Center for American Progress

Record Oil Prices: Americans Pay, Big Oil Collects

Record Oil Prices: Americans Pay, Big Oil Collects

Record prices for crude will soon appear, yet Big Oil gets tax breaks that the Bush administration denies to clean energy, writes Dan Weiss.

Record-breaking oil prices will soon deliver another blow to American workers and families, and another windfall to Big Oil.

The price of oil per barrel cleared the $100 mark yesterday, with expectations that prices could soon rise to the all-time high of $104 per barrel soon, which after adjusting for inflation would be the highest price of oil ever in world markets. Since 2001, Americans have spent an estimated $1.3 trillion dollars on imported oil. At $104 per barrel, Americans would spend over $1.2 billion a day on foreign oil. In addition to enriching Venezuela and other unfriendly nations, it also means record profits once again for Big Oil.

ExxonMobil Corp., for example, made $77,000 per minute in profits in 2007—more than the annual income of two-thirds of American families—when crude oil prices averaged $72 per barrel last year. This year, even more of Americans’ hard earned dollars will soon flow into the pockets of ExxonMobil and the other major oil companies—Conoco Phillips, BP plc, Chevron Corp., and Royal Dutch Shell Group—while President Bush does nothing to stop it. Since he took office in 2001, oil prices have nearly tripled and gasoline prices nearly doubled.

Over this same period of time, the big five oil companies have earned record high profits—more than half a trillion dollars. And adding insult to injury, President Bush opposes a clean energy tax package that diverts $1 billion annually from several Big Oil-orchestrated tax loopholes and toward incentives for clean, renewable energy from the wind, sun, earth, and biofuels.

Congress must override President Bush’s compassion for oil companies by enacting a clean energy tax package, H.R. 5351, to boost renewable energy and our nation’s transformation to a low-carbon economy. This critical legislation will set our country on the road to real energy diversification—the best way over the long haul to drive down high oil prices, reduce our dependence on oil, combat global warming and retool our economy for the 21st century.

Daniel J. Weiss is a Senior Fellow and Director of Energy Strategy at the Center for American Progress. To speak with him please contact:

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Daniel J. Weiss

Senior Fellow