In an announcement that surprised absolutely no-one, energy corporations continues to set records for quarterly profits. The heavyweight, ExxonMobil, reported profits of $11.68 billion in three months. Demand starting falling earlier this year. It’s taken a while for oil and gas prices to follow, and they certainly haven’t fallen by similar percentages, but profits are still skyrocketing.
I wanted to spend some time discussing the language of the CNN-Money article. One sub-headline reads: “Pricey oil cuts both ways”. The richest among us continue to try to throw a pity party for themselves. The only thing that results from high oil prices that oil corporations have to buy is their profits are less than they otherwise would have been. The rest of us should be grateful that Exxon only made $11.68 billion. It could have made even more!
In an attempt to parry criticism levied at corporations like Exxon, more articles like this one are starting to include descriptions of “where the money is going”. The article touts the $7 billion Exxon spent on finding and producing more oil. Interestingly, production still fell 8% from year-ago levels. $7 billion just doesn’t get you what it used to, I guess. The real problem isn’t locating new oil – corporations know where plenty of it is. It’s the lack of refining capacity in the U.S. Remember, a new refinery hasn’t been built in 30 years.
The article mentions $10.1 billion went to shareholders in dividends and stock buybacks. It goes on to bring up all the taxes Exxon and others have to pay. Waaaaaah!
In terms of governmental policy, the corporate welfare Exxon and others are enjoying should be shut down. With demand continuing to increase and corporations working to keep supply down, their profits will continue to set records. Why should the American taxpayer give them more of their hard-earned money?
Another point on corporations locating new oil and wanting more off-shore areas to be opened for lease: when will the corporate media bring up the fact that the Gulf of Mexico was opened up for leasing two years ago? Oil and gas prices have shot up ever since. Where’s the oil? Where’s the relief at the pump? The answer is easy: corporations are sitting on those leases, which helped cause the increase in price and thus in their profit. Corporations have no real interest in increasing supply. They’re sitting on a resource that is dwindling and they know it. If Congress is stupid enough to open off-shore areas, prices will not go down. The facts in the past two years bears that out. It sounds really good right now while we’re all paying more than we ever have for gas. The best way to bring down prices in the environment set up by the big energy corporations and their lackeys in our government? Decrease demand.