Consumers on Fumes, Oil Industry Guzzles Profits

Over the last year, gas prices have increased by 39 percent. Consumers are struggling to pay prices that average $2.23 per gallon. Meanwhile, the oil companies are raking in record profits, giving their executives fat raises and asking for billions in incentives from taxpayers.

According to the Wall Street Journal, “Exxon Mobil Corp. and Royal Dutch/Shell Group both reported huge increases in first-quarter income, benefiting from the industrywide bonanza also swelling the coffers of their peers: high prices for the oil they pump and high margins for refining it.” [Wall Street Journal, 4/29/05]

Exxon “said net income totaled $7.86 billion, or $1.22 a share, up 44% from $5.44 billion, or 83 cents a share, a year earlier…. Exxon’s results were a record first-quarter take for the oil behemoth… [Wall Street Journal, 4/29/05]

SHELL PROFITS UP 40% FROM LAST YEAR: Shell “reported net income of $6.8 billion … up 40% from $4.85 billion in the first quarter of 2004.” [Wall Street Journal, 4/29/05]

$30 BILLION IN EXTRA REVENUE FOR CONOCOPHILLIPS: The Houston Chronicle reports “ConocoPhillips, the nation’s third-largest oil and gas company, said today that first-quarter earnings soared year-over-year on high oil prices…. Total revenue was $38.9 billion, up from $30.2 billion last year….” [Houston Chronicle, 4/27/05]

EXXON’S HEADACHE — WHAT TO DO WITH $40 BILLION IN CASH?: Exxon Mobil’s “soon-to-retire CEO suddenly has a new anxiety: how to spend the windfall wrought by $55-a-barrel oil. By the end of April, Exxon will have a cash hoard of more than $25 billion…. If oil simply stays where it is now, Exxon’s cash could approach $40 billion in 12 months. By then [Exxon’s CEO] is expected to have handed off the top job — and the headache of what to do with all that cash.” [Fortune Magazine]

OIL INDUSTRY EXECUTIVES GET 109.1% RAISE: The recent Wall Street Journal compensation survey found that oil and gas executives’ total direct compensation (2004) was about $16.5 million (median). And the median percent change from 2003 to 2004 was 109.1 percent. This was by far the highest of the industries profiled. [Wall Street Journal CEO Compensation Survey]

BILLIONS IN GIVEAWAYS TO OIL INDUSTRY TUCKED IN ENERGY BILL: In the Energy Policy Act of 2005, oil and gas companies will receive $515 million in authorized spending from the U.S. government, including “$125 million to reimburse oil and gas producers for 115% of the costs of remediating, reclaiming, and closing orphaned wells.” The bill also created a $2 billion ultra-deepwater fund to pay for research that companies are already pursuing without government help. On top of that, the bill provided $3.275 billion in new tax breaks to the oil and gas industry. [Taxpayer.net]