Oil companies reported another quarter of record or near-record profits, rekindling old debates about price gouging and a windfall-profit tax.

Even after accounting for lost sales and damages to its rigs and refineries and pipelines in the hurricane-ravaged Gulf Coast region, the third-quarter results were nothing less than breathtaking. Exxon Mobil was up 75 percent over the comparable quarter last year, to $9.9 billion. Royal Dutch Shell up 68 percent, to $9 billion. BP up 34 percent, to $6.5 billion. ConocoPhillips up 89 percent, to $3.8 billion. And pulling up the rear, poor Chevron, up a mere 12 percent, to $3.6 billion.

Although Senate Majority Leader Bill Frist (R-Tenn.) warned the companies that they would be held to account if they were caught gouging consumers, there is little or no evidence that they have. And why should they? The normal dynamics of a market characterized by too little supply, and too much demand, increases profit margins naturally. Whether or not that's a "windfall" -- as Democrats claimed it was -- is a matter of politics and semantics, not economics.

Anticipating the political backlash, oil companies launched advertising and public-relations campaigns to urge conservation and highlight their investments in alternative sources of energy. They also trotted out charts showing that, even with the recent increases, industry profits are merely middling. When pressed by Fox News, Lee R. Raymond, the chief executive of Exxon Mobil, rejected any notion that his company's profits were "obscene."

Profit as a percentage of sales varies widely by industry. Across all industries, however, the measure that companies use to decide where and when to invest is return on equity. And by that measure, integrated oil companies ranked among the top performers on the Fortune 500 last year, at an average of 23.9 percent. This year, the industry's return on equity is almost certain to top 30 percent.

Oil executives say they are using their profits to increase investment in new drilling and refining capacity to ease the shortage and return prices to more reasonable levels. But doing so won't be as easy as many think. After years of low prices, modest profit margins and lagging investment, the people and equipment needed to expand are both expensive and hard to find. And although the White House and Republican leaders are pushing emergency legislation to streamline the regulatory process, environmental regulations are likely to make expansion difficult to achieve anytime soon.

For all their talk about reinvesting profits, the big oil companies are on track to spend more of their $90 billion in free cash buying back stock and paying dividends. And for the fifth year in a row, they will draw down more from their known reserves of oil and gas than they will add.

In the short run, the best hope for reducing energy prices lies with businesses consumers, who are already beginning to adjust thermostats, commuting patterns and choice of new vehicles. That is the other way markets chip away at "windfall" profits and bring supply and demand back into balance.