by Daniel J. Weiss, Jackie Weidman and Celine Ramstein

Memorial Day weekend is an opportunity to remember and honor the countless sacrifices made by our men and women in uniform in order to protect this great nation. It also marks the traditional start of the summer driving season—when families pack their bags and pile into their cars or minivans to hit the road for destinations across the country. This weekend nearly 35 million Americans are expected to travel 50 miles or more to visit family and friends. Ninety percent of them will likely drive to their destination, filling up their tanks with expensive gasoline or diesel fuel before hitting the road.

The number of Memorial Day travelers is expected to increase by 1.2 percent—an estimated 500,000 more people—to 34.3 million travelers this year compared to 2011. But those travelers are projected to stay closer to home this weekend, with the average travel distance dropping by 19 percent. This may reflect the spike in gasoline prices earlier in the year, averaging around $4 per gallon at one point.

As we pointed out in our report—“Is Big Oil Rigging Gasoline Prices?”—the price of gas at the pump dramatically increased during the first quarter of this year despite the fact that domestic production was at an eight-year high, and domestic demand for oil and oil products was down.

Since reaching its peak in late March, the cost of a fill-up has fortunately receded. Gasoline prices fell for the sixth straight week to an average of $3.75 per gallon. Despite the fact that gas prices are 21-cents-per-gallon lower than they were this time in 2011, it is still a big bite out of many Americans’ budget. According to an analysis by the American Automobile Association, 47 percent of travelers said that high prices at the pump will impact their plans this Memorial Day.

This past week the American Petroleum Institute—the political operatives of Big Oil—released a “report” outlining its policy wish list. Some of the demands included the “opening of the eastern Gulf of Mexico, the Atlantic Outer Continental Shelf, and the Pacific Outer Continental Shelf” to oil and gas production.

If Big Oil gets its way, it could have devastating impacts on coastal tourism. Many of the areas that Americans travel to during the summer months would be vulnerable to oil spills similar to the 2010 BP Deepwater Horizon disaster that spewed nearly 5 million barrels of oil into the Gulf of Mexico, devastating the ecosystem and the Gulf economy.

The Outer Banks—an area that would be vulnerable to drilling located off the mid-Atlantic coast—attracts more than 7 million visitors each year. When surveyed, more than 49 percent of respondents said “beautiful beaches” are the main reason for summer visits there. It’s highly doubtful that tourists would flock to build sandcastles on oil-soaked beaches.

Likewise, those vacationing out west could find a peaceful kayaking trip disrupted by the 1,300 gas wells that Denver-based Gasco Energy, Inc., wants to drill in Desolation Canyon, Utah. This remote area on the Green River is an essential part of Utah’s tourism industry, which generates nearly $300 million annually in total state tax revenue from tourism.

Beginning with the Memorial Day weekend and throughout the summer, Americans will spend their hard-earned dollars traveling to visit family and friends, with many people taking the opportunity to enjoy the nation’s natural wonders. Meanwhile, Big Oil will be making huge profits off of Americans’ travel expenditures on fuel while at the same time fighting for increased drilling that threatens some of our most cherished vacation destinations.

Here is a by-the-numbers examination of what Big Oil will cost us this weekend:

An expensive holiday weekend ahead

• 642 miles: Average distance Americans will travel this Memorial Day weekend
• 804.5 million: Gallons of gasoline expected to be purchased over the three-day weekend
• $113: Total cost of gasoline for an average trip this Memorial Day weekend [1]

Wall Street speculators drive up oil and gas prices

• $92.60: Price of a barrel of oil on May 21, 2012
• $20: The estimated price-per-barrel-of-oil increase due to speculation, according to Forbes magazine’s formula
• $14.60: Additional gasoline expenditure for the average Memorial Day trip, thanks to speculation
• 11: Number of quarter-pound hamburgers with buns for a Memorial Day picnic that you can make for $14

High pump price increases Big Oil profits

• $33.5 billion: Amount of profit the five biggest oil companies—BP, Chevron, ConocoPhillips, ExxonMobil, and Royal Dutch Shell—made in the first three months of 2012
• $1 billion: Estimated combined earnings the big five oil companies will earn over the three-day Memorial Day weekend if second quarter profits replicated first quarter profits

Increased drilling would destroy vacation spots for millions of Americans

• 7 million: Number of tourists that visit the Outer Banks in North Carolina each year
• 1 million: Number of people employed by Florida’s tourism industry
• $4 billion:Value of the tourism industry in Utah, where Gasco Energy wants to drill 1,300 gas wells

Big Oil’s influence machine

• $14 million: Total lobbying expenditures by the big five oil companies so far in 2012
• $906,000: Amount given to Republican presidential candidate Mitt Romney by the oil and gas industry thus far in the 2011–2012 election season
• $182,000: Amount given to President Barack Obama’s re-election campaign by the oil and gas industry thus far in the 2011–2012 election season

– Daniel J. Weiss is a Senior Fellow and Director of Climate Strategy, Jackie Weidman is Special Assistant for Energy Policy, and Celine Ramstein is an intern with the Energy Policy team at the Center for American Progress. This piece was originally published at the Center for American Progress.

Endnotes

[1] This calculation is based on the most recently available fuel economy data (2009) for all passenger vehicles and SUVs/light trucks, and employs the U.S. Department of Transportation data on the composition of the passenger vehicle fleet, which is 57 percent cars and 40 percent light trucks. For more information, see: “Table 4-23: Average Fuel Efficiency of U.S. Light Duty Vehicles,” available at http://www.bts.gov/publications/national_transportation_statistics/html/table_04_23.html.

Yesterday, the House Natural Resources Committee passed three bills to mandate and encourage oil and gas drilling in the West.  All of the bills throw open more public lands to drilling, mirroring the wishes of the oil lobby, the American Petroleum Institute (API).

Just two days ago, API released a report outlining its political wish list.  It included two provisions about drilling on lands that belong to American taxpayers:

We Are Calling For: The opening of the Alaska National Wildlife Refuge – 1002 Area; portions of the Rocky Mountains; lifting of the drilling moratorium in New York, and timely review projects on federal land.

We Are Calling For:  The federal government to increase lease sales and adopt pro-access processes to improve development of U.S. oil and natural gas resources on public lands.

All three of the drilling bills passed by the Natural Resources Committee yesterday seek to open more lands for oil and gas development, increase lease sales, and streamline access — just as API has asked Congress to do:

-  H.R. 4381 from Rep. Scott Tipton (R-CO) requires planning for an “all of the above” energy plan on public lands and requires the relevant secretaries to meet a “domestic strategic production objective.”

-  H.R. 4382 from Rep. Mike Coffman (R-CO) mandates leasing and requires that at least 25 percent of the acres nominated by the oil and gas industry be leased, in essence turning land management decisions over to the industry.

-  H.R. 4383 from Rep. Doug Lamborn (R-CO) would force the Interior Department to issue oil and gas leases within a certain arbitrary time frame, as well as punish citizens for exercising their legal right to protest oil and gas leases.

Not surprisingly, these three members have taken significant campaign contributions from the oil and gas industry. In the 2012 cycle, oil and gas has given Tipton  $44,250; Coffman:  $77,500; and Lamborn:  $31,250.

More light was recently shed on the cozy relationship between members of Congress and the oil and gas industry. A few days ago, emails from a staffer to Senator James Inhofe (R-OK) were released referring to the oil and gas industry as “our partners.”

While the three bills passed yesterday seek to increase access to public lands for energy development, an Interior Department report released on Tuesday shows that the industry already has incredible access.  Not only did the government hold “… three of the top five largest [lease] sales in the agency’s history” last year, but 56 percent of the public lands leased to the oil and gas industry in the lower 48 states were not producing any fossil fuels or being explored.

Jessica Goad is the Manager of Research and Outreach for the Public Lands Project at the Center for American Progress Action Fund.

by Jorge Madrid

The fossil fuel industry is aggressively pushing its drill-everywhere-drill-anything agenda, which would open up every square inch of America to extraction. So what would happen if we gave the industry what it wants?

Today, the Center for American Progress released “America’s Future Under ‘Drill, Baby, Drill,’” describing where we may be in the year 2030 if we continue down the path of fossil fuel dependency that the American Petroleum Institute (API) advocates a report on the organization’s “vision,” also released today.

If you ask API, that vision means opening up significant portions of our oceans that are currently off-limits to drilling; turning large swaths of our pristine public lands into areas for extraction; and pushing shortcuts in the environmental and public health review process to speed up permits.

In short, Big Oil wants a free ride to “Drill Baby Drill” straight into our children’s future.

But at what cost?

CAP’s report illustrates some of the costs we may incur if Big Oil gets its way: Intensifying heat waves, drought, and accelerated sea-level rise become a normal part of our warming, unchecked, carbon-spewing world. Public health impacts in the U.S. from smog and ozone quadruple, global food prices rise, and water scarcity exacerbates already-worsening conditions in Asia, Africa, and Latin America.

What will our economy look like under the “Drill Baby Drill” scenario? Consumers will be more vulnerable to spikes in the global oil market as clean energy and efficiency become an afterthought; public health costs add up as lawmakers strip needed regulations; and America misses an opportunity to invest in a globally-competitive clean energy sector, thus ceding leadership to China, India and Europe.

Of course, we can’t predict what 2030 will exactly look like. But we do have a massive body of scientific evidence showing us we must reduce emissions quickly today — otherwise, it will be too late.

Big Oil can no longer pretend that its vision is consistent with a prosperous, healthy future. Making our country more reliant on fossil fuels is good for the largest, most profitable companies in the world — but it’s terrible for society.

And now, come with us into the dystopian future, to the year 2030…

Jorge Madrid is a Research Associate for Energy Policy at the Center for American Progress.

The Department of Interior released an updated analysis of fossil fuel leases today, finding that more than two thirds of offshore leases and half of onshore leases are sitting idle — “neither producing nor under active exploration.”

The report, “Oil and Gas Lease Utilization, Onshore and Offshore Updated Report to the President,” explained that oil and gas companies hold thousands of undeveloped leases. Despite holding these inactive leases, the oil industry continues to demand the opening of new, previously protected federal lands and waters areas to drilling.

The report found that:

More than 70 percent of the tens of millions of offshore acres currently under lease are inactive, neither producing nor currently subject to approved or pending exploration or development plans. Out of nearly 36 million acres leased offshore, only about 10 million acres are active – leaving nearly 72 percent of the offshore leased area idle.

In the lower 48 states, an additional 20.8 million acres, or 56 percent of onshore leased acres, remain idle. Furthermore, there are approximately 7,000 approved permits for drilling on federal and Indian lands that have not yet been drilled by companies.

According to the Energy Information Administration, total federal oil production (offshore and onshore) has increased by 13 percent during the first three years of the Obama administration combined, compared with the last three years of the previous administration. According to independent analysis, the total number of active rigs operating on the U.S. outer continental shelf was higher in January 2012 than any time since May 2010.

The American Petroleum Institute – Big Oil’s lobbying arm — claims that the Department of Interior ignores exploratory work on leases; however, that is clearly included in DOI’s assessment above.

API recently demanded that the Obama Administration open up the North Atlantic to “seismic exploration” for oil. This is an area that supports vital American fisheries.

In addition to holding thousands of undeveloped leases while lobbying to drill in the Arctic National Wildlife Refuge, off the New England Coast, and in the Eastern Gulf of Mexico, the big five oil companies produced 12 percent less oil in 2011 than in 2006 — all while making record profits.

Daniel J. Weiss is Director of Climate Strategy at the Center for American Progress Action Fund.

Koch Industries has produced its own video claiming it doesn’t deserve the label of a secretive Big Oil corporation.

Shockingly, Factcheck.org and the Washington Post have taken up Koch’s argument. Factcheck.org wrote that despite Koch’s $100 billion revenue, the corporation’s diverse holdings mean “it is hardly in the league of the truly ‘big oil’companies.” The Washington Post Factchecker took the same angle.

While it’s true the most profitable U.S. corporations — ExxonMobil and Chevron — are larger than Koch, using this standard to claim the company isn’t Big Oil is incorrect. Let’s take a look at some key facts:

• The Koch brothers’ net worth tops $50 billion and they have pledged to spend $60 million to defeat President Barack Obama, according to the Huffington Post.
• The Koch PAC is the largest oil and gas contributor — donating more than even ExxonMobil — spending over $1 million in each of the last two cycles. This cycle, it has spent almost $750,000. Koch Industries sends 90 percent of these contributions to Republicans.
• It’s the fourth-largest lobbyist in the oil and gas industry, spending $2,300,000 so far in 2012 and over $8 million in 2011.
• Koch Industries emits over 300 million tons of greenhouse gases a year, based on the assumption that Koch emits the same amount of greenhouse pollution per billion dollars in revenue as Exxon and Chevron.
• Flint Hills Resources, a Koch subsidiary, processes 300 million barrels of oil a year. This company is responsible for up to five percent of the U.S. 7-gigaton carbon footprint.
• Koch says itself that the company is on par with big banks and is among the world’s top five oil speculators.

• Koch is a major player in driving up gas prices through speculation, hurting American consumers. ThinkProgress reported that in 2008, Koch leased four supertankers to hold oil in the Gulf, leading to a gas price increase anywhere from 20 to 40 cents a gallon at the time.
• According to Inside Climate News, Koch industries “has touched virtually every aspect of the tar sands industry since the company established a toehold in Canada more than 50 years ago.” It is active in mining Canada’s tar sands and exporting to the U.S., and is active in Canadian politics, with half a million dollars in donations between 2007-2010.
• As reporters consider these factors, Koch has been widely reported as a Big Oil corporation by media outlets like Politico, Forbes, NPR, and Politifact.

It is absurd to say Koch Industries is not Big Oil when it plays such a hugely influential role in a wide variety of fossil fuel markets — all while flexing its power to protect the oil industry’s special interests.

ALEC has faced backlash recently for its role in crafting Florida’s Stand Your Ground laws. Now the organization is taking the same secretive approach to kill renewable energy development across the country.

Oil and gas corporations have a very strong role in politics through groups like Americans For Prosperity, American Petroleum Institute, and, of course, ALEC. Four of the largest oil and gas corporations and two of the most profitable U.S. corporations overall, ExxonMobil, Chevron, Shell, and BP, sit on ALEC’s task forces. And so today, according to documents posted by Common Cause, representatives from these and other energy groups will discuss potential legislation that would undermine clean energy standards and limit regulations of polluting industries.

The agenda items illustrate ALEC’s objectives. An economist from the oil lobby American Petroleum Institute leads a discussion on oil and gas prices, and a few of the panels include, “The Dirty Truth Behind Reusable Bags” and “Resolution Supporting a Reasonable Compliance Timeline and Economywide Impact Study of EPA’s Mercury and Air Toxics Rule.” Peabody Energy — one of the largest coal companies in the world — will give the presentation on “Regulation Through Litigation Of Greenhouse Gases Is Unsound Public Policy.”

ALEC already benefits from special exemption from some state laws: For example, South Carolina, Indiana, and Colorado have specifically exempted ALEC from lobbying status.

The oil industry’s astroturfing does not end with ALEC. Heartland Institute, part of the consortium of ultra-conservative think tanks leading a broad attack on clean energy, will also speak at ALEC’s meeting. Americans For Prosperity, funded by money from the Koch brothers, is also involved in Big Oil’s PR campaign against clean energy.

We have already seen oil dominating election ad spending this year, with well over $24 million spent by groups like Americans for Prosperity and American Energy Alliance since January. More than 80 percent of election year attack ads have focused on energy — all of them thoroughly debunked.

The watchdog group Common Cause published ALEC’s full member list, revealing four of the five major oil companies behind the group’s anti-environment legislation. These four oil companies — Shell, BP, Chevron, and ExxonMobil — are also the four most profitable, taking a combined $30.6 billion profits in just three months this year.

Koch Industries, ubiquitous in funding right-wing causes, is also one of ALEC’s corporate members, while ConocoPhillips has its own history of funding the group.

ALEC’s agenda includes crafting legislation that kills carbon pricing and renewable energy targets, turns over public lands, and prevents fracking disclosure laws, among other harmful laws.

The latest chapter of Big Oil shaping local and state laws occurs later this week, where state legislators from 15 oil and gas states will meet with oil and gas companies presenting a fossil-fueled vision for the future.

Perhaps you recall Milo Minderbinder, the ambitious World War II mess hall officer from Catch-22. An avatar of capitalist ambition, Minderbinder expands his modest operation into a full-fledged multinational corporation.

It starts innocently enough — Minderbinder starts buying eggs from Sicily, then arranges a series of increasingly ludicrous deals to turn a profit. The absurd logic of untrammeled capitalism soon drives him to outrageous action, including accepting money from the Germans to bomb his own platoon. He justifies his behavior by pointing out that, as everyone in the troop is an investor — “everybody has a share,” as his catchphrase has it — they are in fact profiting from their own demise.

In Steve Coll’s new book Private Empire, a history of ExxonMobil in the years since the March 24, 1989, Valdez spill in Alaska, CEO Lee Raymond doesn’t quite reach Minderbinderian levels of amorality, but he gets mighty close. His company pays the torture-happy Singaporean military to protect its oil fields from rebel forces. He hires a team of scientists to browbeat researchers attempting to assess the damage from Valdez. He publicly dismisses the very notion of climate change, even as his company explores how global warming might offer new opportunities for oil exploration and profit. “Don’t believe for a minute that ExxonMobil doesn’t think climate change is real,” Coll quotes a manager as saying.

Coll conducted hundreds of interviews to compile this exhaustive — sometimes exhausting — history of one of the world’s most secretive companies. In piercing Exxon’s crude-black veil, Coll is doing more than describing the inner operations of a successful multinational. He is investigating an organization that, in size and influence, may as well be its own nation with its own sovereign interests — a “corporate state within the American state,” as Coll puts it. In capturing the mind-boggling scope of Exxon’s activity, Coll also offers crash courses in the finer points of oil exploration, the bizarre and brutal history of Equatorial Guinea, the rise of piracy in Nigeria, the eco-guerilla movement, resource management in post-Soviet Russia, the finer points of campaign-finance law, the apportionment of oil field contracts in post-war Iraq, and the battle for Acehnese independence. (NB: This is a much-abridged list.)

It is to Coll’s credit that Raymond never comes across as a moustache-twirling supervillain. He is merely the master of a proudly cloistered society, one that values loyalty and rule-following over free thinking and flexibility. That kind of rigorous mindset is probably necessary to oversee a business as complicated and sprawling as Exxon. Routinely one of the most profitable companies in the U.S. — its quarterly earnings topped $10 billion last year — Exxon’s tradition of consistent financial performance belies the chaos inherent in practically every level of its operations. Like all oil concerns, Exxon is on a constant hunt for “reserve replacement” — finding enough new oil to make up for the huge amount that the company extracts every year — a requirement that has led Exxon into ever more far-flung (and unstable) parts of the world.

At the same time, the size of its balance sheet means that even modest legislative adjustments — a small tax increase, for instance — could result in billions in losses. Factor in the occasional class-action suit, oil leak, or executive kidnapping, and even the least sympathetic reader can have some appreciation for Raymond’s rigid, top-down culture. “[U]nless Raymond used his bully pulpit … to pound hard and even intimidate his employees,” Coll writes, “the natural drift and compromising tendencies of such a large workforce would produce mediocre results.”

Raymond takes a similarly uncompromising attitude toward his many critics. Alternative-energy proponents are dismissed as soft-headed idealists. SEC regulations that conflict with Exxon’s own accounting practices are glibly disregarded in its public statements. Human-rights compacts are refused, not because Exxon doesn’t agree with the ideals behind them but because, in the words of one executive, “We don’t sign on to other people’s principles.” Raymond, in other words, was well suited for the early 21st century Age of American Imperiousness, an attitude best personified by his close friend, Dick Cheney.

And woe to scientists who reach conclusions that Exxon finds distasteful. Government researchers studying how much oil still lurked beneath the beaches of Prince William Sound 12 years after the Valdez spill dug 7,000 holes on 91 beach segments — all while being trailed by Exxon-funded scientists on cruise ships and helicopters, who mapped their movements and double-checked their work. When the government’s team leader, Jeffrey Short, published his findings, Exxon rushed out a response, all but accusing the researchers of fraud. “We saw no evidence that Short dug 7,000 pits,” the paper stated. “Had thousands been dug, we would have located many more.” Exxon filed dozens of Freedom of Information Act requests, burying the scientists in paperwork, and representatives showed up at every public presentation to attack their work. Eventually, Short retired from his government post, in part because he was fed up with the harassment.

About halfway through Coll’s treatise, he loses his main character. In 2006, Raymond steps down. His replacement, Rex Tillerson, is chosen in part as a softer corrective to Raymond’s alienating ways. Coll unearths some great details from Tillerson’s reign, none more heartbreaking than the story of Tillerson’s ill-fated flirtation with support for a carbon tax. Tillerson ordered a review of the company’s climate strategy when he took the helm, which concluded that some form of carbon price hike was likely inevitable, and that a predictable tax was preferable to the gyrations and bureaucracy of a cap-and-trade system. Despite Exxon’s aggressive lobbying campaign, politicians pursued a cap-and-trade policy, which died in the Senate.

Still, without Raymond’s single-minded drive as an anchor for the story, Coll’s narrative falls prey to some of the same aimlessness and drift that Raymond feared would befall Exxon without his authoritarian touch. Regardless, the book concludes with a satisfying — if depressing — geometry. Coll begins his tale with an account of the Valdez spill, an event that the author credits for inspiring Exxon’s fierce discipline, giving the company “a sense that Exxon’s leaders might need to find new ways to exert greater control over the world in which they operated.” In the intervening years, Exxon succeeds remarkably at this goal, influencing US foreign policy, environmental regulations, and tax policy, all while negotiating successfully with an assortment of tin-pot dictators and executing the multibillion dollar purchases of Mobil and XTO.

And yet, at the book’s final chapter — an account of the Deepwater Horizon disaster, for which Exxon shared cleanup responsibilities — the company is no better prepared than it was for the Valdez spill. “When these things happen,” Tillerson admits before a congressional committee, “we are not well equipped to deal with them.” It’s hard to imagine the ever-arrogant Exxon making a similar confession about any other aspect of its business. Then again, it doesn’t seem to have mattered much. In the two years since Tillerson made that statement, Exxon’s stock has jumped 39 percent. And one way or another, everybody has a share.

Jason Tanz is the New York editor at Wired, where he heads up the magazine’s business coverage. This piece was originally published at OnEarth and was re-printed with permission.

Related Post:

• ExxonMobil gave $1.5M to climate disinformation groups last year, breaking its pledge to stop funding denial machine

Together the big five oil companies—BP, Chevron, ConocoPhillips, ExxonMobil, and Shell—earned a combined $33.5 billion, or $368 million per day, during the first quarter of 2012.

Recall that these companies made a combined record profit of $137 billion in 2011, mostly due to high oil and gasoline prices. Their ongoing huge earnings mean that these companies do not need $24 billion for a decade’s worth of tax breaks, particularly since the three American companies pay relatively low effective federal tax rates.

Profits for Chevron continued to grow during the first quarter of 2012 compared to this time last year, while they fell slightly for Shell and ConocoPhillips. ExxonMobil and BP saw a decline in first-quarter profits mainly due to reduced oil production (both) and very low natural gas prices (Exxon).

Cumulatively, profits were 7 percent lower than the first quarter of 2011. And more than one-quarter of these profits were used to repurchase companies’ stock. Meanwhile, CEO compensation grew by a whopping average of 55 percent.

Below we dig a little deeper into the big five’s latest earnings—including how they spent them—and explain why companies this profitable should not be receiving billions in tax breaks especially when this money could be spent on other national priorities.

High oil and gas prices boost Big Oil’s bottom line

High oil and gas prices greatly contributed to the big five’s first-quarter earnings. The most important contributor to high gasoline prices is high oil prices. The Energy Information Administration estimates that the cost of crude oil was two-thirds of the cost of a gallon of gas in March 2012.

During the first quarter of 2012 the average gasoline price rose by 63 cents per gallon, or 19 percent, according to the Energy Information Agency. West Texas Intermediate crude oil prices peaked at $109 per on February 24, but eventually declined to $103 per on March 30 —the same as on January 3. Higher oil prices helped boost gasoline prices, as did closed refineries and other factors.

Also during the first quarter the Brent crude oil price in Europe grew by $12 per barrel, an 11 percent increase. The Brent price peaked at $128 per barrel on March 13 before closing at $123 on March 30. The uncertainty about a Persian Gulf oil supply disruption due to the confrontation with Iran contributed to the higher Brent price. High Brent prices affect Americans on the East Coast because this oil is imported and refined into gasoline there.

Balance sheets most companies would envy

While some of the big five companies saw declines in earnings compared to last year, all of the companies did very well in the first quarter and are still well in the black.

Chevron made 5 percent more in first-quarter earnings compared to 2011 even though its oil production dropped by nearly 5 percent compared to 2011. Chevron spent $1.3 billion repurchasing its stock, which was nearly 20 percent of its first-quarter profits. This practice enriches shareholders but it doesn’t add to oil supplies or investments in alternative fuels or other new technologies that would benefit drivers by providing substitutes for gasoline.

Chevron paid a 19 percent effective federal tax rate in 2011, much lower than the U.S. statutory corporate rate of 35 percent. Its CEO John Watson received $25 million in compensation last year, a 53 percent raise.

Shell’s earnings dropped by 1 percent. It was the only one of the big five oil companies to produce as much oil during this quarter compared to one year ago. Shell CEO Peter Voser’s compensation more than doubled in 2011 compared to 2010.

ConocoPhillips’s first-quarter 2012 profit was $100 million—or 3 percent—less than in 2011, which came to $2.9 billion. Reuters reports this is due to “weak refining margins” and decreased output after a spill in China. The company spent 66 percent of its first-quarter profits—or $1.9 billion—buying back its own stock.

Conoco also spent $20.6 million on lobbying Congress in 2011, making it the sixth-largest overall spender in 2011 and the top lobbying oil and gas company. Conoco paid an 18 percent effective federal tax rate in 2011, and outgoing CEO James Mulva received a $27.7 million salary, a 55 percent jump in 2011.

ExxonMobil’s first-quarter profits declined by 11 percent compared to 2011. But it still made a whopping $9.5 billion, an average of nearly $104 million per day from January 1 to March 31, 2012. This is a balance sheet that most companies would envy. The New York Times notes that:

The company said that production of oil and oil equivalents decreased by more than 5 percent compared with the first quarter of 2011, although revenue rose because of higher oil prices.

Exxon spent $5.7 billion of these profits—or 60 percent—buying back its stock. The company paid a 13 percent effective federal tax rate in 2011, the lowest among the three largest domestic oil companies. Exxon CEO Rex Tillerson’s 2011 salary was $34.9 million, a 20 percent raise from 2010.

Further, Exxon and its employees have already donated more than $1 million to federal candidates in the 2011-12 election cycle, making it the largest campaign funder in the oil industry. Republicans received 91 percent of these contributions.

BP reported a 19 percent decline in first quarter profits compared to one year ago. Its production of oil was 14 percent lower than 2011. Bloomberg reported that this decline occurred because the Gulf of Mexico blowout in 2010 forced the company to “sell assets to raise cash…asset sales lowered production and refining weakened.” Despite the drop in profits, BP CEO Robert Dudley received a 300 percent salary increase to $6.8 million. This was the largest salary change among the big five CEOs.

These companies clearly don’t need $24 billion in tax breaks

Amid their very remunerative first quarter, these extremely profitable companies continue to pressure Congress to maintain their cherished tax breaks. ExxonMobil and the American Petroleum Institute—Big Oil’s trade association loaded with well-heeled lobbyists—fervently opposed and helped defeat a bill to reduce Big Oil tax breaks despite earning another $33.5 billion in profits during the first quarter. They succeeded by convincing enough senators to vote against the bill to remove their tax breaks that the Senate was unable to muster a supermajority of 60 votes required for passage.

On March 29 the Senate voted down the Repeal Big Oil Subsidies Act, S. 2204, sponsored by Sen. Robert Menendez (D-NJ). It would have eliminated $24 billion in tax breaks over the coming decade for the big five companies while investing in clean energy technologies. This included an extension of the production tax credit for wind energy, which would save 37,000 jobs. The bill received a majority of votes, 51 to 47, but this was nine short of the votes required for passage.

These Big Oil subsidies, combined with a low effective federal tax rate, simply shift the tax burden on to the middle class. Martin A. Sullivan, a former Treasury Department economist, observes that “when America’s most profitable companies pay less, the general public has to pay more.”

The big five oil companies continue to be spectacularly profitable, as their first-quarter 2012 earnings demonstrate. They earned $100 for every man, woman, and child in the United States. But instead of asking these companies to relinquish their billions of dollars in tax breaks, the House Republican leadership proposes to cut investments in women’s health programs to avoid the doubling of student loan interest rates.

This spending unfairness is the Big Oil equivalent of Warren Buffet’s secretary paying a higher tax rate than he does. Congress must enact a “big oil fair share” rule so that the companies that made a combined $33.5 billion in profits in just three months no longer receive billions of dollars of tax breaks, too. This money could definitely be put to better use to assist every day Americans instead of further enriching gigantic oil companies.

Daniel J. Weiss is a Senior Fellow and Director of Climate Strategy and Rebecca Leber is a Research Assistant for Think Progress at the Center for American Progress. This piece was originally published at the Center for American Progress.

Thanks to Noreen Nielsen, Energy Communications Director, Center for American Progress, Richard Caperton, Director of Clean Energy Investment, and Jackie Weidman, Special Assistant for the Energy Team.

by Kiley Kroh and Rebecca Leber

Two years after the Deepwater Horizon disaster, BP is reporting profits of $5.9 billion for the first quarter of 2012.

That’s an 18.5 percent dip compared to the first quarter of last year; however, it’s a major reversal from 2010. After claiming a loss that year, BP quickly rebounded in 2011, recording a profit of $25.7 billion.

Even as the company sells off assets to pay billions in damages for the 2010 disaster, it is already pursuing drilling plans again in the Gulf of Mexico:

• Criminal charges were recently filed against former BP engineer Kurt Mix for allegedly intentionally destroying evidence and potentially misleading the public and the U.S. government about the amount of oil spewing into the Gulf of Mexico.  While the oil giant has agreed to pay an estimated $7.8 billion in plaintiffs’ claims, environmental damages from the spill remain unresolved.  Because fines are assessed on a per barrel basis, a cover-up could have major implications for assessing the company’s ultimate liability.
• Following the unprecedented disaster, BP took losses related to the clean-up for tax purposes, reducing its tax bill by $13 billion. As a result, the company paid no federal income taxes in 2010.  Gulf Coast residents who suffered major losses as a result of the spill, on the other hand, found out their compensatory payments from BP would be taxed.
• Even though BP’s slick new ads show sparkling beaches and flourishing marshes, the perception that everything is fine in the Gulf is far from the truth. Last week Garret Graves, top coastal adviser to Louisiana Gov. Bobby Jindal, said the state “still has 200 miles of oiled coast,” including “very clear, retrievable oil in coastal areas,” and called the current conditions “unacceptable.”
• An in-depth Al Jazeera investigation found ominous signs of the impact the spill may be having on the region and a frightening snapshot of what may lie ahead for Gulf fisheries: eyeless shrimp, crabs without claws, and fish with open lesions. Keath Ladner, a third-generation seafood processor in Hancock County, Mississippi, observed, “We’ve fished here all our lives and have never seen anything like this.”
• While long-term damage estimates vary, a new study published in the Canadian Journal of Fisheries and Aquatic Sciences determined that over seven years, the oil spill could have an $8.7 billion impact on the economy of the Gulf of Mexico, including losses in revenue, profit, wages, and close to 22,000 jobs.
• The only oil removed for certain was the amount directly recovered from the wellhead— about 17 percent of the total oil spilled. According to Markus Huettel, a benthic ecologist at Florida State University, “a staggering amount – he suggests 60 percent is a conservative estimate – remains unaccounted for.”
• The “State of the Beach” report, released last week by the Surfrider Foundation, found that the mixture of toxic dispersants and crude oil has now weathered into tar product. The “unholy mix” is allowing potentially carcinogenic concentrations of organic pollutants to remain in the environment, and is absorbed by wet skin twice as fast as by dry skin.
• Another alarming and under-reported fallout from the spill is the human health crisis currently being experienced throughout the Gulf Coast.  As reported in The Nation, cleanup workers and their families are experiencing a wide range of symptoms from respiratory infections to rashes, seizures, vomiting, and bleeding. The Government Accountability Project, which will release the results of its 11-month investigation of the public health threats associated with the cleanup this summer, found cleanup workers reported being threatened with termination when they asked for respirators because it would “look bad in media coverage.”  BP’s proposed $7.8 billion settlement will cover some health problems but excludes other conditions such as cancer, mental health disorders, or birth defects.

by Michael Conathan

The Weather Channel’s reality series “Coast Guard Alaska” gives viewers an exhilarating taste of what life is like for coasties stationed in the distant reaches of our 49^th state, conducting search-and-rescue and fishery enforcement missions in some of the harshest weather conditions known to man.

But starting this summer, the U.S. Coast Guard will have a new purpose in Alaska: babysitting. And you and I will be paying for it.

At a time when budget restrictions have forced belt-tightening across the Coast Guard’s suite of missions, it is making a major commitment of taxpayer dollars and limited assets to monitor Royal Dutch Shell’s Arctic Ocean oil and gas drilling.

The Coast Guard is already stretching is dollars to try to overhaul its fleet of cutters — most of which were built in the 1960s — while continuing to keep our waterways and mariners safe. Under the proposed budget for fiscal year 2013, it already faces funding cuts that even budget hawk Rep. Robert B. Aderholt (R-AL) called “challenging for us to accept” because they “bluntly [gut] operational capabilities.”

Yet the Coast Guard plans to deploy key resources to the Arctic this summer exclusively for Shell’s plans to begin exploratory oil drilling in the Beaufort and Chukchi Seas — activities the insurance giant Lloyd’s of London called out for posing a “unique and hard-to-manage risk.”

The Coast Guard will send up one of the service’s three new National Security Cutters, a sea-going buoy tender, and two helicopters from the closest Coast Guard station in Kodiak, AK — over 1,000 miles away.

Taxpayers won’t just be paying the financial price. Because the service has a finite number of ships, aircraft, and personnel, we will also sacrifice part of the Coast Guard’s ability to carry out other missions, including homeland security, migrant and narcotics interdiction, fisheries enforcement, and search-and-rescue operations.

At a July 2011 Senate hearing on Arctic drilling, Coast Guard Commandant Robert Papp seemed to question his service’s capacity to respond to a potential spill in the Arctic, saying “if [a spill] were to happen off the North Slope of Alaska, we’d have nothing.  We’re starting from ground zero today.” He elaborated on those comments at a December hearing, saying his “most immediate operational need is infrastructure.”

On April 16, Papp confirmed that the Arctic deployment, “will come at the expense” of other missions:

Most likely we’ll draw down drug interdiction missions to send a national security cutter up there. Or more fisheries are left unprotected, or something else out there…. Right now we’re keeping a pretty good balance [of missions], but it’s going to be a challenge going forward. We’ve got certain things we’re just not going to be able to do.

One can’t help but wonder how that will play out when a fishing boat runs into trouble a hundred miles off the Aleutian Islands this summer and the helicopter needed to rescue those fishermen is a thousand miles away.

Or when another semi-submersible loaded with cocaine slips through an increasingly perforated dragnet in the southern Pacific that could have been tightened by the presence of a state-of-the-art National Security Cutter.

Certainly, the Coast Guard must have a presence in the Arctic while Shell’s drilling operations are moving ahead. Given the lack of infrastructure detailed in the Center for American Progress report, Putting a Freeze on Arctic Ocean Drilling: America’s Inability to Respond to an Oil Spill in the Arctic, it’s clear that greater investment must be made in developing the capacity to handle a potential worst-case scenario before drilling commences.

But this year, the sole purpose of Coast Guard operations in the region is to monitor Shell’s activity, thus taking away from other important activities. While Adm. Papp speaks to the need for his service to grow its Arctic capabilities, the inherently multi-mission Coast Guard will have a single mission to undertake in the Arctic: babysitting Shell.

Asking American citizens to sacrifice their tax dollars and compromise vital Coast Guard operations in service to Shell’s unacceptably risky Arctic drilling amounts to nothing more than just another Big Oil subsidy.

Michael Conathan is the Director of Ocean Policy at the Center for American Progress.

This is down slightly from the first quarter of 2011, when Exxon posted $10.65 billion in profits. Exxon benefited from the high price of oil, but analysts expected slightly lower profits due in part to the cheap price of natural gas, which the company is heavily invested in.

A by-the-numbers look shows how Exxon’s executives and Big Oil’s allies are rewarded generously for the company’s billions, while Americans are stuck with rising gas bills:

$9.45 billion profits, or almost $104 million per day in the first three months of the year.

13 percent: The tax rate Exxon paid last year, lower than the average American family.

60 percent of its first quarter earnings, or $5.7 billion, on buying back stock. Became world’s largest dividend payer by increasing dividends 21 percent.

$1,091,000: Political contributions sent to federal politicians for the 2012 election cycle, making it the largest oil and gas spender.

91% of these contributions went to Republicans.

More than $52,000,000: Lobbying for the first three years of the Obama presidency, 50 percent more than in the Bush Administration.

$34.9 million: Exxon CEO Rex Tillerson’s salary for 2011, a 20 percent raise.

$52,300: Political contributions from Exxon CEO Rex Tillerson in the 2012 cycle, alone.

No. 2: Fortune 500 list of richest companies and for highest-paid CEO.

Exxon not only used 60 percent of its Q1 profits to buy back its stocks, enriching executives and largest shareholders, but it funnels money through political groups like American Legislative Exchange Council (ALEC) and American Petroleum Institute, to influence legislation in its favor.

Though Romney has not voluntarily disclosed any campaign bundlers who are not lobbyists, federal law requires that he identify major bundlers who are. To date, the campaign has identified 22 lobbyist bundlers who each raised $17,000 or more.

A ThinkProgress analysis of the data shows that 13 represent Big Energy and Big Finance — and between them, they collected more than $2.2 million in donations. They are:

• Patrick Durkin Sr. ($927,160), a lobbyist for British banking giant Barclays.
• Wayne Berman ($424,825), a lobbyist for Ogilvy Government Relations. His polluter clients include Chevron, Hess, and Kosmos Energy and his finance clients include Visa, Marwood Group, and The Travelers Companies.
• T. Martin Fioerentino Jr. ($325,045), a lobbyist for The Fiorentino Group. He represents Lender Processing Services, a prominent mortgage and consumer loan processing company.
• Austin Barbour ($210,700), a recent Romney campaign hire who, in 2011, worked as a lobbyist for Capitol Resources LLC. His clients included polluter Gulf LNG Energy. Barbour is the nephew of former Gov. Haley Barbour (R-MS).
• Paul Mattera ($64,200), a lobbyist for Liberty Mutual Insurance.
• Drew Maloney ($56,750), a lobbyist for Ogilvy Government Relations. His polluter clients include GenOn Energy, Exelon Business Services, and Sempra Energy and he represents National Bank of Canada.
• Joseph Wall ($47,437), a lobbyist for Wall Street behemoth Goldman Sachs.
• David Tamasi ($39,785), a lobbyist for Rasky Baerlein Strategic Communication. His polluter clients include GDF Suez and his financial clients include Next Street Financial and the National Reverse Mortgage Lenders Association.
• Michael McSherry ($30,200), a lobbyist for Mercury Public Affairs. He represents Peabody Energy and Stifel Financial Corp.
• Kent Burton ($26,510), a lobbyist for National Environmental Strategies. His polluter clients include Murray Energy, Marathon Oil, Pacific Gas & Electric, and, as of recently, Shell Oil.
• Tom Boyd ($26,350), a lobbyist for DLA Piper. His financial sector clients include Experian Group, Charles Schwab & Co., and Discover Financial Services.
• Andrew Wheeler ($17,000), a lobbyist for Faegre Baker Daniels. His polluter clients include Murray Energy.
• Mark Isakowitz ($17,000), a lobbyist for Fierce, Isakowitz & Blalock. His polluter clients include Noble Energy and BP America and his many finance clients include Hartford Financial Services Group, JPMorgan Chase, the Managed Funds Association, Mutual of Omaha, and Zurich Financial.

Romney’s strong support from powerful Wall Street and energy lobbyists is unsurprising given his proposals to repeal the Wall Street Reform and Consumer Protection Act and undo environmental protections — and his support for continuing subsidies for Big Oil.

As ThinkProgress previously reported, Romney’s lobbyist-bundler list also includes Ignacio E. Sanchez ($86,700) of DLA Piper, a registered foreign agent for the United Arab Emirates and a birther presidential candidate in the Dominican Republic.

President Obama does not accept campaign contributions donated or bundled by federal lobbyists or foreign agents. His campaign voluntarily discloses all of its major bundlers. He also voluntarily discloses all of his major bundlers, as did Sen. John McCain (R-AZ) and President George W. Bush (R) in their 2000, 2004, and 2008 races.

Beginning May 1, 2012, the oil giant is splitting into two companies, and it has sold billions in assets over the past few years.  As Conoco prepares for a major overhaul, it continues to finance the campaigns of mostly-Republican politicians, helping ensure billions in tax breaks.

Here are the major takeaways from Conoco’s profits:

Conoco made a $2.9 billion profit this quarter, compared to $3 billion it made Q1 in 2011. Reuters reports this is due to decreased output after a spill in China and the company selling off assets for the upcoming split.

Conoco paid an 18 percent effective federal tax rate in 2011, and an average 27 percent between 2008-2010.

The company spent 66 percent of its Q1 profits — or $1.9 billion — buying back its own stock, which enriches the largest shareholders and executives.

Conoco is sitting on $3.7 billion in cash reserves.

Conoco spent $20,557,043 on lobbying in 2011, making it the sixth-largest overall spender in 2011 and the top oil and gas company.

The company has donated over $300,000 to federal candidates for the 2012 cycle, 91 percent going to Republicans. Its PAC has spent $60,000 since January. Recipients include Sen. Scott Brown (R-MA), Sen. John Barasso (R-WY), Rep. Eric Cantor (R-VA), Rep. Doc Hastings (R-WA), Rep. Darrell Issa (R-CA), and Rep. Fred Upton (R-MI).

The outgoing CEO James Mulva received a $27.7 million salary, a 55 percent jump in 2011.  Mulva has contributed at least $20,000 to the National Republican Senatorial Committee, and to Minority Leader Mitch (R-KY) McConnell and Senate Finance Ranking Member Orrin Hatch (R-UT).

Conoco uses its billions in profits to protect its tax breaks and finance policies benefiting the oil industry, primarily aimed at Republican players.  Conoco and its CEO — who received an $8.5 million raise — are doing quite well, even as Americans struggle to pay higher gas costs.

ExxonMobil and Shell are the next companies to report their profits this Thursday.

In another stark warning about the dangers of Arctic Ocean drilling, the German bank WestLB announced on Friday that it would not provide financing to any offshore oil or gas drilling in the region. The company’s sustainability manager said the “risks and costs are simply too high.”

The decision was made just a week after insurance giant Lloyd’s of London issued a report concluding that offshore drilling in the Arctic would “constitute a unique and hard-to-manage risk” and urged companies to “think carefully about the consequences of action” before exploring for oil in the region.

Dustin Neuneyer, sustainability manager at the corporate and investment bank WestLB, explained the decision to Environmental Finance:

“The further you get into the icy regions, the more expensive everything gets and there are risks that are hard to manage.… There are projects that are evidently unsustainable in an encompassing sense. For WestLB, the risks and costs are simply too high.”

The bank’s new eight-point policy on offshore drilling lays out specific criteria for the projects and companies that are eligible for financing — excluding any exploration or production activities in areas where the average temperature for the warmest month is below 10°C (50° F).  Additionally, the policy’s criteria — which are binding for any company seeking a loan — require companies to use the best available technology, abide by the highest technical safety standards, and show that activities are validated by an independent third party.

The concerns raised by Lloyd’s of London and WestLB come as Royal Dutch Shell prepares to drill in Arctic waters off the coast of Alaska this summer. The recommendations of these institutions echo those in the recent Center for American Progress report, Putting a Freeze on Arctic Ocean Drilling: America’s Inability to Respond to an Oil Spill in the Arctic.

The dearth of supporting infrastructure throughout Alaska’s North Slope — including ports, roads, railroads, and permanent Coast Guard facilities — coupled with the lack of sound science and extremely volatile conditions make any potential offshore operations precarious at best.  The remote location, harsh and unpredictable conditions, and absence of proven clean-up technologies designed for Arctic conditions would make large-scale response efforts nearly impossible.

Those factors represent a cost and risk WestLB isn’t willing to shoulder.

The stakes are high for Royal Dutch Shell, which after spending nearly five years and $4 billion, will likely soon receive the necessary permits for exploratory drilling in the remote Beaufort and Chukchi Seas. And other oil giants aren’t far behind — Exxon and ConocoPhillips are aiming to start offshore operations in the pristine Arctic Ocean by 2013.

WestLB might be the first bank to explicitly refuse financing for offshore drilling in the Arctic, but they may not be alone for long. “Other banks contacted us and are very interested in this approach and policy,” Neuneyer told Environmental Finance.

How many influential corporate voices will have to raise concerns before someone hits the pause button on Arctic Ocean drilling?

Kiley Kroh is the Associate Director of Ocean Communications at the Center for American Progress.

by Kiley Kroh and Michael Conathan

Two years ago an explosion aboard the Deepwater Horizon rig in the Gulf of Mexico took the lives of 11 men and spewed nearly 5 million barrels of oil into the Gulf. It took 9,700 vessels, 127 aircraft, 47,829 people, nearly 2 million gallons of toxic dispersants, and 89 days to stop the gush of oil. But the work to restore the ecosystem and Gulf economy has only just begun.

The regional oil and gas industry hasn’t skipped a beat despite claims from Big Oil and drilling advocates in Congress that the moratorium on deepwater drilling imposed in the wake of the spill devastated the Gulf economy. The New Orleans Times-Picayune found that oil-fueled economies in the Houma area are humming along just fine. And according to a recent Reuters analysis, Gulf drillers will be busier this year than at any point since the spill, adding eight new deepwater rigs and bringing the total count to 29, just shy of pre-spill levels.

But even though BP’s slick new ads show sparkling beaches and flourishing marshes, the perception that everything is fine in the Gulf is far from the truth. Last week Garret Graves, top coastal advisor to Louisiana Gov. Bobby Jindal, said the state “still has 200 miles of oiled coast,” including “very clear, retrievable oil in coastal areas,” and called the current conditions “unacceptable.”

While the Obama administration took steps to strengthen offshore drilling safety and oversight, much remains to be done. Tourism in the region has rebounded this year but the Gulf Coast is still struggling with the lingering effects of the spill and will likely continue to do so for decades to come. Here are five reasons the Gulf deserves renewed attention:

Congress’s failure to act

Two years ago the United States spent 89 days battling the single-biggest offshore oil spill in our nation’s history. But Congress hasn’t enacted a single piece of legislation in response. Ample proposals were put forward to restore the Gulf, reinforce offshore drilling safety standards, and raise the liability limit for oil companies in violation of drilling safety rules, which is currently at an outrageously low $75 million.

Congress must act to raise the liability cap, which could serve as a deterrent to companies that may be guilty of the same “failure of supervision and accountability” that led to the Deepwater Horizon tragedy. As a recent editorial in the Tampa Bay Times explains, “while BP waived its limits under the current $75 million cap in fines for an offshore spill, a company with smaller pockets might not have the same wherewithal or self-interest to act similarly to repair the company brand.”

Additionally, it must enact the bipartisan RESTORE Act, which would dedicate 80 percent of Clean Water Act fines to be paid by BP and parties responsible for the spill directly to Gulf Coast states for economic and environmental recovery. It passed out of both the House and Senate separately, but they have yet to come to an agreement on a final version.

The bill would address many of the problems facing the region by catalyzing immediate restoration efforts, as well as provide the necessary funding to study the long-term effects of the spill on both the environment and public health.

Fisheries

The Gulf of Mexico is one of the nation’s most productive fishing grounds, providing one-third of all seafood consumed in the United States prior to the spill. But in 2010, at peak response to the oil spill, about 40 percent of Gulf waters were closed to all commercial and recreational fishing—a huge blow to area fishermen, many of whom have yet to rebound. Louisiana oysterman Terrence Shelley recently told Bloomberg that total losses from the 18,000 acres of oyster reefs his family owns could reach $20 million by 2017, the year their oyster leases are projected to fully recover.

And while long-term damage estimates vary, a new study published in the Canadian Journal of Fisheries and Aquatic Sciences determined that over seven years, the oil spill could have a $8.7 billion impact on the economy of the Gulf of Mexico including losses in revenue, profit, wages, and close to 22,000 jobs.

Ultimately, no one really knows what the long-term impacts could be. Following the 1989 Exxon Valdez oil spill, for instance, the region’s productive herring fishery suddenly collapsed four years after the spill occurred, and it has yet to recover. Many signs point to Exxon’s oil as a cause of that delayed reaction.

An in-depth Al Jazeera investigation found ominous signs of the impact the spill may be having on the region and a frightening snapshot of what may lie ahead for Gulf fisheries: eyeless shrimp, crabs without claws, and fish with open lesions. Keath Ladner, a third-generation seafood processor in Hancock County, Mississippi, observed, “We’ve fished here all our lives and have never seen anything like this.”

Beaches

Throughout the spill, BP cleanup crews worked furiously to ensure the majority of oil remained off of area beaches and out of the public eye. Yet the only oil we know was removed for certain was the amount directly recovered from the wellhead—17 percent of the total oil spilled. According to Markus Huettel, a benthic ecologist at Florida State University, “a staggering amount – he suggests 60 percent is a conservative estimate – remains unaccounted for.”

While the ultimate environmental and human health effects of the oil still emerging from the beaches and wetlands to this day is unknown, Auburn researchers found Deepwater Horizon tar balls contained 10 times more of the bacteria Vibrio vulnificus, the leading cause of death from seafood contamination, than the surrounding sand and up to 100 times more than nearby seawater.

Another alarming discovery came in the “State of the Beach” report released this week by the Surfrider Foundation, which found that the mixture of toxic dispersants and crude oil has now weathered into tar product. The “unholy mix” is allowing potentially carcinogenic concentrations of organic pollutants to remain in the environment, and is absorbed by wet skin twice as fast as by dry skin.

Wetlands

Louisiana was home to 40 percent of the continental United States’ wetlands but experienced about 80 percent of all wetlands loss from the 1950s through the middle of the last decade. Wetland loss destroys habitats and removes natural flood protection and environmental services from coastal communities.

The BP oil spill shocked the Gulf Coast’s already compromised ecosystem, which will continue to degrade until comprehensive coastal restoration is undertaken. A new report from the National Wildlife Federation determined that 3,000 miles of beaches and wetlands along the Gulf Coast were contaminated by oil and that “oil contamination or efforts to clean it up can damage wetlands, killing vegetation and thereby causing accelerated erosion and conversion of land to open water.”

Restoration is an economic imperative as well. As detailed in the joint CAP-Oxfam report “Beyond Recovery,” large-scale investment in coastal restoration could be a tremendous source of employment for the struggling region, spurring the growth of new industries and creating nearly six times as many jobs as investments in traditional economic drivers such as oil and gas.

Deep-sea death and long-term implications

During the three-month spill, a staggering volume of oil spilled into the Gulf far beneath the surface. We are only beginning to understand the impact that will have on deep-sea health.

A study released last month by Charles Fisher of Penn State University and Helen White of Haverford College offers a clue. It determined the BP spill was “definitely linked” to “widespread signs of distress” and the slow death of deepwater coral within seven miles of the blowout site. The crew traveled nearly a mile below the surface, and one researcher said of the scene, “It was like a graveyard of corals.”

The long-term implications of widespread coral damage are extensive. Corals and other species at the furthest depths of the ocean often serve as barometers for overall ocean health and are critical components of the food chain.

Conclusion

Researchers throughout the Gulf Coast emphasize one critical point: It will be a long time before we know the full extent of the oil spill’s damage. That, however, does not mean comprehensive economic and environmental restoration should wait any longer. Recent distressing events, such as significant and unexplained dolphin mortality or the discovery of invasive species that could “wreak havoc” on the oyster industry, offer stark reminders that the environment and people of the Gulf continue to suffer and must be made whole again.

Kiley Kroh is the Associate Director of Ocean Communications at the Center for American Progress. Michael Conathan, Director of Ocean Policy, and Erin Gustafson, Energy and Environmental Policy intern, contributed. This piece was originally published at the Center for American Progress.

by Daniel J. Weiss and Jackie Weidman

Beginning on Monday April 23, and continuing through May 1, the five biggest oil companies – BP, Chevron, ConocoPhillips, ExxonMobil, and Shell – will release their first quarter profits for 2011.

Given record gasoline prices for this time of year, these profit figures are likely to be quite large.  How much money did they make from January through March, and how are they spending it?

In 2011, the Big Five made a combined record of $137 billion in profits.  These companies made $32 billion in the first quarter of last year alone, a 38 percent increase over the first quarter of 2010. High gasoline prices yield large profits: A CAP analysis found that every one cent in gasoline prices produces $200 million more in profits (on a quarterly basis).

In general, the oil industry spends 50 times more on oil exploration than on alternative energy investments. So how are the largest five oil companies spending their enormous profits? Five easy questions could give us some big answers:

1. How much are the big five reinvesting in themselves?

In the first quarter of 2011, the big five companies spent $8 billion on stock buybacks. ExxonMobil and ConocoPhillips spent 53 percent of their profits on these purchases, which enriches their boards, senior executives, and largest shareholders.

2. How big are the cash reserves of the big five companies?

At the end of 2011 these companies had a combined $58 billion in cash reserves, nearly 30 times more than they received in special tax breaks that they are furiously lobbying to retain.

3. How much do these companies spend on pressuring Congress?

In 2011, the big five companies spent $66 million on lobbying. ConocoPhillips spent over $20 million, followed by Shell’s nearly $15 million. ExxonMobil spent $13 million, Chevron spent $9.5 million and BP spent $8.4 million.

The American Petroleum Institute, the lobbying arm of the oil industry, spent $8.6 million on lobbying. API has also spent $4.3 million on energy attack ads since January, according to The Washington Post. API uses member companies’ funds to strong arm legislators into maintaining their tax breaks. In 2010, API spent $63 million, a third of its total budget, on ad campaigns. How much money are these five companies giving to API to provide lobbying muscle? How does that compare to their profits?

As Jack Gerard, President and CEO of API said himself: “if we’re concerned about a particular member [of Congress] we will educate that constituency.” Gerard is paid to do Big Oil’s dirty work, convincing Congress to uphold $40 billion in unnecessary tax breaks while chastising clean energy efforts.

4. Did the Big Five companies pay a higher federal effective tax rate in 2011 compared to the average American family?

Fortune magazine ranks ExxonMobil, Chevron and ConocoPhillips as the first-, third-, and 16^th-most profitable companies in the United States.

And yet, they don’t pay their fair share in taxes. According to a Reuters’ analysis, Exxon Mobil paid 13 percent of its U.S. income in taxes after deductions and benefits in 2011, while Chevron paid about 19 percent, and ConocoPhillips paid 18 percent. The Big Five hoard cash overseas in tax havens to cut their tax rates drastically. As Reuters put it, these tax rates “are a far cry from the 35 percent top corporate tax rate.”

To put things into perspective, the average American individual effect tax rate for 2007 was 20.4 percent.

5. How much money do oil companies invest in alternative fuels to reduce reliance on gasoline?

High gasoline prices devastate middle class budgets. The ultimate solution to pump price pain is to pump less. However, there are few easily affordable, accessible paths to promptly reduce gasoline use for many drivers.

The higher fuel economy standards set by the Obama administration has vehicles traveling further on a gallon of gas. “The average fuel economy of all new vehicles sold in the U.S. was 24.1 miles per gallon last month, a record high for the industry,” according to the Detroit Free Press on April 11. Many families, however, cannot afford to buy new cars when gasoline prices spike.

New models powered by electricity, such as the plug-in hybrid Chevrolet Volt and all electric Nissan Leaf, sold twice as many cars in their first year compared to the initial offering of Toyota Prius and Honda Insight hybrids, but only a limited number of families can buy these new models.

Many companies are developing bio and other advanced fuels that do not rely on petroleum as a key ingredient. Despite their ads that feature clean, renewable energy, Big Oil companies continue to heavily invest in more petroleum rather than alternatives – ensuring that we maintain our addiction to fossil fuels.

According to the Natural Resources Defense Council, the oil industry spends less than half a penny on renewable alternatives for every dollar it spends on producing more oil. Globally, the oil industry’s investments in finding and producing more oil amounted to $2.1 trillion, while companies spent just $4 billion on renewable fuels.

Daniel J. Weiss is a senior fellow at the Center for American Progress Action Fund. Jackie Weidman is a special assistant for energy at the Center for American Progress Action Fund.

by Dominique Browning, via Time Ideas

If you were watching the Masters golf tournament last weekend, you would have noticed it was laced with ads from Exxon Mobil calling for … better science. That’s right. The very company that funded decades of science denial takes it back. Sort of. ExxonMobil ranks high in a short list of powerful institutions that has done this country an enormous disservice in undermining the overall credibility of the scientific method in general, and climate scientists specifically.

They now realize, of course, that without scientifically sophisticated workers, our global standing slips backwards. The company plans to spend a small fortune on the ad campaign featuring the National Math and Science Initiative and is a founding sponsor of this effort to dramatically improve science education in the U.S.

I have a friend, Jackson Robinson, who runs a green investment company called Winslow Management. He regularly asks CEOs, what is keeping you awake at night? More than half the time, the answer has to do with the work force: how hard it is to find educated, skilled people to take their companies to the next level. The workforce issue has gotten so serious that Chicago, with 100,000 jobs that could not be filled in 2010, has had to launch a “college to careers” movement to train students. For the record, not one CEO has ever responded to Jack that he stays awake because of global warming. And I imagine one reason it isn’t top of mind: a disinformation campaign that has been raging for decades.

The ExxonMobil website explains that its ads are meant to alert people about “underperformance” of U.S. students, who rank internationally 25^th in math and 17^th in science. Considering that the company employs more than 18,000 people around the world, their success must depend on a capable workforce—“Its not just U.S. leadership in energy that’s at risk—it’s also our leadership in medicine, research, technology and other pillars of the American economy.”

No kidding. The ad campaign was slick, and smart on many levels, not the least of which is to position ExxonMobil as a science-friendly company. Which, undoubtedly, it is—so long as the science supports their agenda. Though ExxonMobil pledged to quit funding climate change deniers back in 2008, as recently as 2011 a Greenpeace Freedom of Information Act turned up evidence that the company was still at it, though ExxonMobil denies this.

I suppose we should be grateful for support to science and math from any quarter, these days—given what’s happening in places like Tennessee, where students will soon be learning that evolution is just one of those quirky ideas those radical science types throw out there to confuse people, since God made the universe not so long ago—and in a week, no less. Which is why we have weekends free to play golf.

Still, how about teeing up another campaign? ExxonMobil tells Americans that it was wrong to mislead people. That it was wrong to undermine credibility in the scientific method. That we have entered an era of manmade global warming, that it could lead to cascading catastrophe the likes of which we have never seen, that we are rolling the dice, way off the game board, in the risks we are taking in contributing further to greenhouse gas pollution—and that ExxonMobil is proud to announce that it is doing everything in its power to support the training of a new generation of scientists who will show us how we can adapt to this difficult new reality.

by Kiley Kroh and Michael Conathan

Analysts at one of the world’s largest insurance markets are warning that offshore drilling in the Arctic would “constitute a unique and hard-to-manage risk” and urged companies to “think carefully about the consequences of action” before exploring for oil in the region.

Lloyd’s of London, a large UK-based insurance pool, issued a report today outlining the severe environmental and economic risk of oil and gas drilling in Arctic waters. The stunning report comes as Royal Dutch Shell prepares for exploratory drilling operations in the Arctic – even while leading experts warn that there’s virtually no infrastructure in place to clean up an oil spill in the fragile region.

As Arctic ice continues to melt due to climate change, Lloyd’s estimates the region will attract $100 billion in new investment over the next decade. However, analysts warn that responding to an oil spill in a region “highly sensitive to damage” would present “multiple obstacles, which together constitute a unique and hard-to-manage risk.”

The environmental consequences of disasters in the Arctic have the potential to be worse than in other regions. The resilience of the Arctic’s ecosystems in terms of withstanding risk events is weak, and political sensitivity to a disaster is high. As a result, companies operating in the Arctic face significant reputational risk.

It’s easy for oil companies to dismiss environmentalists concerned about the Arctic as politically-motivated. But when a centuries-old company that has made billions of dollars judging risks and insuring everything from Betty Grable’s legs to the World Trade Center’s new Freedom Tower, thinks an operation might be a little too edgy for them, it ought to make oil companies stand up and take notice.

Richard Ward, Lloyd’s chief executive, “urged companies not to ‘rush in [but instead to] step back and think carefully about the consequences of that action’ before research was carried out and the right safety measures put in place.”

Lloyd’s report includes a laundry list of reasons why oil companies ought to hit the pause button on offshore Arctic drilling, including:

• Significant knowledge gaps across the Arctic need to be closed urgently
• Arctic conditions will remain challenging and often unpredictable
• The environmental consequences of disasters in the Arctic are likely to be worse than in other regions
• The politics of Arctic economic development are controversial and fluid.

Here in the U.S., Shell is on the brink of permits to begin drilling in the pristine Arctic Ocean this summer, despite the concerns of environmental groups, Alaska Native communities, and even federal agencies such as the US Coast Guard and NOAA.  Aside from the long-term climate risk, their chief concerns revolve around Shell’s ability to respond to an oil spill challenging region – which can be dark, frigid, extremely remote, and sorely lacks even the most basic infrastructure.

The challenges posed by these harsh and unpredictable conditions are outlined in the Center for American Progress report, Putting a Freeze on Arctic Ocean Drilling: America’s Inability to Respond to an Oil Spill in the Arctic.  As the two-year anniversary of the Deepwater Horizon tragedy approaches, it is critical to remember the plethora of personnel and resources needed to facilitate the largest, most coordinated oil spill response effort in our nation’s history. A similar undertaking would be impossible in the Arctic.

These warnings are echoed in the Lloyd’s report, as well as in a new independent federal report issued by the Government Accountability Office, which concluded that Shell’s “dedicated capabilities do not completely mitigate some of the environmental and logistical risks associated with the remoteness and environment of the region.”

As both the CAP report and Lloyd’s recommend, a substantial commitment to science and monitoring is necessary to “close knowledge gaps, reduce uncertainties and manage risks.”  In addition, “full-scale exercises based on worst-case scenarios of environmental disaster should be run by companies,” as well as a significant investment in infrastructure and monitoring to facilitate “safe economic activity.”

If the world’s largest insurance market is warning companies to slow down because we are unprepared for the enormous risks of Arctic exploration, then the U.S. ought to think carefully before we encourage drilling.

Kiley Kroh is Associate Director of Communications for Oceans Communications at the Center for American Progress. Michael Conathan is the Director of Ocean Policy at the Center for American Progress.