by Daniel J. Weiss and Rebecca Leber

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.

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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:

Deepwater Horizon disaster ruined Florida's shores.

On the heels of the second anniversary of the Deepwater Horizon disaster, federal prosecutors have issued the first arrest related to the worst oil disaster in U.S. history. The Justice Department has charged former BP engineer Kurt Mix with destroying evidence on BP’s internal response to the disaster.

Mix, who worked on estimating the amount of oil spilling into the Gulf, allegedly deleted hundreds of text messages with a BP supervisor. This includes one that read “Too much flowrate —- over 15,000,” barrels of oil per day, which was three-times higher than BP’s public estimate of barrels of oil per day at the time.

Attorney General Eric Holder issued the statement [emphasis added]:

“The department has filed initial charges in its investigation into the Deepwater Horizon disaster against an individual for allegedly deleting records relating to the amount of oil flowing from the Macondo well after the explosion that led to the devastating tragedy in the Gulf of Mexico,” said Attorney General Holder. “The Deepwater Horizon Task Force is continuing its investigation into the explosion and will hold accountable those who violated the law in connection with the largest environmental disaster in U.S. history.”

As the criminal investigations continue, Congress has still not yet passed legislation responding to a disaster that continues to have devastating effects on fish, beaches, and wetlands.

The Lasting Impact Of Deepwater Horizon

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:

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by Kiley Kroh and Michael Conathan

Yesterday, former members of the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling released a report card evaluating the progress made by the federal government, Congress, and industry toward implementing the critical reforms recommended by the Commission in their 2011 report.

None of them make the honor roll. While the harshest rebukes were aimed at Congress, the report card finds that overall, “in every category, much more needs to be done.”

Big Oil, on the other hand, touted the reforms made by the oil and gas industry. Oil & Gas Journal reported “the industry has always demonstrated a strong commitment to operate safely and responsibly offshore, and has deepened that [sic] the commitment in the nearly 2 years since the Macondo well accident.”

Erik Milito, API’s upstream and industry operations group director, said “the bar continues to rise, the commitment is stronger, and the mechanisms are in place to support the strongest safety standards possible.”

Such assurances from API are dubious at best, considering the Commission’s 2011 report found a direct causal relationship between API’s role as the industry’s principal lobbyist and public policy advocate and “compromised” safety standards that were a direct contributor to the BP disaster:

API’s proffered safety and technical standards were a major casualty of this conflicted role … Because the Interior Department has in turn relied on API in developing its own regulatory safety standards, API’s shortfalls have undermined the entire federal regulatory system.

John Watson, CEO of oil giant Chevron, told USA Today that he’s confident production can occur safely, saying, “we’ve learned from the Macondo incident and others and have steadily improved our practices as an industry. We’re in a much better position as an industry today than we were a few years ago.”

That’s a questionable self-evaluation from a company recently slapped with an $11 billion lawsuit and criminal charges for a November 2011 spill off the coast Brazil and responsible for setting the ocean ablaze with a natural gas fire in Nigeria this year that burned for 46 days and took the lives of two workers.

While both the federal government and industry have taken steps to improve the serious shortfalls in safety and oversight that led to the Deepwater Horizon disaster, a great deal remains to be done – especially as the industry looks to move into frontier areas like the Arctic that are fraught with uncertainty and risk.

The Commission gave the administration an overall grade of B, industry a C+ and Congress a D. (The ocean conservation group Oceana released a similar report card yesterday comprised of nothing but D’s and F’s.)

Let’s take a look at the commission’s findings.

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The Deepwater Horizon oil rig exploded nearly two years ago to the day, beginning an oil spill that lasted three months and released some two hundred million gallons of oil into the Gulf of Mexico. BP may have declared their mission accomplished, but the results of the spill are still trickling out.

The latest? Shrimp with no eyes, fish with lesions, and clawless crabs.

Scientists believe that shrimp, fish, and crabs in the gulf have been deformed by the chemical released to disperse oil during the spill. Fishers in the area say that they’ve been noticing deformities on their catches since. Al Jazeera reports:

“At the height of the last white shrimp season, in September, one of our friends caught 400 pounds of these,” [Louisiana commercial fisher Tracy] Kuhns told Al Jazeera while showing a sample of the eyeless shrimp.

According to Kuhns, at least 50 per cent of the shrimp caught in that period in Barataria Bay, a popular shrimping area that was heavily impacted by BP’s oil and dispersants, were eyeless. Kuhns added: “Disturbingly, not only do the shrimp lack eyes, they even lack eye sockets.”

“Some shrimpers are catching these out in the open Gulf [of Mexico],” she added, “They are also catching them in Alabama and Mississippi. We are also finding eyeless crabs, crabs with their shells soft instead of hard, full grown crabs that are one-fifth their normal size, clawless crabs, and crabs with shells that don’t have their usual spikes … they look like they’ve been burned off by chemicals.” [...]

The dispersants are known to be mutagenic, a disturbing fact that could be evidenced in the seafood deformities. Shrimp, for example, have a life-cycle short enough that two to three generations have existed since BP’s disaster began, giving the chemicals time to enter the genome.

BP claims to be investigating any toxicity and testing fish in the gulf, but they also claimed these marshes were clean. The company is clearly trying to distance itself from the spill, which was a public relations disaster. Indeed, just today, BP came to a settlement agreement with plaintiffs suing over health and economic issues related to the spill.

Tumors on a shrimp found in the gulf

At the same time, deep water drilling has started again. And though details are still only emerging on the full impact of the spill, some want the U.S. to move back into offshore drilling as aggressively as possible. Today, Sen. David Vitter (R-LA) went on the Senate floor to advocate for more drilling permits in the Gulf, arguing that “mother nature has proved amazingly resilient” in the wake of the spill.

Tell that to the fish without livers and the shrimp without eyes.

As BP reaps billions in profits from rising gasoline prices, the Gulf of Mexico is dying from its uncleaned pollution. “After months of laboratory work, scientists say they can definitively finger oil from BP’s blown-out well as the culprit for the slow death of a once brightly colored deep-sea coral community in the Gulf of Mexico that is now brown and dull,” the AP reports. Tarballs that washed up on the beaches were “teeming with bacteria.” Oil from the killer Deepwater Horizon blowout “has contaminated zooplankton, one of the first links in the oceanic food chain,” scientists found. And Louisiana state officials have found their coastline soaked in toxic oil, where the Coast Guard and BP have declared victory and abandoned monitoring:

Wetland areas in north Barataria Bay and the Pass a Loutre Wildlife Management Area at the mouth of the Mississippi River continue to show signs of oil that state officials say is from the BP oil spill, according to photos posted on Flickr by the state Coastal Protection and Restoration Authority.

In February, the oil giant BP reported reported $7.7 billion in profit for the fourth quarter of 2011, a 38 percent increase from a year earlier.

Twigs clump in oily, murky water.

BP’s 2010 Gulf of Mexico spill is still affecting the lives of many Americans, particularly the tens of thousands that have not settled lawsuits with the company. Yet the company has bounced back from the billions it lost in the wake of the spill.

BP announced today that its 2011 profit totaled $26 billion, a 114 percent jump from the year before, when the company’s “failure of supervision and accountability” caused the worst oil spill in U.S. history. As the company prepares for its upcoming trial, let’s take a look at how BP has made out after the Deepwater Horizon disaster:

• BP earned $3 million every hour in 2011. Its fourth-quarter profits reached $7.69 billion, which is up 38 percent from 2010.
• The company is sitting on another $14 billion in cash.
• The company continues to scale back its production in the wake of the spill, producing 10 percent less than 2010 levels.
• BP contributions to federal candidates totaled more than $98,000 in 2011, with more than half (65 percent) to Republican candidates.
• BP spent $8 million lobbying Congress in 2011, down from the record $15 million the company lobbied in 2009 – one year before the oil disaster.
• For every dollar the big five oil companies use in lobbying, they effectively receive $30 in subsidies. This could mean BP potentially gained up to $243 million in subsidies, although the exact amount for an individual company is undisclosed.
• In the third quarter, BP’s Bob Dudley announced the company had reached a “definite turning point” of boosted profits. However, nearly two years following the Deepwater Horizon disaster, BP has still only paid $7.8 billion of the $20 billion fund they created to compensate individuals and businesses for losses incurred by the spill.
• In order to pay the $40 billion cleanup costs and additional penalties, the company has committed to selling $38 billion worth of assets before 2014.

Despite being found “ultimately responsible” for the most devastating oil spill this nation has ever seen, BP has spent millions lobbying on bills that would speed offshore drilling and leases. This includes filing a total 24 reports on bills undermining safety regulation in the Gulf of Mexico, H.R. 1231 “Reversing President Obama’s Offshore Moratorium Act” and H.R. 1229 “Putting the Gulf of Mexico Back to Work Act.”

At the time, Interior Secretary Ken Salazar accused House Republicans of having “amnesia” about the oil spill. No doubt the total $137 billion profits in 2011 for the five big oil companies had something to do with it.

BP’s 2010 Gulf of Mexico spill is still affecting the lives of many Americans, particularly the tens of thousands that have not settled lawsuits with the company. Yet the company has bounced back from the billions it lost in the wake of the spill. BP announced today that its 2011 profit totaled $26 billion, a 114 percent jump from the year before, when the company’s “failure of supervision and accountability” caused the worst oil spill in U.S. history. As the company prepares for its upcoming civil trial, let’s take a look at how BP has made out after the Deepwater Horizon disaster:

BP earned $3 million every hour in 2011. Its fourth-quarter profits reached $7.69 billion, which is up 38 percent from 2010.

The company is sitting on another $14 billion in cash.

The company continues to scale back its production in the wake of the spill, producing 10 percent less than 2010 levels.

BP contributions to federal candidates totaled more than $98,000 in 2011, with more than half (65 percent) to Republican candidates.

BP spent $8 million lobbying Congress in 2011, down from the record $15 million the company lobbied in 2009 – one year before the oil disaster.

For every dollar the big five oil companies use in lobbying, they effectively receive $30 in subsidies. This could mean BP potentially gained up to $243 million in subsidies, although the exact amount for an individual company is undisclosed.

In the third quarter, BP’s Bob Dudley announced the company had reached a “definite turning point” of boosted profits. However, nearly two years following the Deepwater Horizon disaster, BP has still only paid $7.8 billion of the $20 billion fund they created to compensate individuals and businesses for losses incurred by the spill.

In order to pay the $40 billion cleanup costs and additional penalties, the company has committed to selling $38 billion worth of assets before 2014.

Despite being found “ultimately responsible” for the most devastating oil spill this nation has ever seen, BP has spent millions lobbying on bills that would speed offshore drilling and leases. This includes filing a total 24 reports on bills undermining safety regulation in the Gulf of Mexico, H.R. 1231 “Reversing President Obama’s Offshore Moratorium Act” and H.R. 1229 “Putting the Gulf of Mexico Back to Work Act.” At the time, Interior Secretary Ken Salazar accused House Republicans of having “amnesia” about the oil spill. No doubt the total $137 billion profits in 2011 for the five big oil companies had something to do with it.