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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?
Now
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