JLF: Exxon is Taking The World's Money; Our Government is Helping Crank Open Wallets

That seems like a lot of PROFIT.  Has another U.S. company ever had so much profit?  Ford?  Microsoft?  GE?  Not even close.  In fact, the previous record was.... Exxon.  Last year.  $39.5 billion PROFIT.  Now, I'm emphasizing the profit with caps (screaming) because we are talking about money made beyond their operating costs, and we know that those can be padded.  So, even after all of their padding, they still made $40.6 billion in PROFIT.  Still. 
 
How did they do that?  Higher gas prices.  Why?  Well, Exxon claims that the increasing demand of gasoline around the world, coupled with diminished output from OPEC, has raised prices.  That's why we are paying over $3 per gallon of gas.  You do that for every gallon, and all of a sudden, Exxon makes annual revenues of $404.5 billion.  But why is so much profit? 

Now, we aren't talking about HBO, Chevy or Nintendo, things we allocate expendable money to.  We are talking about an expense that is essential to every American.  Even if you're like me and own a biodiesel truck, gas prices still impact you.  See, 100% (rounding up from 99.999993%) of the products you purchase use gasoline to get to your hands.  In addition, a majority of our power plants burn oil to make our electricity.  The price of gasoline impacts you everywhere... and we have no say in what the price is.  See, there is no competition because the gasoline companies work in cahoots to raise prices together. 

I saw Exxon's CEO in an interview last year, and he defended the gas price by saying, essentially, "if the guy across the street raises his price, and we don't, then we will run out of product."  He literally said that.  If the guy across the street raises his prices, business will be TOO good, so he has to raise his price so it stays competitive.  I've never heard of such madness.

Seeing how that "anti-competitive" pricing works, these insane profits should be shared across the industry, right?  Well, they are.  Chevron, the second-largest American oil company, had profits of $18.7 billion last year.  Royal Dutch Shell reported income of $31 billion, the largest figure ever for a British company.

So, what is going on here?  Who can stop this industry-cooperated monopoly?  The only entity that can step in is the U.S. government.  What have they done to help us?  Bush could start an investigation to see why gas prices are higher than ever and why the oil companies' PROFITS are more than any other companies, ever.  Instead, he sits back and says things like, "We need more time to understand global warming.  Here's an economy stimulus package that will help you do things and buy some gasoline."  Well, I exaggerate... he didn't just sit back.  In fact, he went to the Middle East and asked OPEC's members, "If you could be so kind as to make more oil, that would be swell.  If you could.  Now let's hold hands."

Saudi Arabia, and the rest of OPEC, said, "Not so much."

If I was an alien looking in, I'd be thinking, "What?"

We, Americans, are paying so much for gas, it's changing the cost of everything.  Am I the only one who is seeing "fuel surcharges" these days?  I saw it on flowers I bought for my mother.  I've seen it in plane tickets.  I've seen it in taxi prices from the airport.  So, we are getting raped to add to the oil companies' PROFITS, and our President and his cabinet refuse to launch an investigation into the pricing.  Instead he goes to the Middle East like a beggar, like a dog asking for some food from his master.  Why isn't he looking out for us?  Why isn't he demanding increased production?

As I pointed out before, it forces one to think back to Cheney's meeting, one of the first he had once he took office, with the energy companies.  First, he even refused to admit a meeting took place when asked about it.  Eventually his office caved and said he had met with energy companies, but refused to say what they discussed.  Closed doors.  All we know is the second he got into office, he called his energy buddies to the White House for a talk.  Coincidence?  Coincidence that gas prices are through the roof now?  Coincidence that petroleum companies are making more profits than ANY OTHER COMPANY, EVER?  Coincidence that we didn't sign the Kyoto Protocol?  Coincidence that we passed the Clear Air Act that actually loosened environmental standards?  Concidence that this government wouldn't even have the foresight to do what Castro did and force a change in light bulbs?  Not when that money's going into their friends' pockets.  Those coincidences don't exist.  In fact, profits by the five biggest international oil companies have TRIPLED since 2002.

To top it all off, as if the government doesn't funnel enough money to the industry with unchecked pricing, they give them billions of dollars in tax incentives.  For example, the government doesn't currently charge oil companies royalties for the oil they pump from publicly owned waters.  That, alone, is worth about $2 billion a year.  Congress is working on legally changing the loophole in the law because all the Bush government has done so far is asked the companies to VOLUNTEER to pay the royalties.  Are they $#&#*^@ serious?  I'm FULL HOT.

Thankfully, Congress is finally trying to undo a lot of the legislation pushed through by Bush administration and the previous Republican-led Congress.  They are trying to undo that loop hole as well as repeal other royalty incentives.  As summarized by the New York Times, they aim to also: prohibit “royalty relief” for natural gas produced from very deep wells in shallow waters, repeal similar “relief” for companies drilling off the coast of Alaska, repeal a provision passed in 2004 that entitles oil companies to tax credits for “domestic manufacturing” and a $2 billion tax break for “geological and geophysical” expenses in exploration.

Of course, the Independent Petroleum Association of America is outraged by Congress' initiative to repeal tax cuts.  (Not very "Independent," by the way.)  They get very defensive when someone points out how much money they make.  In fact, in an attempt to defend themselves about being responsible for the rise in oil prices, Exxon's been advertising that it spends a lot of money "developing energy resources," planning to spend $20 billion for 2008.  That just means they are padding their pockets as they travel the world to "drill for oil."  They are getting their bank accounts loaded so Exxon could give their CEO, Lee Raymond, a $400 million dollar retirement package when he left office last year.  They also need enough money to pay Cheney and Bush $5 million an appearance once they get out of office.  It makes me sick.  I can't wait for that day when Bush and Cheney ARE out of office.  Maybe then we'll have someone representing us who will actually look out for us.

In terms of Exxon's profits, they claim it's about time.  The Washington Post reported, "Kenneth P. Cohen, Exxon Mobil's vice president for public affairs, said the earnings reflected the company's "long-term, disciplined approach" and investments made a decade ago when oil prices were low."  Looks like their investment was to George Bush's campaign, and MAN is it paying off.

FULL HOT.  I rarely curse in my posts, but this is fucking ridiculous.

Always your pleasure.

  - JLF

Find me on Facebook.com, and join the HAWTaction.com Reader group.  My name there is Johnny LeadFoot (they didn't allow the space).