Rising Gas Prices and Big Oil's AgendaWashington, D.C. - Institute for Public Accuracy - infoZine - Wenonah Hauter is director of Public Citizen's Critical Mass Energy and Environment Program; Hauter said yesterday: "Since Bush became president, the largest five oil companies operating in the U.S. -- ExxonMobil, ChevronTexaco, ConocoPhillips, BP and Shell -- have enjoyed profits of $254 billion, with ExxonMobil leading the way with profits of $89 billion.
"Clearly, there is a direct correlation between record prices paid by consumers and record profits enjoyed by oil companies. For example, the profit margin for U.S. oil refiners has shot up 79 percent from 1999 (the year Exxon and Mobil merged) to 2004. But rather than hold these price-gougers responsible, the energy bill signed by Bush this month gives $6 billion in tax breaks and subsidies to oil companies."
James Paul, executive director of the Global Policy Forum, has written several reports about oil including "Oil in Iraq: The Heart of the Crisis." He said yesterday: "Exxon, as the world's biggest and most profitable company, wields enormous power in Washington and in most other capitals as well. The company has plenty of lobby funds, as it enjoys more revenue than 185 national governments. Exxon has blocked a U.S. national policy on climate change and fought against environmental laws. Oil company interests are not only crucial in the war in Iraq, but also other conflicts, such as Iran. As world oil supplies begin to diminish, big oil dreams of ever-higher profits, and more oil wars to seize new and lucrative concessions."
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Record Prices Mean Record Profits for Oil CompaniesAs American consumers increasingly feel the pinch at the pump, oil companies have watched their profits soar.
The newest numbers from the second quarter of this year show Exxon Mobil with a 32 percent increase in earnings over this time last year — that's more than $7.6 billion.
BP saw a profit increase of 38 percent, totaling $6.7 billion, while Conoco Phillips — the third largest oil company in the country — recorded a 56 percent increase in profit, more than $3 billion.
"The huge profits are enormous because the public is drastically overpaying what it costs to produce," said Joan Claybrook, president of the consumer advocacy group Public Citizen.
Many of these companies long ago bought oil reserves at prices of $10 to $25 a barrel. With prices peaking near the $67 mark, the profit margin has been enormous.
Even more eye-opening is the profit in Saudi Arabia. Saudis are making an average of $208 million more each day since the increase in crude oil prices first began in December 2003.
Will Profits Lead to Solutions?
"The answer is yes, but the impact of those is not immediate," said Mike Rothman, the head of integrated oil research for the International Strategy & Investment Group.
Consumer advocates say Congress is doing nothing to speed up the process, instead passing an energy bill that gives tax breaks to the oil industry.
"They got $6 billion in the energy bill over 10 years. That's a huge, huge amount of money," said Claybrook. "And you'd think with the price of oil at $65 a barrel, they didn't need any new incentives."
http://abcnews.go.com/WNT/story?id=1029991
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