consumers, environmentalists and Washington liberals have little to say when oil company profits fall short of records and/or short of comparable periods a year earlier. Companies that take risks in bringing a vital product to market are either demonized for making “too much” money or ignored when they don’t.
Big Oil leaders ExxonMobil, Shell and BP posted “disappointing” earnings for the second quarter of 2013, according to The Associated Press. Despite a relatively high crude price of $100 a barrel, the expense of getting oil out of the ground these days is such that it takes a high per-barrel price to make money.
Oil companies, like firms that produce toilet paper, food and electricity — all essential products — are in it to make as money as possible.
Easy-money oil is mostly gone in this part of the world, but reserves remain high because of hard-money oil, crude available through high-tech extraction or refining methods. This figures in the debate over Oklahoma’s generous incentive for horizontal drilling. State leaders must decide if the cost of the incentive to the state treasury is a worthwhile investment; oil companies must decide if the cost of producing hard-money oil in Oklahoma is a profitable pursuit.
Every three months, public oil companies report revenues and profits. When profits break a record, it’s big news. When they don’t, consumers and the media tend not to notice.
Earning a profit is no vice. Earning record profits is no reason for vitriol.