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Five Questions For The Five Biggest Oil Companies

Five Questions For The Five Biggest Oil Companies

 

Written by Daniel J. Weiss and Jackie Weidman

Beginning on Monday April 23, and continuing through May 1, the five biggest oil companies – BP, Chevron, ConocoPhillips, ExxonMobil, and Shell – will release their first quarter profits for 2011.

Given record gasoline prices for this time of year, these profit figures are likely to be quite large.  How much money did they make from January through March, and how are they spending it?

In 2011, the Big Five made a combined record of $137 billion in profits.  These companies made $32 billion in the first quarter of last year alone, a 38 percent increase over the first quarter of 2010. High gasoline prices yield large profits: A CAP analysis found that every one cent in gasoline prices produces $200 million more in profits (on a quarterly basis).

In general, the oil industry spends 50 times more on oil exploration than on alternative energy investments. So how are the largest five oil companies spending their enormous profits? Five easy questions could give us some big answers:

1. How much are the big five reinvesting in themselves?

In the first quarter of 2011, the big five companies spent $8 billion on stock buybacks. ExxonMobil and ConocoPhillips spent 53 percent of their profits on these purchases, which enriches their boards, senior executives, and largest shareholders.

2. How big are the cash reserves of the big five companies?

At the end of 2011 these companies had a combined $58 billion in cash reserves, nearly 30 times more than they received in special tax breaks that they are furiously lobbying to retain.

3. How much do these companies spend on pressuring Congress?

In 2011, the big five companies spent $66 million on lobbying. ConocoPhillips spent over $20 million, followed by Shell’s nearly $15 million. ExxonMobil spent $13 million, Chevron spent $9.5 million and BP spent $8.4 million.

The American Petroleum Institute, the lobbying arm of the oil industry, spent $8.6 million on lobbying. API has also spent $4.3 million on energy attack ads since January, according to The Washington Post. API uses member companies’ funds to strong arm legislators into maintaining their tax breaks. In 2010, API spent $63 million, a third of its total budget, on ad campaigns. How much money are these five companies giving to API to provide lobbying muscle? How does that compare to their profits?

As Jack Gerard, President and CEO of API said himself: “if we’re concerned about a particular member [of Congress] we will educate that constituency.” Gerard is paid to do Big Oil’s dirty work, convincing Congress to uphold $40 billion in unnecessary tax breaks while chastising clean energy efforts.

4. Did the Big Five companies pay a higher federal effective tax rate in 2011 compared to the average American family?

Fortune magazine ranks ExxonMobil, Chevron and ConocoPhillips as the first-, third-, and 16th-most profitable companies in the United States.

And yet, they don’t pay their fair share in taxes. According to a Reuters analysis, Exxon Mobil paid 13 percent of its U.S. income in taxes after deductions and benefits in 2011, while Chevron paid about 19 percent, and ConocoPhillips paid 18 percent. The Big Five hoard cash overseas in tax havens to cut their tax rates drastically. As Reuters put it, these tax rates “are a far cry from the 35 percent top corporate tax rate.”

To put things into perspective, the average American individual effect tax rate for 2007 was 20.4 percent.

5. How much money do oil companies invest in alternative fuels to reduce reliance on gasoline?

High gasoline prices devastate middle class budgets. The ultimate solution to pump price pain is to pump less. However, there are few easily affordable, accessible paths to promptly reduce gasoline use for many drivers.

The higher fuel economy standards set by the Obama administration has vehicles traveling further on a gallon of gas. “The average fuel economy of all new vehicles sold in the U.S. was 24.1 miles per gallon last month, a record high for the industry,” according to the Detroit Free Press on April 11. Many families, however, cannot afford to buy new cars when gasoline prices spike.

New models powered by electricity, such as the plug-in hybrid Chevrolet Volt and all electric Nissan Leaf, sold twice as many cars in their first year compared to the initial offering of Toyota Prius and Honda Insight hybrids, but only a limited number of families can buy these new models.

Many companies are developing bio and other advanced fuels that do not rely on petroleum as a key ingredient. Despite their ads that feature clean, renewable energy, Big Oil companies continue to heavily invest in more petroleum rather than alternatives – ensuring that we maintain our addiction to fossil fuels.

According to the Natural Resources Defense Council, the oil industry spends less than half a penny on renewable alternatives for every dollar it spends on producing more oil. Globally, the oil industry’s investments in finding and producing more oil amounted to $2.1 trillion, while companies spent just $4 billion on renewable fuels.

This post was originally published by Climate Progress.

 

Related Stories:

A Legacy of Lies: The BP Oil Spill Two Years Later

How Does Clean Transportation Work?

US Senate Votes to Continue Oil Subsidies

 

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59 comments

+ add your own
8:32PM PDT on May 4, 2012

Why do we let these bastards DESECRATE our EARTH and ALL LIFE on it?!

10:40PM PDT on Apr 30, 2012

What are you going to do when the oil runs out and you've destroyed the planet you - YOU - live on?

6:21PM PDT on Apr 26, 2012

I wrote at length about this a few days ago, so I shall give the gist of what I then said: Nationalize them. I could not care less if 90% or so of economic enterprises are in private hands, but the natural resources of a state belong to the nation, to all the people, to society -- the joint ownership thereof is one of the things that constitute a society, along with mutual concern for education, health care, public safety, etc. The natural resources belong to all, and to all should go the benefit of both exploitation and guardianship. The US is exporting natural resources from the mid-West. God above, think of the effect on the deficit if the profits made by these companies were going into the treasury.

5:41AM PDT on Apr 25, 2012

Thanks for the article.

11:47AM PDT on Apr 24, 2012

Think about the money that they spent buying back stock that could have gone to reduce the price of gas not only in the USA but around the world. Again we were lied to by politicians, the media and the oil companies when they said the conflicts in the Middle East was the cause of the rise in gas prices. We knew better but we let them get away with it AGAIN. We need more of us calling these people out for what they are liars. I am not afraid to use the word liar where it fits and it’s about time our media do their job and do the same. Journalism can protect the masses by truth in journalism; apparently NBC, ABC, CBS, and others have forgotten that was and should be their primary mission.

We have been at the mercy of big business too long, with their slick ads with false claims. Tell all businesses that won’t treat you right/fair, give you choices and clear information on where products are made that you will find a business that will; be a particular and diligent consumer.

Tell politicians to write laws that will make it clear corporations/businesses are NOT citizens, remove all lobbying except for individual citizens; this is the people’s government and it’s time we took it back from greedy politicians and businesses. Vote for a Democrat or Independent who’s only interest is the people and understand that they serve at OUR pleasure. And always hold them accountable.

9:03AM PDT on Apr 24, 2012

we've gotten exactly what we voted for. The American people have stood by for decades and now suddenly we're upset? Until we start holding our elected officials accountable big businesses will do exactly what they want to do. Until we demand change in the way things are done in our government things will continue as they are.

8:50AM PDT on Apr 24, 2012

Steve R you moron, you can't blame Obama and the democrats because every good thing they tried to do after Kennedy died was filibustered by 41 Republicans representing 16% of the people voting in lockstep. Kind of tells you that Collins and Snowe don't deserve their moderate reputations.

I'm guessing you're one of those scumbags paid to post utter nonsense on leftist websites by the totally corrupt Thuglicans!

8:45AM PDT on Apr 24, 2012

It's called lobbying because it used to be illegal aand corporate bribers would meet pols in hotel lobbies. It's time to make it illegal again and any corporate money given to a pol should result in a fine 1000 times the amount given and if the pol who gets the money and votes for anything that benefits the briber should be pitched out of office and charged with a felony.

7:48AM PDT on Apr 24, 2012

If there is any good news here it is that of the 50 or so comments I read, only the comments of
Steve R stand out as pathetically ignorant.

10:49PM PDT on Apr 23, 2012

What is the major malfunction with you oil barons that made you so evil and greedy?

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