May 2nd, 2008
06:20 AM GMT
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NEW YORK – Is it possible for a company to make too much money? It is if you are big oil. Thursday, Exxon Mobil said it made a staggering $11 billion in profits in the first three months of this year. It is the second highest U.S. corporate profit on record. (Exxon's 4th quarter holds the top spot!) Although smaller in overall numbers, B.P. and Shell did even better during the first quarter. Consumer advocate groups are outraged. Oilwatchdog.com said the roof-busting profits are coming at the cost of squeezed consumers and the suffering economy. They want U.S. lawmakers to do something.The three Presidential hopefuls all say they have a plan. Democratic contenders Hillary Clinton and Barak Obama have both proposed a "windfall profit" tax on oil companies that would be used, in part, to fund renewable energy research. Clinton also wants to use that money to pay for a suspension of the federal gas tax this summer. A gas holiday, if you will, for consumers. The presumptive Republican candidate, John McCain also supports a gas holiday, though he is not in favor of a windfall tax.

Oh please. Energy is one of the biggest challenges facing our country and this is what they come up with? A gas holiday? Most energy experts say cutting the federal gas tax for three months would do little to actually help consumers and may actually result in worse roads. The federal gas tax goes toward highway construction and repairs. A windfall tax on oil companies doesn't sound much better. The U.S. Congress can't agree on anything, what makes anyone think they will be able to effectively use any new tax money to find new renewable sources of energy?

I think a more realistic solution comes from the ranks of oil royalty itself. Descendants of the oil baron John D. Rockefeller went public this week saying they will back a shareholder rebellion to try and force Exxon's management to put more resources toward alternative energy. A group of resolutions, to be introduced at this month's shareholder meeting, call on Exxon to adopt a new energy policy, fund research on climate change and set public goals for reducing carbon emissions. The great-granddaughter of John D. was quoted as saying, "the truth is that Exxon Mobil is profiting in the short-term from investments and decisions made years ago ....and ignoring the rapidly shifting energy landscape...." Another said, "They are fighting the last war and not seeing they are facing a new war."

It is too early to tell whether the resolutions will pass, but if they do it could signal an important shift in the energy sector. At the very least, Exxon shareholders are thinking longer term. I wish I could say the same about U.S. politicians. Trying to buy votes with a summer gas holiday doesn't help solve our energy problem. Neither does blaming the oil companies. We need a comprehensive energy policy that encourages private sector solutions and helps American consumers come to terms with a harsh reality: we need to stop using so much energy. Forget about knocking 18 cents off a gallon of gas this summer, how about a bigger tax break on a hybrid?



soundoff (8 Responses)
  1. Jan Bennett

    (1) I'm with Rockefeller on this one.
    They could be spending it on Stirling Engines in the desert and be putting power into the nation.

    (2) Doesn't anyone out there ask for "relative" figures. IN accounting the figure we want is ROI. If they made 11 billion in a quarter – how much do they say they "spent" and "invested" to make it? If they put in 1 billion to get 11 billion thats ripping us off. If they put in 110 billion to get 11 billion that's probably not ripping us off. The media bear the responsibility to "raise" our awareness, not just scare us.

    Love you otherwise,

    Jan

    May 2, 2008 at 7:52 am |
  2. navneet kamboj

    If the company earned this much amount then its great. All the credit should go the workforce and the management. Y we are cribbing that they
    did so much profit. Did we media ever reported about the loss the same company faced before..

    May 2, 2008 at 9:02 am |
  3. Peter Kramer

    The politicians won't say what needs to be done, because if they do, they won't be voted into office. We prefer to solve tough problems later (if it all) rather than pay for them now. Tax breaks for gas and hybrids? Is the national debt not big enough already? Or would you prefer to solve that problem later :-)

    May 2, 2008 at 9:19 am |
  4. G. Cain

    This debate is absolutely ridiculous. The comments by Rockefeller's great grandaughter are meaningless and detract from the real issue: How to control the price of a commodity that can literally bring a country to its knees due to long-term dependence on oil and its derivatives?

    The more appropriate solution would be to re-classify gas companies as utilities and place them under state and/or federal government control so as to maintain a steady economy while utilizing the profits for "real" alternative energy choices that are doable and permanent.

    Let's get real folks and stop the academic debates and finger-pointing. Get something done by putting your politcal representatives to work!

    May 2, 2008 at 3:54 pm |
  5. Ruben Garcia

    We as individuals consumers in the U.S. have the potential to really send a signal more than any other country in the world. We consume probably twice as much discretionary oil than what we need for basic needs.
    I don't know of anyone that will even walk a block to go to the supermarket. Everyone jumps in their car and drives 150 meters to the market then drives around another 150 meters or more looking for parking in a full lot.
    Don't know of anyone that takes public transportation. Everyone want to show of the new SUV or Sports Car.
    Does anybody turn of the light in the U.S. when they leave a room?

    Todd – do u have any statistics on how much discretionary oil is use in the U.S.?

    May 12, 2008 at 11:32 am |
  6. Radwan Khershif

    We must not forget the now much weaker dollar. This contributes to those profits being not so huge after all !.

    May 12, 2008 at 10:12 pm |
  7. Mike R.

    Why don't we nationalize the oil companies like a lot of countries and use the profits to finance health care? Most of the oil belongs to the public and is given away at extremely low costs to rich corporations as presents for political favors. We could afford the high cost of gas if we didn’t have these outrageous health care premiums.

    May 19, 2008 at 6:35 pm |
  8. Sharon C Hickman

    I am 51 years old, I think it is time for our young people who are interested in change the way we do business in this country and abroad, should have the opporunity to do so. This country and people in it need something different. The world has change a great deal and we cannot keep running it the same way for 40 years. It is time for us to all get together and make some important decision for all. People need to put aside their difference and think about our children and grandchildren. More Power To The Ypung People in the policial world. Run this country it is your time. Need new young blood in the White House.

    May 20, 2008 at 5:08 pm |

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