It is dangerous to be in the petroleum business today.

But the danger is not from perilous oil rig hazards or petrochemical exposures. The danger is from the overflowing rage of consumers convinced that petroleum companies are ripping them off and charging unfair prices at the gas pump.

Anyone in the business will confess to fear and trembling when the subject of gasoline prices come up. No other topic can so quickly transform a mothers' playgroup into an angry mob capable of unspeakable horrors toward an unassuming oil executive out for a stroll.

Why the hysteria? It is a reaction to the reports of record profits for oil companies.

For if we see record gasoline prices in our neighborhoods and then hear of record oil company profits, the natural conclusion is that oil profits came from our neighborhoods.

But where do those record profits come from? In Exxon's case, more than 75 percent came from foreign countries. Only 10 percent were actually derived from gasoline sales inside the United States. It seems the bulk of their profits are made in the global market, and not in U.S. neighborhoods.

While many think oil is controlled by a handful of powerful Americans, the industry is global. Of the top 10 companies in the world, two are American. It is brokers from China and India who are escalating global prices by agreeing to pay $124 per barrel.

And does the word "record" mean "excessive?" A good way to gauge excessiveness is to examine a company's profit margins. Exxon has only an 11 percent profit margin. Chevron is even lower at 8 percent. These are modest by any standard. In contrast, consider that Microsoft enjoys a profit margin of more than 32 percent.

However, the question remains: If oil companies are making so much money on crude oil, why must the price of gasoline be so high? Part of the answer is that not all oil companies make money on crude.

Take Tesoro Corp. for example. They don't own oil fields and must buy crude on the global market to make gasoline. Consequently, this big oil company suffered a net loss of $40 million last year.

The short lesson is that the petroleum industry is large and complex with a variety of operations, subsidiaries and profit centers. Not all are profitable. Profits in one area are needed to cover losses in another.

And where do record oil profits go?

Of the $40 billion that Exxon made in 2007, the U.S. government was the first and largest beneficiary. This means $13 billion went to Uncle Sam. After that, $20 billion went right back into running the business and about $7 billion was given to the owners of Exxon — the shareholders. There's nothing shady going on here.

There is no other industry as scrutinized as petroleum. In April, Congress held a hearing with five top oil companies to answer questions about high gasoline prices. But despite the high-profile setting in an election year, no illegal activity was discovered.

Perhaps the most ironic part is that consumers are often beneficiaries of record oil profits. Have money in a mutual fund? Your money is more than likely invested in Big Oil and making you a participant in those record profits.

Yes, there are reasonable answers and solutions to the high cost of energy.

We must lessen our dependence on foreign oil. But, the solution is to increase our dependence on American oil.

The two largest suppliers of oil to the U.S. (Mexico and Canada) provide us oil not from the Middle East but from our own continent. The federal government prevents us from using our own crude in Alaska and untapped reserves off the Pacific and Atlantic coasts. We are not allowed to access oil fields off Florida, but China removes billions of barrels of crude off the Florida Keys. There is a lot of supply here. But it seems everyone has access to it except us.

The reality is that for the next 30 years or more, petroleum will continue to provide more than 80 percent of our energy. And with a global demand for oil expected to increase by about 35 percent with supply remaining the same, the only certainty is that prices will go higher.

What to do about these rising energy costs? Perhaps the answer is to not focus on trying to lower the cost of oil, but to increase our ability to afford it.

Only an American-styled free-market economy and ingenuity will give us the ability to pay for our American lifestyle and, yes, even higher gasoline prices.

Mike Miyashiro is the manager of Oahu Petroleum Inc. He wrote this commentary for The Advertiser.