Bertram's Sharebook 

Native landscaping practices can help improve air quality on a local regional and global level. Locally, smog (ground level ozone) and air toxics can be drastically reduced by the virtual elimination of the need for lawn maintenance equipment (lawn mowers, weed edgers, leaf blowers, etc.) which is fueled by gasoline, electricity or batteries. All of these fuel types are associated with the emissions of the following air pollutants: carbon monoxide (CO), carbon dioxide (CO₂), nitrous oxides (NO_x), sulfur dioxide (SO₂), VOCs (volatile organic compounds) and air toxics such as benzene. Gasoline lawn and garden equipment, on average, produces 5% of ozone-forming VOCs in areas with smog problems. This equipment also emits toxics and particulates.

Regionally, the NO_x and SO₂ released from lawn maintenance equipment react with water in the atmosphere to form acid rain.

Exercising outdoors? It's that time of year again! Check your local air quality forecast to help plan the best time for a workout or run. Knowing your local air quality can help avoid aggravating respiratory problems.

The next time you're gritting your teeth as you fill your tank with $4 gas, here's something to consider: Your pain is their gain.

The last of the Big Five oil companies announced first-quarter earnings Friday, so the totals are in. Between the five of them, ExxonMobil, BP, Shell, Chevron, and ConocoPhillips made $34 billion in profits in the first three months of 2011 -- up 42 percent from a year ago.

That's about $110 for every man, woman, and child in the United States -- in just three months.

Exxon alone cleared a cool $10.7 billion profit from January through March, up 69 percent from 2010. That's $82,175 a minute.

Why the staggering increase in earnings? Precisely because you're paying $4 a gallon for gas.

Gas prices shoot up when oil prices shoot up, and when oil prices shoot up for reasons that have nothing to do with how much it costs to bring it out of the ground, it's a windfall for the folks who produce it.

The average cost to produce a barrel of oil, including exploration, development, extraction and taxes, is about $30, according to a U.S. Energy Information Administration survey. The going rate to buy one is about $113.

Why is the price so high? Part of it is increased demand and geopolitical worries. But no less an authority on the matter than Goldman Sachs acknowledged earlier this month that speculation is at least partially responsible, driving oil prices up faster and higher than supply and demand could possibly explain.

That means the people who are betting on oil prices are actually making the price of oil go up.

And while the pain is widely felt -- consider all the Wal-Mart shoppers who are agonizing over how to make it to the end of the month -- the benefits are not being widely shared.

The industry's powerful Washington mouthpiece, the American Petroleum Institute, argues that the staggering earnings simply reflect oil and gas companies' tremendous contributions to the economy, and that their stock prices are shoring up the nation's pension funds.

Adam Sieminski, chief energy economist for Deutsche Bank, thinks the numbers get too much attention. “The overall profit numbers look really big because they're really big companies that move a lot of product around,” he says. “To say that they're enormous profits only works if you're talking about the total number. They're not enormous profits if you compare them across other companies and other industries.”

Siemenski even accentuates the positive. “Yes, when gas goes up, everybody squeaks, because it's uncomfortable,” he says. But high oil prices mean, among other things, that “it becomes more attractive to do alternative energy… The worst thing that ever happened to wind and solar power companies was when oil prices collapsed in 2008 and early 2009,” he says. Furthermore, when gas gets pricey, &ldquoeople who made a decision to get a Prius instead of a Hummer get a payback, and from a societal standpoint, that's probably good.”

And yet, the fact of the matter is that every visit to the gas pump reflects a transfer of money from the many to the few -- and in most cases, from the not-so-rich to the super-rich.

By and large, the oil companies' profits are not finding their way back into the communities from which they came; are not being used to create more jobs; and are not being invested in new equipment and exploration.

Some of that money is going back out the door in the form of larger dividends to stockholders. But in the case of two of the big five in particular -- Exxon and ConocoPhillips -- more than half of their total profits are being used to buy back their own stock.

Fully $5.7 billion of Exxon's haul went to buy back its own stock -- and the company announced that it expects to buy back yet another $5 billion's worth in the second quarter of the year. Conoco earned $3 billion in the first three months of 2011 -- and spent $1.6 billion of that to buy back 21 million of its own shares.

Buying back stock is not an uncommon tactic among publicly held companies, particularly when they experience a sudden and possibly temporary uptick in revenue. Buybacks are almost guaranteed to send stock prices up, by boosting earnings per outstanding share, increasing the demand for the stock and sending a signal that the company thinks its stock is undervalued.

But from the viewpoint of a company's CEO, other top brass and its board of directors, stock buybacks have all sorts of particular advantages, as well.

Top executives, after all, often get significant stock options. If stock prices don't go up, such options are worthless. By contrast, the higher the stock price goes, the more valuable the option. (Exxon's stock is up 32 percent from six months ago.)

Companies that buy back their stock can either retire it or simply keep it themselves, under the control of the board of directors, to reissue later or award as bonuses.

Dividends, by contrast, are not nearly as good a deal for company executives. For one thing, they are taxed as income. An increase in the stock price is not taxed as income; it's not taxed at all until the stock is sold -- and only then at the capital gains tax rate, which is limited to 15 percent. (Fifteen percent would be a lot for the median American family, which pays less than 5 percent of its income in federal taxes. But it's a huge break to those paying income tax at the highest marginal rate of 35 percent.)

“Buying back shares benefits existing shareholders, no one else. And more than anyone else, it benefits existing management,” says Henry Banta, an energy industry analyst and partner in the Washington D.C. law firm of Lobel, Novins & Lamont.

“They're basically enriching themselves,” says Daniel J. Weiss, a senior fellow at the Center for American Progress. “With this windfall, they enrich the board of directors, senior managers, and shareholders.”

And in 2007, when Exxon was using $30 billion a year from the previous oil-price bubble to buy back its shares, Bloomberg columnist David Pauly wrote: “In most cases, stock buybacks are suspect…. Managements should ignore investors' call to repurchase their shares and invest money in ways that will increase profit, not just earnings per share.”

As for the dividends paid by Exxon and the other oil giants, there may be a lot of shareholders, total -- including a lot of pension funds and mutual funds -- but the vast majority of shares are held by a very small elite.

Edward N. Wolff, an economics professor at New York University, studies wealth distribution. His latest study includes data through 2007. When it comes to total equity in stocks, Wolff says, “it's still very concentrated in the hands of the rich.”

“Less than half of households owned stock as of 2007,” he says. “Probably less now” because of the financial crisis, he suspects: “Probably more like 45 percent, maybe less.” That includes 401ks, mutual funds and the like.

“Even that really overstates things because a lot of the people who do own stock own very small amounts,” Wolff says. As of 2007, the percentage of households that owned $5,000 or more of stock was 35 percent; only 22 percent owned $25,000 or more.

Who's got the rest? The wealthiest 1 percent of households has 38 percent, Wolff found; the wealthiest 5 percent has 69 percent; the wealthiest 10 percent has 81 percent.

The bottom 60 percent of households owns 2.5 percent of the total stock. Not so very much.

There's another thing the big oil companies are doing with their profits: they're hoarding them. If precedent holds, as soon as oil prices started shooting up again, a lot of that money started going into the bank for safekeeping -- and adding yet more to the $1 trillion or so in corporate cash lying fallow and slowing the recovery.

And as it happens, a not insubstantial chunk of last quarter's profits were a direct gift -- from the taxpayers. Somewhere between $4 billion and $9 billion of the industry's annual profits comes from federal subsidies.

President Barack Obama has proposed repealing $4 billion a year in subsidies; the American Petroleum Institute says the proposal would actually cost the industry about $90 billion over the next decade.

Response to Obama's proposal was lackluster at first, from both sides of the aisle.

But Democrats, afraid of being thrown out of the White House by an angry, gas-impoverished voting public, are suddenly seeing the fight to repeal those subsidies as a winning political issue.

Although the repeal would neither increase nor decrease the price of gas, it would take a bite out of Big Oil. And pushing for the repeal will almost inevitably highlight the modern Republican Party's nearly lockstep allegiance to the thriving oil and gas interests -- something that, in a period of high gas prices and even higher profits, couldn't be good for them.

But yet another thing the industry does with all its cash is buy influence in Washington. (See my April 6 report, How the Oil Lobby Greases Washington's Wheels.)

For instance, Exxon, during the same quarter it made nearly $11 billion, spent just a tiny fraction of that on lobbying. But that was still a whopping $3 million.

Today's environmental tip: Be green from the ground up! Test your home for radon. Radon is a naturally occuring, odorless gas that can seep out of the ground into your home. But as the second leading cause of lung cancer, radon is responsible for over 20,000 deaths a year. Fortunately, a home radon test is easy to do, and homes with high radon levels can be fixed.

Today's environmental tip: Get the lead out!  If you're doing work on an older home or school building, be sure to follow lead-safe work practices. Contain the work area and keep kids and pets away. Minimize dust. And clean up thoroughly.  Lead is harmful to adults and children, and common renovation jobs like sanding, cutting, or demolition can create lead dust and chips

Today's environmental tip: Everyone can make a difference! High school students can study links between everyday actions at their high school, greenhouse gas emissions, and climate change. Become a "climate ambassador" leader in your school or neighborhood and motivate friends, schools, and community leaders. Talk to you friends - help spread the word!T

Today's environmental tip: Wait for the storm to pass! Don't fertilize before a rain storm. Your fertilizer - along with your money - can just wash off your lawn and down the storm drain. Fertilizer runoff can pollute rivers, lakes, and bays, and cause problems in recreational areas or fishing grounds. Check the weather forecast before you head out, and wait for the storm to pass.

Transportation consumes about 25 percent of the total energy used in the United States. Driving releases harmful chemicals and other air pollutants into the air. When, where, how, why and what you drive all play an important role in affecting air pollution. Here are some suggestions on how to be more environmentally friendly when you need to get somewhere.

• Drive less, especially during peak traffic periods or hot days.
• Use public transportation, walk, or ride a bike.
• Shop by phone, mail or Internet.
• Telecommute. Even one day a week will make a big difference.
• Combine your errands into one trip.
• Carpool. Sharing rides reduces emissions.
• Avoid revving or idling engine over 30 seconds.
• Avoid waiting in long drive-thru lines, for example, at fast-food restaurants or banks. Park your car and go in.
• Accelerate gradually, maintain speed limit and use cruise control on the highway.
• Follow your owner's manual on recommendations for maximum economic efficiency.
• Use an energy-conserving (E.C.) grade of motor oil.
• Minimize use of air conditioning if you can.
• Get regular engine tune ups and car maintenance checks (especially for the spark plugs).
• Use EPA-certified facilities for air conditioner repair.
• Find out if materials are recycled when you change your tires, "throw away" your car or change car fluids. Ask before your car is serviced and consider going to someone who is environmentally friendly.
• Replace your car's air filter and oil regularly. 
• Keep your tires properly inflated and aligned.
• Repair all vehicle leaks promptly.
• Fill gas tank during cooler evening hours to cut down on evaporation. Avoid spilling gas and don't "top off" the tank. Replace gas tank cap tightly.
• Look for the most efficient, lowest-polluting model of vehicle. 
• Don't ignore the "check engine" or "service engine soon" light if it comes on. Make an appointment with your repair technician for diagnosis soon. 

Today's environmental tip: During hot weather, don't top off your gas tank. Refuel your car or truck in the early morning or the evening when it's cooler. A small fuel spill may not seem like much, but every spill evaporates and adds to air pollution, and fuel pumps with vapor recovery systems can feed a spill back into their tanks - after you paid for it. So, in hot weather - don't top off!

Today's environmental tip: Don't trash it - reuse it! Be creative as you look for new ways to reduce the amount or kinds of household waste. Give cardboard tubes to pet hamsters or gerbils. Plant seeds in an egg carton. Make a flower pot out of a plastic ice cream tub. By thinking creatively, you will often find new uses for common items and new ways to recycle and reduce waste.