Exxon Mobil Corp. broke records as its third-quarter profits soared to almost $10 billion and it became the first public company ever with quarterly sales topping $100 billion. Royal Dutch Shell wasn’t far behind, posting profits of $9 billion for the quarter.
They followed similar eye-popping gains by BP, ConocoPhillips and Marathon Oil Corp. Chevron’s profits rose “only” 12.5 percent, compared with Exxon Mobil’s 75 percent leap to $9.92 billion from $5.68 billion a year ago.
“They are just printing money right now,” said oil analyst Fadel Gheit at Oppenheimer & Co. in New York. “They are making so many trips to the bank because they can’t take all the money there at one time.”
The staggering numbers led Democrats in Congress to demand a new windfall profits tax and public hearings on oil company price gouging. “Big oil behemoths are making out like bandits, while the average American family is getting killed by high gas prices and soon-to-be-record heating oil prices,” Sen. Chuck Schumer (D-N.Y.) said in a statement. Energy Secretary Samuel Bodman said President Bush opposes any windfall profits tax.
Nervous about facing voter outrage in next year’s congressional elections, some Republicans asked the industry to increase production and ease back prices. But reports indicate that, even after the recent hurricanes wrecked a significant chunk of the nation’s oil refineries, the oil companies are in no rush to build new refineries. Gheit commented, “Exxon is a good corporate citizen but it does not work for the welfare of the country.”
Bush and the GOP are using the crisis to try to push through expansion of oil drilling in Alaska’s Arctic National Wildlife Refuge and other wilderness areas. But many experts say this will not produce sufficient oil to meet the nation’s energy needs. Instead, they say, the federal government should implement energy conservation programs and alternative energy development, measures the Bush administration has opposed.
Oil and natural gas prices were surging before Hurricanes Katrina and Rita, and then skyrocketed to record levels afterward.
The major oil companies are now making profits at the rate of more than $100 billion per year. That’s more than the U.S. admits to paying for the wars in Iraq and Afghanistan. It’s more than the federal government spends on education at all levels ($59 billion) or veterans ($61 billion). It’s more than is spent on housing and food nutrition combined ($84 billion). And oil profits are approaching 50 times the amount spent on heating assistance to low-income families.
Last week the Senate fell short of the 60 votes needed to increase the underfunded federal Low Income Heating and Energy Assistance Program (LIHEAP) from $2.2 billion to $5.2 billion. This $3 billion could be paid for by the increase in Exxon’s third-quarter earnings.
The Associated Press and Art Perlo contributed to this story.
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