NEW YORK - It's hard to celebrate a profit of nearly $11 billion when almost no one wants you to enjoy it.
Exxon Mobil Corp. <XOM.N> on Monday fulfilled the corporate fantasy of reporting the most profitable year in U.S. history, only to be met with fierce public outrage at the achievement.
Still fuming over higher gasoline prices and rising heating oil bills, politicians and consumer groups set off a fresh wave of calls for special taxes against Big Oil after Exxon posted record profits of $10.7 billion in the latest quarter and more than $36 billion for the year.
"Once again, Exxon Mobil has reaped the largest windfall in U.S. history at the expense of hard-working families," Wisconsin Governor Jim Doyle said in a statement. "I hope that this news will finally convince the U.S. Congress to take action and force the oil companies to give consumers a refund."
Exxon, in its earnings statement, said it understood the growing public interest in energy prices, but that its strong results would spur investments to meet energy demand over the long-term.
"Its unfortunate that we are dealing with this criticism of our industry," said Exxon spokesman Mark Boudreaux. "We are doing our part to invest in new oil and gas projects to provide supplies to our customers."
All totaled, Exxon and its top U.S. peers Chevron Corp. and ConocoPhillips reported net profits of $18.58 billion in the fourth quarter and $63.87 billion for all of 2005.
Taken in context, that combined annual profit eclipses the market capitalization of one-third of the blue chip companies in the benchmark Dow Jones industrial average. <.DJI> It also is a larger figure than the entire economies of 131 out of the 184 countries ranked by the World Bank in 2004.
New York Sen. Chuck Schumer and Rep. Edward Markey, a senior Democrat on the House Energy and Commerce Committee, were others who quickly piled criticism on Big Oil.
"The Bush policy of subsidizing wealthy oil companies has proven to be wildly effective in boosting oil company profits, but it continues to harm American consumers and threaten economic growth," Markey said in a statement.
ExxposeExxon, a coalition of 15 environmental and other groups that banded together a few months back, used the record results to launch a fresh attack on Exxon and its policies.
"A company like Exxon Mobil that is making record profits, and is making those profits off the back of American consumers, has a responsibility to invest those profits into responsible energy policies," said Shawnee Hoover, a campaign director for the coalition. "And that is precisely what Exxon is fighting."
MEDIA BLITZ
Though the calls are more of a public relations nightmare for Big Oil at the moment, the energy industry fears it could quickly turn into something more punitive from Congress.
The last time Big Oil reported quarterly earnings the heads of top oil companies were hauled up before the Senate to defend their profits and explain why a windfall tax should not be levied on them.
This time, the industry has tried to fight back even before some of its largest names reported profits.
The industry launched a media blitz last week, trying to convince reporters and the public that a $10 billion profit is not just a $10 billion profit but rather a comparably reasonable rate of return for each dollar of sales.
The American Petroleum Institute took a full-page ad in the New York Times on Jan. 26 with a chart showing how many cents of profit various industries made over the last five years for each dollar of sales.
Oil and natural gas came in at 5.8 cents per dollar, according to the API, versus 10.8 cents for real estate, 16.2 cents for pharmaceutical companies and 17.3 cents for banks.
"What many may find surprising is that, on average over the past five years, the profitability of America's oil and natural gas industry is far less than many other major industries, like banks, pharmaceuticals and real estate," the advertisement said.
source: http://today.reuters.com/investing/financeArticle.aspx?type=governmentFilingsNews&storyID=URI:urn:newsml:reuters.com:20060130:MTFH48273_2006-01-30_22-43-07_N30326104:1 30jan2006
ExxonMobil is the only major oil company that questions the link between the burning of fossil fuels and global warming. ExxonMobil has spent millions funding junk science to hide the urgent need to address global warming. ExxonMobil has invested next to nothing in renewable energy sources. Moreover, ExxonMobil has been the most ardent opponent of domestic and international efforts to cut global warming pollution. When confronted with these facts, ExxonMobil inevitably responds that it is funding the Global Climate and Energy Project (GCEP) at Stanford University. Read below for the truth behind ExxonMobil’s investment in this project.
What is the Stanford Global Climate and Energy Project?
GCEP is a 10-year, $225 million project to “conduct fundamental research leading to the development of new low greenhouse gas-emission energy technologies for the future.” The project’s four sponsors are ExxonMobil, General Electric, Schlumberger, and Toyota. GCEP’s research is currently focused on hydrogen, advanced fossil fuel combustion, and carbon capture and storage with a secondary focus on solar energy and biomass.1
Is the GCEP Project Enough?
GCEP’s research is focused on making fossil fuels burn cleaner and dealing with carbon after it has been released, which are useful endeavors but do little to advance renewable energy technologies and significantly cut global warming pollution before it is released. In addition, the technology developed may not be available for commercial application for at least a decade. Moreover, GCEP has no quantifiable goals in terms of reducing global warming pollution and includes no guarantee that ExxonMobil or any of the sponsoring companies will apply the technologies developed.
Putting ExxonMobil’s Financial Contribution in Perspective
ExxonMobil touts its 10 year, $10 million per year commitment as the “largest ever investment in independent climate and energy research that is specifically designed to look for new breakthrough technologies.”2 To put this contribution in perspective:
• The company’s $100 million pledge represents just two days of its 2004 profits and is dwarfed by ExxonMobil’s annual expenditures for oil and gas exploration, totaling more than $1 billion in 2004 alone.3
• ExxonMobil CEO Lee Raymond made about four times as much in salary and exercised stock options in 2004 as the company gave to GCEP that year.4
• Shell has spent about $1.5 billion since 1999 building a business in renewable energy, mostly solar and wind power.5 BP has spent about $500 million on solar since 2000 and about $30 million on wind over the past three years.6
Renewable Energy and Fuel Efficiency: The Real Solutions
Investing in the technologies of tomorrow should not preclude implementing the solutions we already have today. Numerous studies have documented the environmental and economic benefits of renewable energy. The Union of Concerned Scientists (UCS) looked at the benefits of passing a renewable energy standard requiring that 20 percent of America’s electricity come from renewable sources by 2020. UCS found that under a 20 percent by 2020 standard, total consumer savings from lower energy prices would be $49 billion by 2020. The standard also would reduce power plant carbon dioxide emissions by 434 million metric tons per year by 2020—a reduction of 15 percent below business-as-usual levels.7 UCS also found that if the Bush administration increased new-passenger-vehicle fuel economy to 40 mpg by 2015, we would reduce our oil dependence by 2.3 million barrels per day and cut global warming pollution by 106 million metric tons per year by 2015.8
An Honest Dialogue
“The world faces enormous energy challenges. There are no easy answers. It will take straightforward, honest dialogue about the hard truths that confront us all.”9
– ExxonMobil corporate advertisement
In a recent corporate advertisement, ExxonMobil called for an “honest dialogue” about the world’s energy challenges. We couldn’t agree more. That’s why the Exxpose Exxon campaign is calling on ExxonMobil to stop funding quasi-media outlets and junk science at think tanks to mislead the public about the broad scientific consensus on the causes of and solutions to global warming. ExxonMobil has spent $15 million since 1998 funding these activities, designed to undermine domestic and international efforts to address the largest energy challenge of them all—global warming.10
Refreneces
1 GCEP website, http://gcep.stanford.edu/.
2 ExxonMobil corporate advertisement, Energy and Environment, http://www2.exxonmobil.com/corporate/files/corporate/campaign05/energyandenvironment.pdf.
3 ExxonMobil, 2004 Summary Statement of Income, accessed July 4, 2005 at http://www.exxonmobil.com/corporate/files/corporate/AR_2004_statementincome.pdf.
4 “Exxon CEO's 2004 paycheck: $38 million,” Associated Press, April 14, 2005.
5 Jeffrey Ball, “Exxon Chief Makes A Cold Calculation On Global Warming,” Wall Street Journal, June 14, 2005.
6 Jeffrey Ball, “Exxon Chief Makes A Cold Calculation On Global Warming,” Wall Street Journal, June 14, 2005.
7 Union of Concerned Scientists, Renewing America's Economy: A 20% National Renewable Electricity Standard Will Create Jobs and Save Consumers Money, September 2004. Available at www.ucsusa.org/clean_energy/renewable_energy/page.cfm?pageID=1505.
8 Union of Concerned Scientists, Creating Jobs, Saving Energy and Protecting the Environment, July 2004. Available at http://www.ucsusa.org/documents/FuelEconomyJobs.pdf.
9 ExxonMobil corporate advertisement, Energy and Environment, http://www2.exxonmobil.com/corporate/files/corporate/campaign05/energyandenvironment.pdf.
10 Greenpeace, “Exxon Money 2004 Key Facts,” fact sheet, accessed June 30, 2005 at http://usaphoto.greenpeace.org/exxonmobil-secrets/exxon%20money%202004%20key%20facts.doc.
source: http://www.exxposeexxon.com/facts/ExxonMobilGreenTechnology.pdf 30jan2006
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