If you ever wonder what oil companies are doing with their profits, which were greater last year than any industry's in the history of the world, take a look at today's Los Angeles Times. No, Exxon's not buying Hawaii. But Chevron is trying to buy the right to pollute California's water supply without punishment.
After recording the highest annual profits in the company's 126 year history, Chevron is using an undisclosed amount of its $14.1 billion in 2005 profits to sponsor a November 2006 ballot measure campaign to eliminate punitive damages when a company's product is subject to government regulation. Chevron officials admitted to the Times that the initiative would remove Chevron from legal accountability for its contamination of the ground water with MTBE.
Should Chevron be using its windfall profits to change the rule of law so that the company can avoid the wrath of juries that find it acted with malice and oppression -- the standard to obtain punitive damages in California? If juries are convinced the company knew MTBE would cause grave harm to the water supply, but chose to use the additive rather than ethanol anyway, then Chevron should submit to their will. Taxpayers, represented by their water districts, who have sued Chevron for contaminating their water supply have a right to punish the company for its malice.
If you're a Chevron shareholder, it's time to dump your stock. A board of directors and executives with such arrogance is bound to wound even this profitable a company. Clearly Chevron is underestimating the damage to its brand, in its biggest market, when the facts of this ballot war's self-serving nature come into focus for more and more Californians.
In fact Chevron's pending initiative makes the best case for a strong windfall profits tax. If Chevron is to use its windfall profits for a massive political propaganda campaign aimed at putting itself above the rule of law, why should it be permitted to make such outrageous sums at the expense of the American motorist and economy? Wasn't it supposed to be using the money to find new sources of oil and to develop alternate sources of energy, not to stick it to taxpayers who seek to clean up their water supply.