Exxon: not enough profit in U.S. retail gas operations

I have to feel real sorry for the poor folks at Exxon (and their competitors like Royal Dutch Shell and BP Plc):

Exxon Mobil Corp said on Thursday it is getting out of the retail gas business in the United States as sky-high crude oil prices squeeze margins.

...

"We are in a very, very challenging market. Margins are reduced," said Nair. "We feel the best way for us to grow and compete is through our distributor network."

In the current environment, the company's profits from its retail unit are "somewhere close to a rounding error," said Mark Gilman, an analyst at the Benchmark Co.

He said Exxon was following competitors like Royal Dutch Shell and BP Plc in moving away from ownership of service stations.

"The retail gasoline business is a highly volatile and typically low return kind of business and thus the decision," Gilman said.

Exxon made more than $40 billion in 2007, most of which came from its oil and gas production around the world.

"I think the decision came that it's more of a headache than its worth," said Oppenheimer & Co analyst Fadel Gheit.

Although the company does not release profit margin figures for its retail arm, Gheit estimated the stations' margin was between 10 percent and 15 percent, about one-third its margin on crude oil production.


MG - this would make the margin on crude oil production 30% - 45% so, apparently, they will sell their stations to SOMEBODY or SOMETHING who will be satisfied with a 10-15% margin? or not. If not, then that somebody or something would apparently have to increase the prices to raise the profits.

MG - but how real is PEAK OIL? If peak oil is a reality, and the world is at or past PEAK, then the future of running the gas stations is grim. And it makes much good sense to unload them to some sucker at an inflated price because as less and less oil is produced, less and less gasoline will be available, and more and more stations will have to close.

Time to get back

Paul Krugman discusses how the current administration has pulled the US back into a time when American-produced food was NOT safe and when muck-raking journalists told the story. Here's an incredible paragraph from Krugman's NYT column:

One amazing decision came in 2004, when a Kansas producer asked [the U.S. Department of Agriculture] for permission to test its own cows, so that it could resume exports to Japan. You might have expected the Bush administration to applaud this example of self-regulation. But permission was denied, because other beef producers feared consumer demands that they follow suit.

The Bush administration has forced hundreds of dedicated civil servants out of their jobs and replaced them with ideological hacks (and legacy appointees). There's a lot of damage to be undone.

Mother earth will swallow you

From Wikipedia, some of global warmings affects:

Increasing global temperature ... is expected to increase the intensity of extreme weather events and to change the amount and pattern of precipitation.

MSNBC reports from Iowa:

Dave Koch, a spokesman for the Cedar Rapids fire department, said the river will crest Friday at about 31.8 feet. It was at 30.9 feet early in the morning. In a 1993 flood, considered the worst flood in recent history, it was at 19.27 feet.

"We are seeing a historic hydrological event taking place with unprecedented river levels occurring," added Brian Pierce, a meteorologist with the National Weather Service in Davenport. "We're in uncharted territory — this is an event beyond what anybody could even imagine."

(update - 30 June, 2008)

This editorial cartoon does not draw a direct link between global warming and "natural" disasters. But how much of a stretch is it?

Craving for real nobility

Care to guess the identity of the red-haired maven who typed this paragraph for the NYT:

In a culture obsessed with entertainment, celebrity, buzz, spin, market share, synergy, gestures, decaf skim lattes and cigar bars, we feel diminished and puny. We have developed a craving for real nobility, large principles, passions with scale and profound commitments.

That would be the same cracked pot who yesterday predicted wife-bashing of yet another Presidential candidate is about to begin:

It’s good news for Obama that Hillary’s out of the race. But it’s also bad news. Now Republicans can turn their full attention to demonizing Michelle Obama. Mrs. Obama is the new, unwilling contestant in Round Two of the sulfurous national game of “Kill the witch.”

Obsequiousness to AIPAC

From the Common Dreams web site, Chris Hedges sharply criticizes Obama's speech to AIPAC and suggests a course of events that would follow air strikes on Iran:

Obama went on to blame the Palestinians for the conflict, although the ratio of Palestinians to Israelis killed in 2007 was 40 to 1. This is an increase from 30 to 1 in 2006 and 4 to 1 in 2000-2005.

Obama’s stance is the moral equivalent of assuring the Johannesburg government during the apartheid era that one would support their repressive efforts to punish the restive blacks in the townships.

The deterioration of the conflict in Israel, which would be accelerated by airstrikes on Iran and an ensuring regional war, will propel us into the Armageddon-type scenario in the Middle East relished by the lunatic fringes of the radical Christian right. And so, with Obama’s enthusiastic endorsement, we barrel toward a Dr. Strangelove self-immolation. No one will be able to say we did not go out with a spectacular show of firepower, gore and death. Our European and Middle Eastern allies, who are numb with consternation over our death spiral, are frantically trying to reach out to Tehran diplomatically.

” … There is no greater threat to Israel or peace than Iran,” Obama assured AIPAC. “This audience is made up of both Republicans and Democrats. And the enemies of Israel should have no doubt that regardless of party, Americans stand shoulder to shoulder in support of Israel’s security. … The Iran regime supports violent extremists and challenges us across the region. It pursues a nuclear capability that could spark a dangerous arms race and … its president denies the Holocaust and threatens to wipe Israel off the map. … [M]y goal will be to eliminate this threat.”

Barack Obama, when we need sane leadership the most, has proved feckless and weak. He, and the Democratic leadership, is as morally bankrupt as those preparing to ignite our funeral pyre in the Middle East.

Writing at Counterpunch, former U.S. Senator James G. Abourezk is also quite critical:

It was left to Barack Obama, a candidate who at one time brought a great deal of hope to many Americans, including this writer, to complete the round robin of pandering to AIPAC, first by wearing not only an American flag pin, but one conjoined with an Israeli flag pin as well. Obama’s nomination has improved America’s image around the world, with the realization that, “everyone has a chance in America,” as the saying used to go. But that is what makes his pandering so painful.

...

Over the years U.S. politicians have considered unqualified statements of support for Israel’s objectives to be a throwaway, that is, no political cost and all political benefit for the politician. But those days are forever gone, and the danger of increased violence in the Middle East is much higher than the threat level announced in the nations’ airports close to election time.

...

One would have hoped that Barack Obama would have taken note of the destruction left in the wake of what George Bush thought would be a benign invasion of Iraq, and not try to repeat this kind of mischief with repercussions so serious that the Middle East is on the verge of destabilization.

Not at all astonishing

Fabius Maximus comments on "our" surprise at Muqtada Al-Sadr's popularity and power in Iraq. Some things are really not that difficult to understand:

We invade Iraq, build a chain of large, permanent bases, press for an oil law more foreigner-friendly than Canada’s — and are astonished that a nationalistic leader arises to oppose us?

Prescience

Bob Somersby who writes the incomparable Daily Howler blog has a long memory. In today's column, he returns to a Washington Post article written by Katherine Seelye on July 14, 2000:

“Governor Bush wants to do for America what he's done for Texas—go to Washington and spend our surplus and then more for budget-busting tax cuts, and hope then that somehow it will all add up," Mr. Gore asserted. "The last thing this country needs is an era of Bush economics that brings us back to deficits, high interest rates and high unemployment."

Those who might argue that we don't have high interest rates and high unemployment should direct their attention to the Shadow Government Statistics website which estimates unemployment to be about 14% (as of June 6, 2008) and an inflation rate of about 11.5% (as of May 14, 2008).