Exxon Mobil made history on Friday by reporting the highest quarterly and annual profits ever for a U.S. company, boosted in large part by soaring crude prices.
Exxon, the world's largest publicly traded oil company, said fourth-quarter net income rose 14% to $11.66 billion, or $2.13 per share. The company earned $10.25 billion, or $1.76 per share, in the year-ago period.
The profit topped Exxon's previous quarterly record of $10.7 billion, set in the fourth quarter of 2005, which also was an all-time high for a U.S. corporation....
Exxon also set an annual profit record by earning $40.61 billion last year - or nearly $1,300 per second in 2007. That exceeded its previous record of $39.5 billion in 2006.
Do I mind companies making a profit? Not at all. Do I mind companies making monstrous profits? Not if they EARNED those profits in a FREE MARKET economy.
Some may argue that the oil companies compete in a free market, but the problem is that these companies have both intermarried and have grown increasingly greedy. No one is willing to leave any money on the table (i.e. undercut their competition.) It is only a hunch on my part, but I would be willing to bet that there are some major anti-trust violations taking place between the petroleum providers of the world.
These companies also cry that the cost increases are merely caused by supply and demand.
The average price for a gallon of regular gasoline hit an all-time high of $3.23 in May, according to the motorist organization AAA. The high prices were blamed on strong demand and a series of accidents that shut down refineries in the U.S. But slack demand for gasoline in the latter half of last year kept gas prices from rising as dramatically as crude prices.
That is a load of southbound hay in a northbound bull. These companies are restricting supply to create false scarcity. If demand is so great there should be new refineries or updates made to existing refineries to increase production. And frankly, I'm not buying the whole "we're running out of oil" deal either. At least once a month I hear about some massive new supply of oil that has been discovered somewhere in the world.
I'm not really sure what it is that has spurred it, but it is as if the oil companies have suddenly realized that American consumers really don't have any choices. We don't have the infrastructure for public transportation (not to mention being too busy, independent, and impatient to put up with the hassles of public transportation), we're too spread out to make walking or bicycling a viable option, and auto manufacturers (whom I believe are in league with the oil companies) refuse to produce fuel efficient or alternative fuel cars. They have a captive audience and they know it, and what's more they have their hands so deep in Congress' pockets that they are well aware that they don't have the cahunas, er, wherewithal to bring any serious remedy or action against this out of control industry.
Sen. Charles Schumer, D-N.Y. took a swipe at the two firms, calling on fellow lawmakers to break the country's dependence on foreign oil and rollback unnecessary tax incentives for oil companies.
I would agree with him if (a) I believed that he would actually do something about it and (b) if the oil companies wouldn't penalize us even further and whine about how they had to raise gas prices (again) to make up for losing the government subsidies.
(You have no idea how hard I am trying to keep from swearing.)
The oil companies have shot back with numerous excuses.
ExxonMobil representatives ... stressed the cyclical nature of the business and noted that growing global demand for energy will require companies to heavily invest in future growth. The company said it estimates that global demand will grow by 30 percent by 2030.
We'll see how they invest their money. All I can say is that I hope that a new energy source is discovered that will make this the last time the oil companies post profits like that ever again. As soon as I have an equivalent alternative to petroleum based transportation I will take it.
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