$100 Billion. That’s what the big 5 oil companies have made in profits since January 1. $102.85 billion to be more precise, according to my own calculations (see table below).
That means that they’re on course to top $140 billion for 2011. More if oil prices keep rising. And that’s in a year when unemployment has soared and unrest has spread to all corners of the world driven by economic and social inequity.
Yet as these mega profits are extracted from us in the course of our daily lives, the U.S. government continues to grant subsidies, tax relief and royalty relief to the U.S. oil industry.
The industry tells us that if we take their subsidies away then they won’t be able to afford to drill as much as they do and oil prices will go up even more. I don’t know about you but I’m feeling just a little bamboozled by that one. If there’s any sector out there right now more able to pay a little more in tax I’d like to know about it.
But are we going to see oil and gas subsidies cut in the trillion dollar budget cutting plan being hammered out by the super committee? Given how much campaign money the committee gets from the sector it’s not looking good.
Indeed as Matt Price so eloquently describes in today’s Tyee, the industry continues to defend its subsidized existence without irony in a manner reminiscent of a certain genre of B movie. Yes, the zombie cry of “Oiiiiiil” can be heard from Alberta to Texas and Ottawa to Washington as the North American oil industry digs in against the nascent clean tech era.
As Matt describes, “the ideology of oil is that because oil exists, it must be got, and it must be burned. Any critics must be deranged, damaged, discounted, discredited, and dismissed. Nothing must be allowed to stand in the way of “Oiiiiiil…”
Over at Transition Voice, where the vision of a world free of oil zombie domination is daily discussed, Erik Curren writes that Big Oil has so far gotten off lightly in the Occupy movements spreading round the globe. Perhaps surprising in the face of such lavish profits. Not that the Occupy protesters have ignored them completely but that the focus on banks has dominated for obvious reasons. Erik argues that Big Oil’s role in the corporate fleecing of the 99% is easily as pernicious as Wall Street’s.
Erik lays out 5 key ways to Occupy Big Oil. Perhaps with the implementation of these 5 principles the world may one day be safe from the zombies that threaten to change the face of the planet.
- Get oil money out of politics
- Cut direct subsidies to oil companies
- Cut indirect subsidies for oil through ARSE (auto/road/sprawl) Complex.
- Remove barriers to renewable energy
- Conserve and localize.
It’s still not too late to vanquish the zombie curse. Trick or treat anyone?
|
Big 5 Oil Companies 2011 Profits in $Billions |
Q1 | Q2 | Q3 | Total |
| BP | 5.48 | 5.30 | 5.14 | 15.93 |
| ConocoPhillips | 3.02 | 3.40 | 2.63 | 9.06 |
| Chevron | 6.22 | 7.73 | 7.82 | 21.78 |
| ExxonMobil | 10.65 | 10.68 | 10.33 | 31.66 |
| Shell | 8.78 | 8.66 | 6.97 | 24.41 |
| Big 5 | 34.16 | 35.78 | 32.90 | 102.85 |
Source: Quarterly results announcements from company websites.
The CEO of Nabors Industries, just retired with a payout of $100 million. The oil profits must be going somewhere.
You have the facts correct about oil company profits, which are huge because they are huge enterprises. Good to consider profit margins — less than 10% on average, compared to massive profit margins in other businesses like Apple and Google. Oil is a mature, very competitive business. It’s easy to lose money at it, for instance Marathon and Anadarko this quarter.
I agree that depreciation allowances seem weird, but they also exist in law for mining (iron ore, coal, etc). Changing the tax code is fine with me, but it will hurt thousands of small U.S. oil companies and make refined products (gasoline, diesel) more expensive.
I understand perfectly well that folks would like to use less oil. Unfortunately liquid fuel is the most efficient source of power for aircraft, farm equipment, transport, and heavy equipment. Economic growth is propelled by liquid fuel. Cutting oil consumption is cutting your own throats.