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:
Weekend Edition
July 29, 2016
Friday - Sunday
Michael Hudson
Obama Said Hillary will Continue His Legacy and Indeed She Will!
Jeffrey St. Clair
She Stoops to Conquer: Notes From the Democratic Convention
Rob Urie
Long Live the Queen of Chaos
Ismael Hossein-Zadeh
Evolution of Capitalism, Escalation of Imperialism
Margot Kidder
My Fellow Americans: We Are Fools
Phillip Kim et al.
Open Letter to Bernie Sanders from Former Campaign Staffers
Ralph Nader
Hillary’s Convention Con
Lewis Evans
Executing Children Won’t Save the Tiger or the Rhino
Vijay Prashad
The Iraq War: a Story of Deceit
Chris Odinet
It Wasn’t Just the Baton Rouge Police Who Killed Alton Sterling
Brian Cloughley
Could Trump be Good for Peace?
Patrick Timmons
Racism, Freedom of Expression and the Prohibition of Guns at Universities in Texas
Gary Leupp
The Coming Crisis in U.S.-Turkey Relations
Pepe Escobar
Is War Inevitable in the South China Sea?
Norman Pollack
Clinton Incorruptible: An Ideological Contrivance
Robert Fantina
The Time for Third Parties is Now!
Andre Vltchek
Like Trump, Hitler Also Liked His “Small People”
Serge Halimi
Provoking Russia
David Rovics
The Republicans and Democrats Have Now Switched Places
Andrew Stewart
Countering The Nader Baiter Mythology
Rev. William Alberts
“Law and Order:” Code words for White Lives Matter Most
Ron Jacobs
Something Besides Politics for Summer’s End
David Swanson
It’s Not the Economy, Stupid
Erwan Castel
A Faith that Lifts Barricades: The Ukraine Government Bows and the Ultra-Nationalists are Furious
Steve Horn
Did Industry Ties Lead Democratic Party Platform Committee to Nix Fracking Ban?
Robert Fisk
How to Understand the Beheading of a French Priest
Colin Todhunter
Sugar-Coated Lies: How The Food Lobby Destroys Health In The EU
Franklin Lamb
“Don’t Cry For Us Syria … The Truth is We Shall Never Leave You!”
Caoimhghin Ó Croidheáin
The Artistic Representation of War and Peace, Politics and the Global Crisis
Frederick B. Hudson
Well Fed, Bill?
Harvey Wasserman
NY Times Pushes Nukes While Claiming Renewables Fail to Fight Climate Change
Elliot Sperber
Pseudo-Democracy, Reparations, and Actual Democracy
Uri Avnery
The Orange Man: Trump and the Middle East
Marjorie Cohn
The Content of Trump’s Character
Missy Comley Beattie
Pick Your Poison
Kathleen Wallace
Feel the About Turn
Joseph Grosso
Serving The Grid: Urban Planning in New York
John Repp
Real Cooperation with Nations Is the Best Survival Tactic
Binoy Kampmark
The Scourge of Youth Detention: The Northern Territory, Torture, and Australia’s Detention Disease
Kim Nicolini
Rain the Color Blue with a Little Red In It
Cesar Chelala
Gang Violence Rages Across Central America
Tom H. Hastings
Africa/America
Robert Koehler
Slavery, War and Presidential Politics
Charles R. Larson
Review: B. George’s “The Death of Rex Ndongo”
July 28, 2016
Paul Street
Politician Speak at the DNC
FacebookTwitterGoogle+RedditEmail