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July 29 2012

20:13

How Do You Spend $375 Million A Day? Ask The Oil Industry

The average U.S. household has seen both their net worth and their average income steadily decline over the last seven years. Unemployment in the United States still remains at uncomfortably high levels, and the poverty rate is about to reach highs that haven’t been seen since the 1960’s. But as average citizens are struggling to provide food for their families and gainful employment, there are a special few in the U.S.A. who have more cash than they know what to do with. Those special few would be the oil industry.

While most of us in the U.S. were cringing every time that ticker on the gas pump climbed higher and higher, executives at the top five oil companies were squealing with delight as their profits climbed even faster and higher than the prices at the pump.

This week, oil companies are sheepishly coming forward with their 2nd quarter earnings statements, likely praying that Americans forget about the fact that gas prices were recently at near-historic highs in areas of the country. From Climate Progress:
  

The top two corporations on the Fortune 500 Global ranking, Royal Dutch Shell and ExxonMobil, announced their 2012 second-quarter earnings today, bringing the total profits for three Big Oil companies to $44 billion for 2012 or $250,000 every day this year. Exxon profited by $16 billion this quarter, bringing its earnings for 2012 to $25 billion.

The New York Times wrote that Exxon and Shell’s earnings “disappoint,” because energy prices unexpectedly dropped for consumers this summer. Put their profits in the appropriate context, however, and Exxon and Shell still made a combined $160,000 per minute last quarter, even though the top five oil companies benefit from $2.4 billion federal tax breaks every year.
 

That certainly warrants repeating: Exxon and Shell made a combined $160,000 every minute for the last quarter, and still helped themselves to a piece of the $2.4 billion in federal tax breaks and subsidies that flow to the top five oil companies (the grand total for all members of the industry is estimated to be between $4 and $7 billion a year.)

At their current rate of pay by the minute, they are on track to beat their record from last year when the top five oil companies combined earned a total of $261,000 every minute, for a grand total of $375 million a day.

So the ultimate question is how do they spend all that money? The simplest answer is that they spend most of it in ways that only makes them wealthier. Again from Climate Progress:
  

ExxonMobil:

Exxon spent 42 percent — or $10.7 billion — of its 2012 profits buying back its stock, which enriches executives and largest shareholders.

Exxon has spent $17 million lobbying for the past 18 months, making it the top spender in the oil and gas industry. It has spent more than $52 million lobbying for the first three years of the Obama presidency, 50 percent more than in the Bush administration.

Exxon is sitting on $18 billion in cash reserves.

Exxon sent federal candidates $1.3 million in campaign contributions so far this campaign cycle, sending 91 percent to Republicans.

Exxon paid just 13 percent in federal taxes last year, lower than the average American family. Right after Mitt Romney, Senate Minority Leader Mitch McConnell (R-KY) is the top recipient of Exxon federal contributions.

Exxon CEO Rex Tillerson received $24.7 million total compensation.

Royal Dutch Shell:

Shell has spent nearly $22 million on lobbying for the past 18 months, making it the second-biggest spender of the oil and gas industry.

Shell bought back 15 percent of its second-quarter profits, or $900 million.

In its annual report, Shell noted that the number of oil spills increased from 195 in 2010 to 207 during 2011.
 

But Exxon and Shell aren’t the only companies to report massive paydays this week; ConocoPhillips is also apparently rolling in the dough. Here’s how they spent their $2.3 billion in 2nd quarter profits:
  

ConocoPhillips has already spent $1 million lobbying Congress this year. In 2011, ConocoPhillips spent over $20 million on lobbying Congress, making it the top spender of the oil and gas industry.

Conoco has contributed nearly $400,000 to federal campaigns this year, with 90 percent of the contributions going to Republicans.

Conoco is sitting on $1 billion in cash reserves.

The company spent 35 percent more than they earned this quarter — or $3.1 billion — buying back its own stock, which enriches the largest shareholders and executives.
 

Obviously, there’s nothing wrong with a company being profitable. The problem is that the oil industry is profitable at the expense of our national economy and our environment. Oil spills in recent years have cost billions of dollars – money that is coming from U.S. taxpayers – and the ridiculous prices at the pump are taking a huge toll on American families.

And again, at the same time these companies are reaping these profits, we’re giving them an extra $7 billion tip every year. And as long as they keep pulling in these massive profits, they’ll have enough money to pay off the right politicians to keep those billions in subsidies in place. Last year, the total amount spent on lobbying topped $30 million by the oil industry in order to preserve their subsidies, which netted them a whopping 42% return on their investment.

March 08 2012

04:03

Republican Claims About Gas Prices Demonstrate Lack Of Knowledge About “Free Market”

As the national average for gas prices pushes closer and closer towards $4 a gallon, Republicans have wasted no time in attempting to convince the public that President Obama and his “hostility” towards the oil industry is the reason we’re feeling the squeeze at the pump.

read more

May 20 2011

17:16

On Oil Drilling, Which Obama Do We Trust?

Mainstream media has been covering oil in some form or fashion nonstop for weeks. Stories abound over high gasoline prices, oil industry subsidies, and oil drilling. And in spite of all of this coverage and numerous speeches, it is unclear where the Obama Administration stands on the issues.

While on the campaign trail in 2008, Obama told us that he would continue the ban that was in place on new offshore drilling projects in American waters. A year after taking office, he reversed this position and opened up 500,000 square miles of water for oil drilling. Less than a month after opening up these waters, disaster struck as BP’s Deepwater Horizon oil rig exploded and sank, causing millions of gallons of oil to leak into the Gulf of Mexico. After this tragedy, the Obama Administration put a moratorium in place to stop new leases on offshore drilling, going back to his original campaign promise.

Unfortunately, just a year later, the administration has apparently forgotten the lessons we learned after BP’s blowout, as this week they announced that they are not only in favor of opening up more waters for drilling, but are also planning on opening up areas of Alaska for the oil companies to plunder.

So I ask – which Obama do we trust? Campaign Obama? Post-election Obama? Post-BP Obama? Or present-day Obama? <!--break-->
It is incredibly naïve to take any politician for their word during a campaign, and I’ll even go as far as to admit that viewing the issues from outside of Washington may not grant the full picture of the issue, but all of the available research tells us that even if we were to open up every available inch of land for oil drilling, it would do nothing to get us off our foreign oil addiction, or reduce the prices we’re paying at the pump.

The oil-loving Bush Administration actually did a wonderful job proving how little the impact would be if we opened up the Alaskan National Wildlife Refuge (ANWR) for oil drilling. According to their own estimates, the oil would take about a decade or more before it even reached the market, and at that point might bring the price of oil down by about 50 cents per barrel at its peak. That translates to a reduction of about 1 to 3 cents less per gallon of gasoline at the pump. They estimated that there are roughly 10 billion barrels of oil in the wildlife refuge, and since the US consumes 6.6 billion barrels a year, despoiling that wild public treasure would only supply enough oil to completely fuel the United States (no imports or other sources) for about a year and a half. After that, the well is completely dry.

The Gulf of Mexico oil reserves don’t offer much to get excited about either. According to the U.S. Minerals Management Service, the best estimates say that there could be as much as 20 billion barrels of oil in the Gulf (again, at best.) This means that the Gulf could fully supply America for maybe 3 years, if the estimates are correct.

The facts tell it all – the only group that will benefit from increased oil drilling in America is the oil industry. Those of us who aren’t a part of that club will see absolutely no benefit from increased domestic drilling.

But while Americans have been rightly focused on the fact that oil companies are reaping billions of dollars in subsidies from the federal government every year, they’ve turned a deaf ear to the issue of drilling. The U.S. Senate narrowly defeated a measure this week to expand drilling, but with our president pushing for more, and a Republican-controlled Congress pushing even harder, the very leaders who should be working to kick America's dirty and deadly oil habit are instead solidifying our addiction.

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