Record profits reported Thursday by Exxon Mobil and Royal Dutch Shell are:
a) expected
b) obscene
c) good for America
d) a function of free markets
e) all of the above
“It all depends on your perspective,” said Ken Wonstolen of the Colorado Oil and Gas Association.
“I think it’s absurd,” said Rex Wilmouth, director of the Colorado Public Interest Research Group, a consumer advocacy office.
“This is the market operating,” said Carol Dahl, an energy economics professor at the Colorado School of Mines.
“This is a blatant demonstration of profiteering,” said Mark Cooper, director of research at the Washington, D.C.,-based Consumer Federation of America.
Whatever their perspective, none of the analysts were surprised by Exxon Mobil’s third- quarter profit of $9.9 billion and Shell’s $9 billion.
Prices of crude oil, gasoline and natural gas have been rising fast over the past year, then peaking at record levels during hurricanes Katrina and Rita before moderating in recent weeks. The high prices have led to record profits for many companies, including oil giants and Colorado-based natural- gas producers.
Energy lobbyist Wonstolen said the profits have pluses and minuses.
“I don’t think anybody in the industry is happy that these high energy prices are putting a burden on consumers and the economy,” he said. “But they will help companies reinvest capital in new energy production, and that’s a good thing.”
Wilmouth said the profits should generate calls for a federal windfall-profits tax on the energy industry.
“The American public is getting to a point where they are outraged. It’s time to do something about it,” he said.
Economist Dahl said oil profits stemming from high energy prices are a way for the market to balance supply and demand.
“If you have a commodity in short supply, and if you let the market function, that will raise prices and help allocate supply,” she said. “It’s a way for the market to get to equilibrium.”
Staff writer Steve Raabe can be reached at 303-820-1948 or sraabe@denverpost.com.
