The oil company gusher
Exxon-Mobil earned 69 percent more during the first quarter than a year ago, and the industry is trying to keep a $4 billion annual tax subsidy
Exxon-Mobil’s first quarter earnings of $10.7 billion are up 69 percent from last year. That’s the most profit the company has earned since the third quarter of 2008 — perhaps not coincidentally, around the time when gas prices last reached the lofty $4 a gallon.Skip to next paragraph
Robert is chancellor’s professor of public policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Clinton. Time Magazine named him one of the 10 most effective cabinet secretaries of the last century. He has written 13 books, including “The Work of Nations,” his latest best-seller “Aftershock: The Next Economy and America’s Future," and a new e-book, “Beyond Outrage.” He is also a founding editor of the American Prospect magazine and chairman of Common Cause.
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This gusher is an embarrassment for an industry seeking to keep its $4 billion annual tax subsidy from the U.S. government, at a time when we’re cutting social programs to reduce the budget deficit.
It’s specially embarrassing when Americans are paying through their noses at the pump.
Exxon-Mobil’s Vice President asks that we look past the “inevitable headlines” and remember the company’s investments in renewable energy.
What investments, exactly? Last time I looked Exxon-Mobil was devoting a smaller percentage of its earnings to renewables than most other oil companies, including the errant BP.
In point of fact, no oil company is investing much in renewables — precisely because they’ve got such money gusher going from oil. Those other oil companies also had a banner first quarter, compounding the industry’s embarrassment about its $4 billion a year welfare check.
American Petroleum Industry CEO Jack Gerard claims the gusher is due to the “growing strength in our economy.”
Baloney. If you hadn’t noticed already, this is one of the most anemic recoveries on record. $4-a-gallon gas is itself slowing the economy’s growth, since most consumers are left with less money to spend on everything else.
Gerard then claims the giant earnings “reflect the size necessary for [American] companies to be globally competitive with national oil companies” around the world.
Let’s get real. The crude oil market is global. Oil companies sell all over the world. The price of crude is established by global supply and demand. In this context, American “competitiveness” is meaningless.
Republicans who have been defending oil’s tax subsidy are also finding themselves in an awkward position. John Boehner temporarily sounded as if he was backing off – until the right-wing-nuts in the GOP began fulminating that the elimination of any special tax windfall is to their minds a tax increase (which means, in effect ,the GOP must now support all tax-subsidized corporate welfare).
Boehner is now trying to pivot off the flip-flop by reverting to the trusty old “drill, drill, drill” for opening more of country to oil drilling and exploration. “If we began to allow more permits for oil and gas production, it would send a signal to the market that America’s serious about moving toward energy independence,” he says.