The Bush Years' Single Accomplishment: Exxon Mobil's Staggering Record Profit
In breathtaking example of the manner in which oil has corrupted the Bush administration we have prima facie evidence of the perverted priorities of the last eight years. This is an administration that has left our economy at greater risk than at any time during the great depression, a nation whose sons and daughters are dying and wounded in a futile war in Iraq, a nation where millions of families are being evicted from their homes, a nation whose workers and savers are seeing their 401Ks and retirement accounts being eviscerated by crippling selloffs in the nation's largely free-form, soporifically regulated stock markets, by hands off oversight commissions encouraged to do nothing by an administration that probably has trouble spelling the word "economics." Not to speak of the loss of respect and moral suasion for America and its traditions, trashed in the perception of others by this administration's comportment, lack of vision, and inability to communicate.
Into this miasma of the nation's misery comes one shining light: ExxonMobil, with quarterly profits of $14.83 Billion, the greatest by far in history. And here the administration has acted triumphantly, capping nearly a quarter of a century of unrelenting effort to achieve a cascade of riches for the oil producers in dimensions undreamed of at the outset of this sordid enterprise.
You see, it all started in 1986 when George H.W. Bush, then Vice President, and on his own volition (in this I know I'm right) flew off to Saudi Arabia to convince King Fahd and his entourage to revitalize OPEC in order to raise the price of oil. Oil prices were low and the economy of Texas was hurting. So to help Texas the whole world was going to pay more for oil. And the Saudis, until then not knowing what the world's reaction would be if they started to constrain supply, happily jumped on board knowing they had the implied support of the U.S. Government cheering them along.
George W. Bush clearly understood from the get go, in the footsteps of his father, that his administration together with Halliburton-Cheney would do all it could to support ever higher oil prices and profits. And so it came to pass.
-Immediately after the invasion of Iraq all was done by the administration to push
Iraq back into the arms of OPEC.
-The Saudi's were coddled in their policy to constrain OPEC oil production.
-The Strategic Petroleum Reserve was managed more to support oil prices than for national security reasons (please see "Oil Prices Sliding? Hurry Moscow, Call our Strategic Petroleum Reserve Maven Energy Secretary Bodman," 10.30.08).
-Oil trading on commodity markets were virtually unregulated until Congress aggressively intervened earlier this year.
-Years were to pass before a limp automobile mpg guideline would be mandated.
- Amtrak funding was cut until this year, while Europe, China, Japan were building infrastructure for high speed trains.
-Brazilian ethanol was made subject to a 54 cent per gallon import duty .
-alternative energy programs were given more lip serve than real support (some $20 billion over the course of the administration while Wall Street was getting hundreds of billions in the last weeks alone).
-A Department of Energy almost completely wedded to the interests of the oil industry rather than the national well being.
-A Department of the Interior filled with oil industry alumni plagued with scandalous revelations of oil industry favoritism. .
-One could go on.
It is an achievement of misgovernance that will defy American historians to come up with its equal. But it was all great for the oil-patch and its cronies. And one can imagine there is Papa Bush cheering all the way with a ringing "well done," not to speak of the champagne corks popping down in Irving Texas, headquaters for ExxonMobil.
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Here is a major technology break-through the ability to produce fuel from algae, the process takes about 30 minutes. A Republican senator attended the event and it doesn’t even make local news. The Bush administration absolutely killed energy technology. I’m an Energy Engineer and have witness the use of the fuel and the prototype system to produce the fuel.
Here is a link to the Web site with video from a bio-algae oil to green fuel demonstration on Monday 5-19-2008. They use the fuel in a diesel vehicle demonstration.
http://alg
Here is the some information on the Dutch Company that has developed an algae bio-reactor that will produce one (1) ton of algae per day on 2.2 acres (equivalent). This is enough algae to produce about 166 gallons of green fuel per day. This system can be used to reduce tons of CO2 emissions per day from power/industrial plants.
Dutch companies AlgaeLink N.V. and KLM Royal Dutch Airlines will cooperate on a pilot project to develop an alternative aviation fuel from algae. The announcement of the exclusive agreement was made at the Future Fuels Aviation Summit in London.
http://www
All of the "adventures" of this administration were pre-planned. Think of Cheney's SECRET ENERGY commission
Also remember the GHWB had asked Cheney to pick a good VP for Little Georgie and Cheney picked HIMSELF.
Unbelievable that they get away with the things they do.
A much more important accomplishment than Exxon's profits is the US debt. :
In the last twelve months, the US national debt increased ONE AND ONE-HALF TRILLION DOLLARS.
Here are the figures for the total national debt from the US Department of the Treasury http://www
10/31/2007 9,079,086,
10/30/2008 10,530,893
Remember, the TOTAL US Debt in 1980, when Reagan took office, was approximately $1 trillion.
Remember also that Bush inherited a surplus. The same Treasury Department website shows a reduction in the debt from October 1999 to October 2000. By October, 2001, with Bush as president, the debt has started increasing once again.
Let's look at the other side of the coin. How much did the government get for all gasoline and other products the oil company produced? Out of that $14.8b, the income tax was $11.3b, which is 76% of the profit. This tax is off the off bottom.
Then there's the taxes off the top which are FOUR TIMES as much as the oil company earns per gallon. Doing the math makes the government getting $59.2b plus the $11.3b making a total of $70.5b for one quarter for one oil company. That's TWENTY TIMES the net income of the big bad oil company. So now we’re talking about windfall taxes to take that remaining $3.5b which could just run that company out of business or cause them to move overseas. No wonder we're buying so much of our oil and gasoline from overseas.
This is the socialist tax policy and where a majority of the money we pay for fuel ends up.
Who builds all the infrastructure that makes it possible for the oil companies to even sell gasoline.
The government funds all the roads, highways, bridges, traffic lights, - I could go on but, the list would be to long. The oil companies are probably, in reality, the heaviest subsidized industry in this country.
They should pay a high tax rate, all considered.
Trust me the oil companies are getting a great deal. They are probably the largest socialized industry in this country. They are not going to relocate over sea's.
The millions and billions of taxes dollars the oil companies pay fund most of those infrastucture projects. They already are paying a higher tax rate, all considered. The largest socialized industry is the government which under the socialists will be under the authority of the UN and the rest of the world.
What the hell are you talking about? Show us all where the oil companies are paying a 76% rate. Where'd ya get the Kool-aid, loon?
By the time the state and local governments get their share, it all adds up.
Don't forget what Obama told us when he said that by drilling now we will only decrease in the cost of gasoline by 2-3 cents. All we've done is talk about drilling and the cost is down by nearly 50%. In Kansas is went from $3.89 per gallon to $1.97.
I doubt the American oil companies will see profits like they had last quarter but the government will also see a decline in tax receipts due to the decline in demand and consumption. You can bet that we will see an increase in taxes on gasoline and other petroleum products to make for it. Obama has guaranteed that.
Maybe Exxon can cut consumers a break by taking back a billion or so from their execs and lowering prices on consumer pricing.
Because they run a business, not a charity.
Most of those net profits went to dividends for pensions and other retirement accounts which will eventually be taxed again. The execs didn’t get billions or there would be no dividends and no investors. You must be mathematically challenged if you don’t know the difference between billions and millions. A billion is 1000 times bigger.
Those numbers are highly deceptive. When Exxon reports income it refers to their worldwide tax bill. In 2007 the entire US Income tax paid by Exxon to the US was about $5B. Obviously the $11.3 B declared for the 3rd Q was not a US income tax accrual. Instead it was probably between $1.5B-$2.0
What's deceptive about it? The point I was making was that Government takes 20 times as much of the money we spend on gas or other products than those who explore, drill, extract, transport, refine and distribute it. What difference does it make if it's the local, state, federal, or international government. Socialism by nature is deceptive as well as authoritarian. They would have us believe that all wealth belongs to them and they decide how much we can keep. Take a look at Venezuela.
I agree. It makes me sick that we are in recession, and yet oil companies are cashing in.
Here's a really great interview worth watching with the author of "The Tyranny of Oil". She explains how the big oil companies are at the top of their financial and political power in the U.S. while at the same time, they are facing the extinction of their product. And, rather than investing in alternative energy, they are working to get their hands on as much remaining oil as possible- working with governments to accomplish this. She also talks about how we as ordinary citizens can ban together to stop this. It's very interesting.
http://com
Oil companies are reporting record profits as are oil service companies, natural gas companies, coal companies, oil and nat gas equipment and drilling companies, steel companies, energy infrastructure engineering firms, heavy machinery companies, some mining companies, electrical equipment companies, alternative energy companies, software companies, most healthcare companies, etc. etc. Are you also upset that these companies are making record profits?
I think they call that economic growth or expanding the pie. If the Socialist have their way and redistribute that wealth, whats the use? The pie will shrink and there wont' be much pie to redistribute.
I never understand why it's up to oil companies to invest in alternative energy. Why shouldn't Xerox lead the charge, or McDonald's?
Oil companies find oil, produce it, and refine it. What in the world does that have to do with solar panels or electric cars? Why shouldn't oil companies be fighting to gain rights to as many resources as possible? Would it be better if they just closed their doors?
The working people must be emancipated from their age-old oppressors and exploiters, the landowners and capitalists. This step in the direction of real freedom and real equality, a step which for its extent, dimensions and rapidity is without parallel in the world, will be ignored by the supporters of the bourgeoisie (including the petty-bourgeois democrats), who, when they talk of freedom and equality, mean parliamentary bourgeois democracy, which they falsely declare to be “democracy” in general, or “pure democracy” . But the working people are concerned only with real equality and real freedom (freedom from the landowners and capitalists), and that is why they give the Barack Obama such solid support.
You've hit the nail on the head with this point"
-Immediately after the invasion of Iraq all was done by the administration to push
Iraq back into the arms of OPEC.
The main reason Iraq was invaded was to force them back into OPEC. The other was to remove their threat to price their oil in Euros--not American Dollars!
Iran has made this same threat....
I see you read the "invade Iraq as they will price their oil in euros" conspiracy theory. Nice..... I now know of two people who actually believe that.
Iraq nets handsome profit by dumping dollar for euro
Faisal Islam, economics correspondent
Sunday February 16, 2003
Observer
In October 2000 Iraq insisted on dumping the US dollar - 'the currency of the enemy' - for the more multilateral euro.
The changeover was announced on almost exactly the same day that the euro reached its lowest ebb, buying just $0.82, and the G7 Finance Ministers were forced to bail out the currency.
Almost all of Iraq's oil exports under the United Nations oil-for-food programme have been paid in euros since 2001. Around 26 billion euros (£17.4bn) has been paid for 3.3 billion barrels of oil into an escrow account in New York.
The Iraqi account, held at BNP Paribas, has also been earning a higher rate of interest in euros than it would have in dollars.
'It was seen as economically bad because the entire global oil trade is conducted in dollars,' says Fadhil Chalabi, executive director of the Centre for Global Energy Studies.
The marked appreciation of the euro, higher interest rates, and the ability to pay mainly European suppliers in euros is believed to have made hundreds of millions for the Iraqi oil-for-food programme.
UN officials insist that this benefit helps to pay for humanitarian aid, war reparations, and the cost of weapons inspectors.
guardian.c
continued.
"The import duty on Brazilian ethanol is to help Midwestern farmers and domestic ethanol producers, most of which would assuredly go right out of business if the tariffs were removed."
Tarriffs are Socialism are they not?
They are inefficient - because they are tax payer subsidies for businesses that cannot compete in a Global Economy.
In a Free Market these businesses would be forced to closed because they are unprofitable.
So why are there subsidies.
Or, is my employer O.K to run at a loss and be subsidized by the Government as well?
Can I start a company up with the business plan of being subsidized by the government?
Or do I need to write it up in less obvious language?
the 1986 analogy is not a good one. There was a huge glut that year that brought the average price of West Texas Crude down to $11 by mid-year. Second, the increase in the price of oil this decade has nothing to do with the Saudi's constraining production. It, rather, was due to a massive increase in global demand and a flat-lining of worldwide oil producing capacity. The comment about the Strategic Petroleum Reserve doesn't make sense to me. I believe we continued to add to the Petroleum Reserve this year because of potential conflict with Iran, which is a national security issue. Oil was let out of the reserve in the aftermath of Katrina-Rita because of real shortages. Trading on commodity markets is something that has gone on for over 100 years in the US. How is it the fault of George W Bush that it continues to go on? It certainly is not illegal and the vast majority of people who understand the market don't think it should be. The mpg guideline would hurt the auto companies, companies that need help now. Plus, I believe a law was passed in 2005 to increase fuel efficiency over a period of 10 or so years. It wouldn't have helped over the last few years anyway as it takes a long time to replace the entire US auto fleet.
" the increase in the price of oil this decade has nothing to do with the Saudi's constraining production. It, rather, was due to a massive increase in global demand and a flat-lining of worldwide oil producing capacity"
If oil traded around 20-30 dollars per barrell in 2000, according to your theory world demand for oil by 2006 went up 400 percent in less than 5 years. Do you have any proof of that much added demand?
That's not how oil is priced. The big factor for the price runup in the last year was lack of spare oil producing capacity.
"The loss of spare capacity has strong implications both on price levels and the dynamic behaviour of crude oil and oil product prices. Figure 2 describes a useful model to explain the current behaviour of oil prices. History of low investment in the oil industry, accelerated increase in global oil demand and low non-OPEC supply growth led to the reduction of OPEC spare capacity. These same factors contributed to bottlenecks in the oil supply chain, especially in refining. As a result, the global oil system’s ability to respond to demand or supply shocks weakened considerably at times when the oil system witnessed a number of such shocks (political, climatic, technical – and speculation about the ability of OPEC to respond to them). In the absence of the capacity cushion, the impact of these shocks is highly magnified on oil prices. In particular, when capacity constraints become the main force in the market, the following price dynamics are likely to emerge. First, we expect to see an accelerated rise in the average level of oil prices. Second, we expect an increase in the volatility of oil prices. Third, we are likely to witness more occasional spikes in crude and product oil prices. Finally, refining bottlenecks add a further dimension to the oil price dynamics by widening oil price differenti
NO, he doesn't...
An article from fall 2004:
"OPEC's spare capacity — idle production that can be brought on when needed — has sunk from about 15 million barrels a day in the mid-1980's, to around 1 million to 1.5 million barrels today."
George H.W. Bush, not George W. Bush.
The current idiot-in-chief is GWB, the FORMER Reagan V.P. is GHWB.
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