Another Huge Year
Exxon Mobil likes breaking records. In 2007, it posted the biggest annual profit number reported by any American company ever — $40.6 billion, more than $1,200 per second.1 Last July, the company announced it had reached another milestone. In the second quarter of 2008, Exxon brought in $11.7 billion, the largest quarterly profit figure ever reported by any U.S. company.2 But Exxon didn’t stop there. Even amidst a collapsing crude market in the third and fourth quarters of 2008, Exxon shattered its 2007 record by 11% with $45.2 billion in 2008 annual profits.3
Last year, despite the recession-fueled drop in oil prices, all of the four largest oil companies saw annual profits increase yet again. In addition to Exxon, Shell, BP and Chevron all beat their 2007 annual earnings by 0.3%, 21%, and 28% respectively.4
Although the last quarter has shown profits may not continue on their record setting trajectory, both crude and pump prices have been steadily creeping upwards since January. According to the Energy Information Administration’s April 2009 outlook, “Despite the recent economic downturn, growing demand for energy—particularly in China, India, and other developing countries—and efforts by many countries to limit access to oil resources in their territories that are relatively easy to develop are expected to lead to rising real oil prices over the long term.”5
Time to End the Flow of Subsidies
| Top Oil and Gas Company Profits 2005-2008 | ||||
| Company | 2005 | 2006 | 2007 | 2008 |
| Exxon | 36.1 | 39.5 | 40.6 | 45.2 |
| Shell | 25.3 | 25.4 | 31.3 | 31.4 |
| BP | 22.4 | 22.3 | 21.2 | 25.6 |
| Chevron | 14.1 | 17.1 | 18.7 | 23.9 |
| Total | 97.9 | 104.3 | 111.8 | 126.1 |
Since 1950, more than $169 billion worth of taxpayer-funded subsidies and loopholes have lined the pockets of oil and gas corporations.6 These preferences have only furthered the high returns enjoyed by the industry. According to the Office of Management and Budget: “Domestic oil and gas production subsidies generally do not significantly reduce the prices that consumers pay for products such as gasoline or home heating oil, resulting primarily in higher returns to the industry.”7 Now, more than ever, it’s clear these companies do not need taxpayer handouts.
1 J. Mouawad, “Exxon Mobil profit sets record again,” The New York Times, http://www.nytimes.com/2008/02/01/business/01cnd-exxon.html, February 2008.
2 CNNMoney.com, “Exxon posts record $11.68 billion profit,” http://money.cnn.com/2008/07/31/news/companies/exxon_profits/index.htm?cnn=yes, 2008.
3 S. Hargreaves, “Exxon 2008 Profit: A Record $45 Billion,” CNNMoney.com, http://money.cnn.com/2009/01/30/news/companies/exxon_earnings/index.htm, January 2009.
4 T. Macalister and G. Wearden, “Shell Makes First Quarterly Loss in a Decade,” Guardian.co.uk, http://www.guardian.co.uk/business/2009/jan/29/shell-profits-oil, January 2009;
CNN.com, “BP Profits rise by 39%,” http://edition.cnn.com/2009/BUSINESS/02/03/bp.profit.rise/, February 2009;
D. Baker, “Chevron’s Annual Profits Soar to Record,” San Francisco Chronicle, http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/01/31/BUS215KHIN.DTL, January 2009.
5 Energy Information Administration, “Annual Energy Outlook 2009 with Projections to 2030,” http://www.eia.doe.gov/oiaf/aeo/execsummary.html, April 2009.
6 In constant 2007 dollars.
7 Office of Management and Budget, “Terminations, Reductions and Savings: Budget of the U.S. Government, Fiscal Year 2010,” http://www.whitehouse.gov/omb/budget/fy2010/assets/trs.pdf, February 26, 2009.
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