Washington, DC – The Center for American Progress released a new report today analyzing 2008 oil company profits and lack of investment in renewable energy, even while the companies spend millions of dollars on ad campaigns touting their emphasis on renewable energy.
Despite their $656 billion in combined profits from 2001-2008, big oil companies are running ads and lobbying Congress to oppose ending tax breaks worth $30 billion over ten years.
It should come as no surprise that last year’s record high oil prices also led to near record profits for big oil companies. The big five oil companies—BP, Chevron, Conoco Phillips, ExxonMobil, and Shell—made record profits during the first three quarters of 2008 due to record oil prices. When oil prices collapsed along with the world’s economies, the oil companies’ profits were reduced, too. However, the big five companies still made a combined profit of $100 billion for 2008.
Despite their soaring earnings, the big five companies were very stingy with investments in renewable and low-carbon energy technologies and fuels that would reduce oil dependence. Media tracking group TNS Media Intelligence reported that $52.5 million was spent in the first quarter of 2008 along by the oil industry on greenwashing advertisements that boast about investments in wind and solar power or efficiency. In fact, a CAP analysis of their investments reveals that the big five oil companies invested just an average of 4 percent of their total 2008 profits in renewable and alternative energy ventures. This reality contrasts with their ads that promote greener, cleaner images. .
Beyond the smokescreen PR campaign, the oil companies have benefitted from millions of dollars in tax loopholes.
The good news is that President Barack Obama’s proposed budget would further reduce taxpayer support for oil companies awash in profits. It would eliminate another $31.5 billion over a decade by repealing tax breaks and recovering lost royalties. The new measures include “closing loopholes, charging appropriate fees, and reforming how royalties are set.” On March 26, both houses of Congress approved President Obama’s proposed cuts to Big Oil subsidies in the budget resolution. The House budget committee voted for the budget proposal by 24 to 15, while the Senate voted by a margin of 13-10 in favor.
With a growing federal budget deficit, taxpayers should not have to subsidize companies that made two-thirds of a trillion dollars over the past eight years. The oil industry has already begun forcefully lobbying to preserve the handouts. The American Petroleum Institute is running radio ads that attack the budget proposal. The ads claim that lifting oil subsidies "could actually reduce local, state, and federal revenue." In fact, a state-by-state analysis indicates that taxpayers would actually save money if the hefty subsidies and tax breaks for oil and gas companies were lifted.
The bottom line is that big oil companies profited mightily over the last year eight years. Their $656 billion in profits enriched their executives and shareholders, while they invested precious little in the research of clean-energy technologies and fuels that are essential for our economy, security, and environment. Oil companies may be spending millions trying to convince people that they are committed to being part of a clean energy future, but their miserly clean-energy investments say otherwise.
READ THE FULL REPORT