Are oil and other energy companies reaping immoral profits in a time of price crunches? It depends on your perspective.
Some folks see big profits as a sign of profiteering off needy folks during Hurricane Katrina and other disasters. There are even some U.S. Senators who talked the oil companies into coming down to Congress to explain how they made so much money while prices were going so high.
The other side of the coin...is that oil companies made a lot of money because:
a) supply got tight as the hurricanes hit oil production facilities
b) prices went up with scarce supply
The Economist has an article (paid regitration required, sorry) defending the oil companies or, more specifically, the basic economics. They argue that this is how supply and demand works and that slicing off oil company profits with a "windfall tax" will just screw us later when poor investment in infrastructure leaves us with even tighter supply and higher prices.
I'm with the Economist on this one. If you prevent people from making money when they serve in a time of tight supply, you remove the incentive to do so. Even if we did something smart like using the entire windfall tax profit to build alternative energy infrastructure, we still leave a specter of arbitrary profit seizure over the energy market. It's not good politics.
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