STATEMENT: Money Guzzlers – Big Oil Prepares to Announce Profits
By Daniel J. Weiss, Anne Wingate
WASHINGTON, D.C. – This week the big five oil companies will release their second quarter 2007 profit figures. Since 2001, ExxonMobil, Shell, BP, Chevron, and Conoco Phillips have seen swelling profits despite burgeoning concern about America’s growing oil dependency. Public officials and ordinary citizens recognized that while the big five profited from our oil consumption, so too did nations hostile to us. And burning oil exacerbates global warming. President Bush finally acknowledged these concerns when he noted in 2006 that “America is addicted to oil.” His comments and growing public concern, boosted interest in the development of clean alternative fuels and energy sources.
With billions of dollars in profits, the big five had an unprecedented opportunity to lead clean energy development and benefit national security and the environment. Many of these firms began to advertise and publicly commit to such investments. Though the companies’ rhetoric made claims about clean energy, their investments have not followed suit. Instead, they spent 38 percent of their profits on stock buy backs and together they spent a paltry 0.5 percent of their profits on investments in clean alternative energy.
Despite their public claims about clean energy, an analysis by the Center for American Progress found that the big five oil companies have very different priorities for spending their vast profits. These priorities include:
· ExxonMobil’s investment in studies that attempt to debunk hundreds of peer reviewed scientific reports that demonstrate the threats posed by global warming;
· Shell’s production of oil from tar sands, which produces two and half times more global warming pollution than ordinary oil production;
· Chevron and Conoco Phillips’s efforts to block their service stations from selling E-85 (85% ethanol, 15% gasoline) to flexible fuel vehicle owners, which would reduce oil use and global warming emissions; and,
· BP’s lack of investment in maintenance led to pipeline spills.
While the big five oil companies continue to make miserly investments in clean alternative energy, Congress took the lead to spur investments in new fuels. In January, the House of Representatives passed the Clean Energy Act of 2007, H.R. 6, which would invest $14 billion in tax incentives for biofuels research and deployment, and production of wind and solar power. In June, the Senate attempted to pass an ambitious $24 billion bipartisan tax incentives bill. In addition to the clean energy provisions in H.R. 6, the Senate bill would have provided tax incentives for more energy efficiency, and to develop carbon capture and storage technology to reduce global warming pollution from power plants. Both of these bills would pay for these tax incentives via closure of recently enacted oil company tax loopholes and recovery of unpaid royalties.
The big five oil companies and their trade association the American Petroleum Institute (API), vigorously opposed these tax packages. The Senators that voted to block this bill received more than two times the campaign contributions from oil and gas interests compared to those Senators who voted for the clean energy tax package.
In addition to their opposition to the clean energy incentives tax package, the big oil companies forcefully oppose provisions in the upcoming House energy bill that would close special provisions to benefit them created by the Energy Policy Act of 2005. The House bill would:
· repeal the lax arbitrary deadlines for drilling permit approvals;
· enhance the employment of best management practices when oil companies develop oil and gas on federal lands; and,
· restore environmental reviews for numerous oil and gas activities on public lands.
Representatives of API and the big five oil companies are roaming the halls of Congress to convince enough representatives to sink these essential environmental protections.
Energy independence and global warming reduction are atop Americans’ domestic agenda. A recent poll found that 29 percent cite it as the most important domestic priority, with only health care topping it as a concern. In a Democracy Corps survey last month, voters reacted more positively to a proposal to increase development of clean alternative energy technologies than to any other initiative—more so than expansion of health insurance, investments in stem cell research, or even stronger port security.
Despite Americans’ strong desire for energy independence and global warming reduction, the big five oil companies remain opposed to this agenda. They continue to invest their profits for self enrichment, while paying little more than lip service to investments in alternative energy. As the second quarter profit figures become public this week there will be deafening cheers in the boardrooms of BP, Chevron, Conoco Phillips, ExxonMobil and Shell. Meanwhile, American families will continue to long for a clean energy future with reduced fuel costs and pollution. Congress is on the path to fill the void by answering this call for a clean energy future.
See the full statement here.