Now the gas and oil companies are being demonized. The administration would like us to believe that the high gas problems have nothing to do with the President shutting down offshore drilling or closing off drilling rights in Alaska and other states. Only this administration would try to convince people that taking away gas and oil subsidies will lower the gas and oil prices. Why aren’t they after some of the other inane subsidies we hand out, such as corn subsidies? Why are we paying farmers to not grow? Why cut subsidies now and expect a positive outcome? Our economy is in the sewer and this administration is going to continue it’s decline.
Original Story (April 30th)
So President Obama, not being much of a capitalist, doesn’t want the oil and gas companies to make 2 cents profit on the very same gallon of gas the government profits off by 18.3 cents per gallon on regular gas and 24.3 cents on Diesel, to say nothing of the tax levied by states. The same government flimflam occurs in the oil industry.
Exxon’s hitting back-
Less than 3 percent of ExxonMobil’s earnings are from U.S. gasoline sales
ExxonMobil’s earnings are from operations in more than 100 countries around the world. The part of the business that refines and sells gasoline and diesel in the United States represents less than 3 percent – or 3 cents on the dollar – of our total earnings. For every gallon of gasoline, diesel or finished products we manufactured and sold in the United States in the last three months of 2010, we earned a little more than 2 cents per gallon. That’s not a typo. Two cents.
Oil is a commodity; prices are set in the global market
Crude oil is a commodity, and like all other commodities – such as corn, wheat or sugar – the price is determined by buyers and sellers in a global market. Buyers are paying more for oil because the global economy is strengthening, anddemand for products derived from crude oil is on the rise. Political instability in some oil-producing nations is also contributing to uncertainty about future supply. Oil markets are well supplied today, but uncertainty about tomorrow’s supply is reflected in prices today. Finally, the U.S. dollar is at a three-year low against other currencies – accelerated last week after a warning by Standard & Poor’s about the country’s $14.3 trillion debt and relative economic weakness. The weaker the dollar, the less it will buy – meaning more is spent for the same amount of a commodity, whether it’s crude oil or nearly all of the commodities in the following chart.
ExxonMobil doesn’t set oil prices
Take a look at the chart at right. ExxonMobil owns less than 1 percent of the world’s oil reserves, and it produces less than 3 percent of the world’s daily oil supply, so it’s really not credible to suggest that we are responsible for world oil prices. ExxonMobil actually buys more crude oil than we produce. Last year, we spent $198 billion on crude oil, which we used to make refined products such as gasoline.
What goes into the price of gasoline The main component of the price at the pump is the cost of a barrel of crude oil. Another major component of the price of gas is state and federal taxes, which range from a high of 66 cents per gallon in California to a low of 26 cents per gallon in Alaska, according to January 2011 data. How are pump prices set at Exxon and Mobil stations? We don’t own 95 percent of them, and therefore we don’t set the price. Local stations are often owned by a businessman or businesswoman in your community, and they set their own prices based on local market conditions.
ExxonMobil’s earnings are in line with the industry average
In 2010, ExxonMobil made less than 8 cents for every dollar of revenue from all of our businesses around the world. That’s less than half of companies selling pharmaceuticals, beverages, tobacco and computers, just to name a few. On a dollar-for-dollar basis, our earnings, and those of the U.S. oil and gas industry at large, are generally in line with the average earnings of all U.S. industries.
ExxonMobil is one of the largest taxpayers in the United States Last year, our total taxes and duties to the U.S. government topped $9.8 billion, which includes an income tax expense of $1.6 billion. Over the past five years, we incurred a total U.S. tax expense of almost $59 billion, which is $18 billion more than we earned in the United States during the same period. Critics often try to ignore these facts by saying the oil and gas industry receives “subsidies.” But what they really mean is that they want to increase our taxes by taking away long-standing deductions for our industry while leaving these same deductions in place for other sectors of the economy.
ExxonMobil invests in new energy supplies
ExxonMobil’s investments to find and produce new supplies of oil and natural gas totaled $32 billion in 2010 – exceeding our earnings by more than $1.7 billion. From 2011 to 2015, we plan to invest $33 billion to $37 billion annually in new energy supplies. In the past 25 years, we’ve invested almost $400 billion in energy projects – an amount that nearly matches our income during that time.
Exxon Mobil earnings go to our shareholders
Once we’ve paid our expenses, paid our taxes and funded new projects, we turn the rest of the money over to our shareholders. Last year we distributed more than $19 billion to shareholders through dividends and share purchases.
If you’re living in the United States – where some 85 percent of our shareholders live – chances are you’re benefiting in some direct or indirect way from our earnings even if you don’t own our stock. For example, if you live in any of the following states, your public sector or teachers retirement funds hold shares in ExxonMobil: New York, California, Texas, Ohio, Colorado, Alabama, Tennessee, Alaska, Michigan, Pennsylvania, Kentucky and Utah. Many more retirement funds, 401-Ks and IRAs hold shares in ExxonMobil and other major publicly traded oil companies – including those for government workers and members of Congress. Read here: ExxonMobil fights back
Obama has demonized the oil and gas companies but never himself, though he is shutting down oil and gas in the U.S. as he supports it in Brazil and Columbia–2 cents per gallon and more
“Obama slams oil company profits as gas prices surge
By Zachary A. Goldfarb
President Obama on Saturday blasted oil companies for enjoying gangbuster profits while pump prices surged to nearly $4 a gallon this week, and he again urged Congress to end $4 billion a year in subsidies for the oil and gas industry.
Obama fired the volley in his weekly radio and Internet address, released Saturday morning, the latest in an effort by the White House and Congressional Democrats to tie Republicans to deeply unpopular energy companies.
“When oil companies are making huge profits and you’re struggling at the pump, and we’re scouring the federal budget for spending we can afford to do without, these tax giveaways aren’t right,” Obama said. “They aren’t smart. And we need to end them…”