Click amount to donate direct to CounterPunch
  • $25
  • $50
  • $100
  • $500
  • $other
  • use PayPal
Support Our Annual Fund Drive! We only shake you down once a year, but when we do we really mean it. It costs a lot to keep the site afloat, and our growing audience, well over TWO million unique viewers a month, eats up a lot of bandwidth — and bandwidth isn’t free. We aren’t supported by corporate donors, advertisers or big foundations. We survive solely on your support.
FacebookTwitterGoogle+RedditEmail

Big Oil’s Biggest Score

by RALPH NADER

Four years ago, gasoline was $1.36 a gallon on average. This past January, gasoline prices were 72 cents lower than they are today at over $3.00 per gallon. Production and refining costs since those time periods have not increased by much. Who’s raking it in?

The oil-producing nations, for one, and the ExxonMobils of the world ­ the giant multinational oil companies. This Niagra of daily profits ­ ExxonMobil is making well over $1250 a second and over $110 million a day ­ does not prompt any action by our oil-marinated Congress and White House.

ExxonMobil just reported a quarterly $10.4 billion profit, up 86 percent from last year’s second quarter. A few in Congress urge an excess profits tax. It is a one-day wire service squib. Others say they want a law on price gouging. It disappears by sunset.

The Senate Judiciary Committee passed a bill a few months ago to authorize prosecution of the oil-producing countries under the antitrust laws. Imagine, Bush suing the countries whose oil powers our cars and economy. The hapless Senate Committee, however, did not propose explicit authority to break up the oil company giants in this country under the antitrust laws.

Look what ExxonMobil is doing with its huge profits and margins. Well it sure isn’t giving its gas station owners any break. Or the poor, as Republican Senator Charles Grassley (Iowa) has urged in vain. The company isn’t putting real money into alternative energy. Last year it assigned three-hundredths of 1 percent of its profits ­ $10 million ­ to renewable energy. It isn’t expanding refinery capacity. A major way the oil companies keep prices spiraling and profits flowing is to maintain tight refinery output.

Where are the excess profits going? One flow is into the huge executive salaries and retirement packages. ExxonMobil’s retired CEO, Lee Raymond, got his rubber-stamp board to give him ­ one man ­ a $400 million going away package. But the big use of Exxon’s profits is buying back its own stock. Check these brazen figures. In the first quarter of this year, Exxon reported spending $5 billion buying back its own shares. This is more than the $4.1 billion it said it would spend on exploration and production.

There’s more. The oil giant said it would spend $18 billion repurchasing its own shares in the next three quarters of 2006. This is great news for Exxon executives with stock options. Greed at its highest, to heck with the energy needs of the country and stopping the gouging of American motorists.

Let’s break down the figure of one year’s stock buyback by ExxonMobil totaling $23 billion which obviously the company does not need for its regular business of finding, refining and marketing gasoline and heating oil. That sum of money alone would reduce the price of gasoline by about 15 cents per gallon if spread nationwide.

Moreover, ExxonMobil, unlike some other oil companies, is even fighting the proposed reduction of the subsidies that Congress gave to the companies’ operations in the Gulf of Mexico when oil was around $40 a barrel. Now at around $75 a barrel, ExxonMobil still wants your taxpayer subsidies.

Back in the Sixties, here is what Congress would probably have done in a similar situation: Impose an excess profits tax and investigate and subpoena oil company records to determine the kinds of parallel prices, restricted refinery outputs (the industry has closed scores of refineries in the past 40 years) and mergers that warrant tough antitrust prosecution. Never would the Congress of those years have tolerated the merger of the number one and number two giants in the oil industry ­ Exxon and Mobil companies.

In the Seventies there was a big fight in Congress over a 10% or so increase in the regulated price of natural gas. Now the industry is free of regulation and the price of natural gas has spiked from ten to fifteen times what it was in the Seventies, adjusted for inflation. There were even calls for a new federal oil company to be a yardstick like U.S. Naval shipyards were for private shipbuilders. Some Senators were ready to turn the oil industry into a public utility ­ “cost plus” regulation.

What to do now, given that the corporate environment in Washington is bent on leaving consumers defenseless? The Foundation for Taxpayer and Consumer Rights (see www.consumerwatchdog.org) out of Santa Monica, California makes three proposals:

First, they want California voters to enact Proposition 87 in November. Called the Clean Energy Initiative, it would levy a profit-based “extraction tax,” which could not be passed on to motorists. The money would be used for development of alternative fuels and more efficient transport vehicles.

Second, pass a tough price-gouging law as proposed by California Attorney General Bill Lockyer and Assembly Speaker Fabian Nunez.

Third, pass Proposition 89, the Clean Elections Initiative on the November ballot in California. This would provide public funding and place limitations on lobbies passing out money in campaign contributions to lawmakers.

Here’s my suggestion. With all the websites and blogs, why can’t a million energy consumers band together to start one big energy reform rumble that will be heard by both Washington and the oil giants? Don’t even need money for stamps, when you’ve got the Internet. What about it bloggers and all you e-advocates? Or is it all about MySpace?

 

 

Ralph Nader is a consumer advocate, lawyer and author of Only the Super-Rich Can Save Us! 

More articles by:

2016 Fund Drive
Smart. Fierce. Uncompromised. Support CounterPunch Now!

  • cp-store
  • donate paypal

CounterPunch Magazine

minimag-edit

September 29, 2016
Robert Fisk
The Butcher of Qana: Shimon Peres Was No Peacemaker
James Rose
Politics in the Echo Chamber: How Trump Becomes President
Russell Mokhiber
The Corporate Vice Grip on the Presidential Debates
Daniel Kato
Rethinking the Race over Race: What Clinton Should do Now About ‘Super-Predators’
Peter Certo
Clinton’s Awkward Stumbles on Trade
Fran Shor
Demonizing the Green Party Vote
Rev. William Alberts
Trump’s Road Rage to the White House
Luke O'Brien
Because We Couldn’t Have Sanders, You’ll Get Trump
Michael J. Sainato
How the Payday Loan Industry is Obstructing Reform
Robert Fantina
You Can’t Have War Without Racism
Gregory Barrett
Bad Theater at the United Nations (Starring Kerry, Power, and Obama
James A Haught
The Long, Long Journey to Female Equality
Thomas Knapp
US Military Aid: Thai-ed to Torture
Jack Smith
Must They be Enemies? Russia, Putin and the US
Gilbert Mercier
Clinton vs Trump: Lesser of Two Evils or the Devil You Know
Tom H. Hastings
Manifesting the Worst Old Norms
George Ella Lyons
This Just in From Rancho Politico
September 28, 2016
Eric Draitser
Stop Trump! Stop Clinton!! Stop the Madness (and Let Me Get Off)!
Ted Rall
The Thrilla at Hofstra: How Trump Won the Debate
Robert Fisk
Cliché and Banality at the Debates: Trump and Clinton on the Middle East
Patrick Cockburn
Cracks in the Kingdom: Saudi Arabia Rocked by Financial Strains
Lowell Flanders
Donald Trump, Islamophobia and Immigrants
Shane Burley
Defining the Alt Right and the New American Fascism
Jan Oberg
Ukraine as the Border of NATO Expansion
Ramzy Baroud
Ban Ki-Moon’s Legacy in Palestine: Failure in Words and Deeds
David Swanson
How We Could End the Permanent War State
Sam Husseini
Debate Night’s Biggest Lie Was Told by Lester Holt
Laura Carlsen
Ayotzinapa’s Message to the World: Organize!
Binoy Kampmark
The Triumph of Momentum: Re-Electing Jeremy Corbyn
David Macaray
When the Saints Go Marching In
Seth Oelbaum
All Black Lives Will Never Matter for Clinton and Trump
Adam Parsons
Standing in Solidarity for a Humanity Without Borders
Cesar Chelala
The Trump Bubble
September 27, 2016
Louisa Willcox
The Tribal Fight for Nature: From the Grizzly to the Black Snake of the Dakota Pipeline
Paul Street
The Roots are in the System: Charlotte and Beyond
Jeffrey St. Clair
Idiot Winds at Hofstra: Notes on the Not-So-Great Debate
Mark Harris
Clinton, Trump, and the Death of Idealism
Mike Whitney
Putin Ups the Ante: Ceasefire Sabotage Triggers Major Offensive in Aleppo
Anthony DiMaggio
The Debates as Democratic Façade: Voter “Rationality” in American Elections
Binoy Kampmark
Punishing the Punished: the Torments of Chelsea Manning
Paul Buhle
Why “Snowden” is Important (or How Kafka Foresaw the Juggernaut State)
Jack Rasmus
Hillary’s Ghosts
Brian Cloughley
Billions Down the Afghan Drain
Lawrence Davidson
True Believers and the U.S. Election
Matt Peppe
Taking a Knee: Resisting Enforced Patriotism
FacebookTwitterGoogle+RedditEmail
[i]
[i]
[i]
[i]