Commentary
Big Oil screws America into the ground
By Jerry Mazza
Online Journal Contributing Writer


Feb 1, 2006, 15:37

They’re dancing in the halls at ExxonMobil, but quietly. See, they’ve just set the earnings record for American companies, raking in $36 billion in annual income, even more than Wal-Mart, which makes ExxonMobil number one.

But the truth is, those profits have been stolen right out of America’s pockets, thanks to price-gouging, tax breaks, and friends in high places, including a president who claimed in his State of the Union Address that "America had to break its addiction to oil.” Perhaps he should break his administration’s addiction to propping up Big Oil.

In fact, back at ExxonMobil they’re trying to tone down their success by telling you profit margins in their industry lag far behind those of other gluttonous industries, like pharmaceuticals and banking. Fortunately, legislators and taxpayer groups are waking up and wondering over Big Oil’s big numbers. Especially as the pump numbers move towards three bucks a gallon, putting a hole in every driver’s pocket.

Bizarrely, the numbers put up in January make the company richer than some of the world’s most important oil-producing countries. For instance, ExxonMobil’s $371 billion 2005 gross exceeds the $245 billion gross domestic product of Indonesia, which is an OPEC member and fourth in world population, 242 million to be exact.

ExxonMobil did this by turning in a 27 percent surge in profit for the fourth quarter for that $36 billion profit on total revenues of $371 billion. That’s only about $50 billion less than Bush’s 2005 budget deficit, and somehow they seem connected. ExxonMobil’s overall profit soared to more than 30 percent last year, yet its tax bill magically rose only 14 percent. How does that happen?

Well, if the proposed one-time windfall profits tax gets killed, that will help Big Oil. We’ll see whose pocket Congress is really fighting for, yours or theirs and ExxonMobil’s. What’s more, only last fall the Repuglican Senate renewed some $60 billion in tax cuts over the next five years for the oil boys. Despite the fact that they added only a meager one-year tax increase of $5 billion on America’s largest oil companies, Texas George threatened to veto the tax bill. Of course, House Republicans had no tax measure of their own to reign in the oil profit glut.

On top of that, the Senate would love for the foreign tax credit to get through so that Big Oil’s big three, ExxonMobil, Chevron and Conoco Phillips get handed more payback for taxes paid in other countries. An Exxon spokesman claimed “they needed to do a better job of explaining how the industry works.” Well, I think we’ve got a pretty get idea just looking at the facts. Spare us the spin, the slide shows, and how ExxonMobil accounts for only 3 percent of global oil production. 3 percent of the moon would be a nice piece of real estate to own too.

The White House was also drilling Repuglicans to make sure they added $2 billion more in tax breaks for oil and gas companies to the energy bill that Congress stuck to us last November. It’s amazing how these guys get away with it.

House speaker and lead hypocrite Dennis Hastert said it was a matter of oil companies explaining themselves better and passing out more info on their plans to lower fuel prices by expanding their refining capacity in the US. Truth be known, those creeps haven’t done any noteworthy refining expansion since the '70s, more than 30 years ago. So that’s hardly a solace, Denny.

I know you want your oil boys to bring oil and gas prices down, but action talks and baloney walks, as we used to say in the old neighborhood. And you guys are long on talk and short on action. Tell them that when you meet at the American Petroleum Institute next Tuesday in D.C.

Also, tell them not to roll out those old chestnuts, comparing how Big Pharma’s piglets earned 18.6 cents for each sales dollar in the third quarter 2005, banks 18 cents, compared with your poor old little 8.2 cents at oil and gas companies. Look at the bottom line boys. That’s your business. You’re sitting on number one, wetting your britches.

ExxonMobil’s profit of $36 billion for 2005 zoomed past 2004’s record profits of $25.3 billion, according to Standard & Poor’s in New York. Among big industrial companies, only the Ford Motor Company’s profit of $22 billion in 1998 comes close. But look at Ford, now, sliding into bankruptcy just like GM. What goes around comes around. Even old money-grubbing Wal-Mart ended 2005 by slipping down in net income to a mere $10 billion on $285 billion in sales. Tides, like the winds of change, can turn sharply, and people don’t forget your unmitigated greed and corruption.

They won’t forget that your profits rose mostly through higher prices for oil and natural gas, and also for higher profit margins at your refineries. Then there’s the start of oil production at a project on Sakhalin Island in Russia’s Far East and another windfall from a stake in Sinopec, an energy company China’s government controls. You don’t have to be a rocket scientist to see all the hands in all the pies. But watch those Ruskies. They’re coming for you, among others.

ExxonMobil production in oil actually dipped 1 percent around the world, stymied by trouble at the Gulf of Mexico platforms and the hurricanes. And the Middle East and Venezuela outlook isn’t too rosy either. New reserves seem to be eluding the boys one way or the other.

Also, the political ups-and-downs of nations like Iran, Nigeria and Venezuela may be keeping oil prices high for now, but don’t count on it going on forever. One of these days, a real House and Senate, not these shills and shill president, talking from both sides of their mouths, will bring in some bills that really concentrate on conservation, alternative fuels, ethanol, hybrid cars, and even a hydrogen-cell engine.

Remember the dinosaurs, and how in their very hugeness, they sunk to the bottom of the tar pits one day, the quicker to vanish from the face of the earth. That’s all we wish for ExxonMobil, every one of us who has ever stood at a pump and watched his income pissing into a thirsty thank. Let’s hope it’s not too long till their tiger is extinct, and the roar of the people echoes in their collective ears. In short, have a nice day, boys--even you Mr. Bush--while it lasts.