May 2, 2006- Record Oil Company Profits

HON. MARCY KAPTUR
 OF OHIO
IN THE HOUSE OF REPRESENTATIVES
TUESDAY, MAY 2, 2006

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Ms. KAPTUR. Mr. Speaker, I hope the American peopleare paying attention to the massive oil company profits being made off of thepocketbooks of our people. Gasoline prices have gone up 68 cents just sincelast year per gallon. Gasoline prices are soaring. I left Ohio this morning after casting my vote inthe primary election. Gas was $3 at the pump, and some of the brands were ashigh as $3.85 a gallon.

Who are we making rich? ExxonMobil, they are number one. They declared arecord quarterly profit of $8.4 billion, 7 percent more than they made lastyear. Meanwhile, their chairman, Lee Raymond, is planning on his retirement.His package totals $400 million when all pension payoffs and stock options areincluded.

I have often asked myself, what does somebody do with $400 million? When isenough enough?

Now, this is the same Exxon that has yet to pay the $4.5 billion in punitivedamages awarded in the Exxon Valdez case 17 years ago. They haven't even paidoff those they harmed.

Now, not to be outdone, ConocoPhillips said its earnings rose 13 percent, to$3.29 billion, just in the first quarter of this year.

Now, Chevron Corporation's first quarter profits soared 49 percent, to $4billion, as the firm joined the procession of U.S. oil companies reportingcolossal earnings.

Meanwhile, constituent after constituent in my district tells me they can nolonger afford weekend family trips due to gas prices. People are only fillingtheir tanks up halfway, hoping prices will drop and they will not have to paythese exorbitant prices.

Other companies like Halliburton, think about this. We have a VicePresident. He got a tax refund of nearly $22 million. Halliburton is an oilservicing firm that has gotten so many no-bid contracts from this governmentrelated to the war in Iraqand other oil-related expenditures. Come on. Can't we connect those dots? Can'twe figure out what's going on here?

Farmers tell me that higher fuel costs mean their already ultra-slim marginof profit is likely to disappear.

Small businesses worry about whether or not they can impose deliverysurcharges to make up for higher fuel costs.

Now, all the President of the United States says, listencarefully. He says we have to study this. Hmm. He says we have to study this.We have to study the profits.

Mr. President, we need to do something. The President says that thesecompanies should reinvest their money in energy projects here. But keep in mindthat Exxon officials told the staff of the House Energy and Commerce Committeethis year that Exxon doesn't intend to spend any money in this country becauseof flat demand for petroleum products by the year 2030. So the Presidentappears to be some days late and a refinery short.

Something the President could do, using his Presidential authority, is tochange the Strategic Petroleum Reserve to a Strategic Fuels Reserve and beginconverting this country to non-oil-based fuels. His agriculture bill didn't dothat. We put a title IX in the agriculture bill to convert quickly. We can doethanol and biodiesel right now. But guess who won't sell it? Every one ofthose oil companies.

Think about the communities you live in. Let's say you buy a Ford Taurusthat is an E85, and you can put ethanol in the tank. Unless you are from Minnesota or Iowa,where are you going to buy the fuel? Guess who locks you out at the pump? Everysingle one of those companies, because they want business as usual.

At some point, we have to do what is right for the country before any singlecompany's interests. This is in the national interest not to have the economytake a nosedive again because of our dependence on imported petroleum.

The other body is contemplating the cute idea of a $100 tax rebate to everycitizen. Well, what does that do about the price of gasoline? What does that doabout converting the type of fuel you put in your tank and making America energyindependent again? What does this do to end our presidentially decreedaddiction to oil from unstable regimes? All it does is it transfers wealth tothose very same companies that are locking out the new future for America, thenew energy future we needed to embark upon in the last century and, sadly, wedid not have the leadership to do it.

   So profits are up again. Golden parachutes are beingreadied. The industry snubs its nose at the consuming public that can't affordthese prices. The Bush government says, trust us, let's just study some more.That is all we need to do is study.

   Is it any reason the American people are upset? They havea right to be upset. We need leadership in this government. No morefollowership.

[From The Blade: Toledo, Ohio,Friday, Apr. 28, 2006.]

Quarterly Profit Tops $8 Billion at Exxon Mobil

ASSOCIATED PRESS

Dallas--ExxonMobil Corp. posted the fifth-highest quarterly profit for any public company inhistory yesterday, and with oil prices above $70 a barrel it could go down asthe company's weakest quarter for the year.

Exxon Mobil's first quarter was lower than its record fourth-quarter, whenthe world's largest oil company reported the highest profits ever for anypublicly traded company. And the earnings, which rose 7 percent to more than $8billion, still fell short of analysts' estimates.

But, in what is sure to spur the growing furor over outsized energy industryearnings, Exxon Mobil's massive profits may only increase in 2006 as itbenefits from rising crude-oil prices and production, analysts say.

``This is only the beginning,'' said Fadel Gheit, analyst for Oppenheimer& Co. ``Let me tell you, it gets better after that. Oil prices will addhuge amounts to earnings, at least a billion dollars.''

The earnings report comes amid consumer outcry in the United States aboutsoaring gasoline prices, which average $2.91 a gallon nationwide, or 68 centshigher than a year ago.

It also lands as Washingtonlawmakers are looking to appease voters with various proposals to make big oilcompanies pay more taxes or provide consumers with some other relief. Buteveryone acknowledges that little can be done in the short term to bring downprices.

``If we had a silver bullet, we, would be proposing it to Washington, rightnow,'' said Ken Cohen, the company's vice president of public affairs. He saidExxon Mobil was investing a growing portion of its profits in new oil and gasproduction, and that the company is sympathetic to the added energy-price burdenon consumers.

Still, he said consumers and members of Congress need to ``take a deep pauseand a deep breath'' because market forces will eventually bring supply anddemand back into balance. He said Congress could help matters longer termby removing barriers to domestic drilling.

The increasing public scrutiny of Exxon arrives less than a month after thenews that the company handed its former chairman and chief executive officer,Lee Raymond, a $400 million retirement package, when all pension payoffs andstock options are included, that sparked headlines across the country and callsin Washington to justify the huge compensation.

In January, Exxon posted the highest quarterly profits of any public companyin history: $10.71 billion for the fourth quarter of 2005 and $36.13 billionfor the full year.

Howard Silverblatt; a senior index analyst for Standard & Poor's, saidthe latest profit figure still places Exxon fifth historically among quarterlyearnings. Exxon also holds the first, second, and fourth spots; Royal DutchShell PLC has the third spot.

In the first quarter, net income rose to $8.4 billion, or $1.37 per share,from $7.86 billion, or $1.22 per share, a year ago. Roughly three-quarters ofthat profit came from the company's upstream division, which produces oil andnatural gas.

Analysts polled by Thomson Financial were looking for a higher profit of$1.47 per share for the latest quarter.

Analysts and company executives identified two major contributors to comingup a dime short: higher taxes on oil and gas produced abroad and reduced incomefrom Exxon's refining business, which spent heavily on maintenance in theaftermath of last year's hurricanes.