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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.

July 22 2011

12:15

Koch Brothers And ExxonMobil Join Forces To Fight RGGI With Copy-Paste State Legislation

As we’ve reported over and over again, the popular and successful Regional Greenhouse Gas Initiative (RGGI) and other regional climate agreements are under attack from polluters. Today, a bombshell report by Bloomberg News makes it undeniably clear who is leading the attack, and paints an ugly picture of collusion, influence, and state legislators deep in the pocket of the fossil fuel industry. 

The report shines a light on the American Legislative Exchange Council (ALEC), which serves as a drafting board for industry-friendly state legislation and then subsequently as a sort of mixer for corporations and state politicians who are willing to accept financial favors to bring these copy-and-paste laws back to their home states.

Bloomberg reporter Alison Fitzpatrick 
writes:
The opportunity for corporations to become co-authors of state laws legally through ALEC covers a wide range of issues from energy to taxes to agriculture. The price for participation is an ALEC membership fee of as much as $25,000 -- and the few extra thousands to join one of the group’s legislative-writing task forces. Once the “model legislation” is complete, it’s up to ALEC’s legislator members to shepherd it into law.
Fitzpatrick calls out Exxon Mobil and Koch Industries as two companies whose handwriting (forget fingerprints) are all over the template legislation that forces states out of their regional climate agreements.
The process seems to work, at least to some degree. Within the past year, legistators in at least eight states have introduced provisions to leave their respective emissions reduction pacts. David Anderson, who writes the New Hampshire Primary 2012: Green blog about climate change and the 2012 election, first spotted the template. After doing some heroic digging, he found that in at least six of these states, the legislation introduced was literally copied-and-pasted from the template provided by ALEC. These states are Michigan, Montana, New Mexico, Oregon, Washington (all PDFs), and New Hampshire.

Anderson first spotted the language in the “findings” section of the New Hampshire bill. As he told Living on Earth: “It says ‘whereas there has been no credible economic analysis of the increasing cost of doing business in the state of,’ and then there’s a blank, so, in this case, they inserted the words, New Hampshire.”

When the bill was discussed in committee, Anderson reported this incredible exchange:

The bill’s lead sponsor, state Rep. Richard Barry (R), looked a bit like a dog caught with the family cat in its mouth when he was asked to explain the language at a public hearing; he nervously said that none of the bill’s sponsors had written this particular section, but stopped short of revealing ALEC as the source of the text. That didn’t sit well with Rep. James Garrity (R), chair of the House Science, Technology, and Energy Committee, who later explained, “Our committee does not feel that editorials belong in laws.” The matter was resolved by dropping the ALEC text, and the amended bill went on to pass the House.

The language Anderson found in the New Hampshire bill is the same that Fitzpatrick identified (PDF) as the “eight-paragraph resolution,” that reads, in part, “there has been no credible economic analysis of the costs associated with carbon reduction mandates” and “a tremendous amount of economic growth would be sacrificed for a reduction in carbon emissions that would have no appreciable impact on global concentrations of carbon dioxide.”

Fitzpatrick reports that ALEC’s “model bills, which now total almost 1,000, are listed on its website, although their full texts can be called up only by members.” But the Center for Media and Democracy actually acquired the full texts of over 800 of the bills earlier this month, and posted them at ALECexposed.org.

ALEC has received at least $124,000 from the Exxon Mobil Foundation in dues and sponsorships, but that figure doesn’t include direct grants or gifts from the corporation itself. Greenpeace reveals that the Council has also received at least $408,000 from the Charles Koch Charitable Foundation since 1997.

This isn’t, of course, the first time we’ve seen Koch money directly influencing regional climate pacts.

Last month, Governor Chris Christie pulled New Jersey out of RGGI, stripping the ten state agreement of one of its key cornerstone partners. Next door in New York, Americans for Prosperity, a group whose ties to the Koch brothers are well established, sued the state for its continued commitment to RGGI.
So far, none of the legislative or alternative efforts to pull out of regional commitments have had great traction. New Jersey’s case was unique, as Christie was able to use a controversial executive order, but there's still a lengthy regulatory process to fully extricate the state from the pact, and Democratic leaders in the state senate and assembly are introducing new legislation to strip the governor of his authority over RGGI.

Despite
widespread public support in the Garden State, Christie, who doesn’t deny that humans are causing global warming, claimed that RGGI was "a failure and an ineffective approach to reducing greenhouse gas emissions.” This claim has been widely and summarily dismissed by scores of economists, environmentalists, and five governors who remain fully committed to RGGI. "Governor Christie is simply wrong when he claims that these efforts are a failure," said Maryland Governor Martin O’Malley.

Americans for Prosperity celebrated Christie’s decision, even taking direct credit for it in a public press release: Americans for Prosperity Declares Victory over RGGI Cap & Trade!

The New Jersey chapter of AFP spent roughly $200,000 in the state on advertisements and other public efforts to fight RGGI, and plenty of analysts assume that Christie’s announcement was made to appease the notorious Tea Party funders as he sets his sights on a prospective White House run in 2012.

But while the New Jersey campaign was done in broad daylight, this Bloomberg News bombshell makes clear that Koch-funded organizations are still spearheading shadowy attempts to help states cut and run from their regional climate commitments.

With the prospects for nationwide carbon pricing at a ten-year low, regional agreements like RGGI, the Western Climate Initiative, and the Midwestern Greenhouse Gas Accord seem to hold the best hope for creating a carbon market and generating revenue to fund clean energy and energy efficiency projects. For this reason, no doubt, polluting interests like Koch Industries are sharpening their swords, and their legislation drafting pencils.
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