Idea of the Day: Big Oil Doesn’t Need Special Tax Breaks
It’s been quite a week for Big Oil. The big five oil companies—BP, Chevron, ConocoPhillips, ExxonMobil, and Shell—reported their second-quarter 2013 profits this week, which were a combined $19.5 billion. That comes out to $145,000 in profit per minute—more than 88 percent of American households earn in an entire year. Despite these large amounts, however, the profits are still lower than analysts’ expectations and less than the second-quarter 2012 profits. This is partly due to lower gasoline prices in the second quarter of 2013 compared to the second quarter of 2012, as tabulated by the Energy Information Administration. Nonetheless, the $47.4 billion in 2013 profits so far is reason enough to end special tax breaks.
Each of the big five oil companies provided a different reason for why its profits were lower in the second quarter of 2013 compared to this quarter last year:
- BP’s profits were lower than expected due to rising claims from its Deepwater Horizon disaster in 2010.
- Chevron’s second-quarter profits were down due to lower oil production, lower prices, and refinery outage.
- ConocoPhillips had lower profits due to “a cost increase in domestic crude processing.”
- ExxonMobil’s profits were lower due to reduced volumes at its refineries.
- Shell’s second-quarter profit was lower than expected, partly due to reduced oil production in Nigeria and expensive tight oil production in North America.
For more on this topic, please see:
- Big Oil Rakes in Huge Profits, Again by Daniel J. Weiss and Jackie Weidman
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