Exxon, Shell Profit Records Cap an Orgy That Weakened U.S., World Economies, Says Group
October 30, 2008
Santa Monica, CA — ExxonMobil’s $14.8 billion third-quarter profit
reports clears up one thing–now consumers now know where their money
went, said Consumer Watchdog. Exxon’s mind-boggling profit is again the
highest quarterly profit ever reported by a private company, dwarfing
even Shell’s record $8.45 billion, also reported today.
Exxon’s profit for the first three-quarters of the year, $37.4 billion,
is nearly equal to its all-time record yearly profit in 2007 of $40.1
billion. The 2008 profits were reaped as the price of oil rose on
unregulated speculation to over $145 a barrel.
"Consumers got credit card debt and empty wallets, while Exxon got
double-digit billions," said Judy Dugan, research director of the
nonprofit, nonpartisan Consumer Watchdog. “Citizens deserve to be mad.
They should demand that government get back in the business of
protecting them from corporate greed, or the pickpocketing will happen
all over again in the next oil-price bubble.”
Exxon reaped its shocking profit even though its oil and natural gas
production was down 8%, it refined less oil into fuel, and world oil
prices began declining sharply halfway through the quarter. Energy
prices during the last 9 months pushed consumers deeper into debt and
magnified the harm of the financial crisis, said Consumer Watchdog. Yet
government did nothing.
“ExxonMobil’s record profit at this point in time documents the growing
conflict of interest between the oil industry and the economy of the
U.S.,” said independent oil industry analyst Tim Hamilton. “The better
it is for Big Oil, the worse it is for the rest of us.”
Exxon is again spending more on buying back its own stock (up to $35
billin this year) than on finding and drilling more oil ($25 billion).
Its stock buyback for the third quarter was $8 billion. The company
spends less than one-hundredth of a penny of every dollar of profit on
“ExxonMobil is wallowing in cash,” said Dugan. “It is so rich that it
can live in the corporate lap of luxury no matter what its profits are
for the foreseeable future. It is holding nearly $37 billion dollars in
cash on hand, and about $125 billion in company-owned stock, giving new
meaning to ‘piggy bank.’ It is Exxon doing only what is right for
Congress and the White House must plug tax loopholes and remove
superfluous oil subsidies including so-called royalty relief, said
Consumer Watchdog. Congress should certainly reject billions more in
proposed taxpayer subsidies in the form of proposed new manufacturing
The White House and Congress should:
- Plug the loophole that allows Exxon and friends to sell oil to their
own overseas subsidiaries, driving up the price on paper before
bringing the oil to the U.S. This allows the company to evade U.S.
- Oversee and regulate oil refining, to prevent production cutbacks that would keep the price of fuel artificially high.
- Oversee and regulate energy futures markets to quell speculative
bubbles like the one this year that drove crude oil prices to over $145
a barrel and gasoline prices to a record $4.11 a gallon national
average. Such regulation should require financial speculators to pay
higher margins–put more money upfront on trades—and bar exotically
constructed trades that encourage manipulation.
-Despite dropping energy prices, demand steady support for green
energy, including transportation fuels and vehicles, energy
conservation and wind and solar energy.
“Only having cleaner and cheaper alternatives will ultimately lift the stranglehold of oil on the U.S. economy,” said Dugan.
(For historical data on oil profits, see OilWatchdog’s “Oil Profits
Monster” database, a free resource with detailed company-by-company
profit figures since 2000, at www.OilWatchdog.org — The database includes mergers since 2000. Charts showing quarterly and annual profits can also be downloaded.)
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