Good News, and More Good News

Apparently, a box the size of a refrigerator can generate all the electricity needs of 100 homes... A Hummer is about the size of 4 refrigerators...I see an opportunity here!!

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In a bad economy, Oil companies still profit

from a 3/4/2009 letter to the editor, http://www.dailybreeze.com/letters/ci_11830754

A few weeks ago there was an article in the business pages that should have been on the front page of every newspaper in the country and the top story on every television news show. While the whole country was suffering a recession, including giant corporations like Microsoft, the ExxonMobil Corp. posted not only the highest profits in its history but the highest of any corporation in U.S. history: $45.2 billion. ExxonMobil made this money through outrageous price gouging, which caused the entire economy to suffer. That cost was added to the price of everything you buy, and it caused every business except the oil companies to suffer. The Republicans did everything possible to help them get away with this. When Congress tried to get records of the secret meetings between the Dick Cheney, administration officials and the oil companies, they were refused even when the records were subpoenaed. For that alone, Cheney should go to prison. The Bush administration gave them huge tax breaks, and when gas prices shot up to record levels and the economy went into recession, their answer was more tax breaks for the oil companies. The Republican Party works for these crooks and against ordinary people. They should all be removed from office. - MARK BEGOVICH

HOW THE 5 BIG OIL COMPANIES GOT SO BIG:

1/19/2009

compiled by Rex Frankel

British Petroleum (major brand name in USA is ARCO):

competitors bought out:

1969-Sinclair oil

1968-SOHIO merged with BP, BP took full ownership in 1987.

1988-Britoil

1988-Dome of Canada-bought by Amoco

1998-Union Texas Petroleum

1998-Amoco (Standard of Indiana

1999-Arco

2000-Burmah-Castrol

Gulf stations in 8 SE USA states,

also has joint refining and marketing venture with Mobil in Europe.

Chevron-Texaco:

Bought During the Bush Years: Texaco, Unocal

competitors bought out:

1984-Gulf Oil bought by Chevron,

1984-Getty Oil –bought by Texaco, causing a disastrous lawsuit for Texaco filed by Pennzoil

1997-Monterey Resources--(was originally spun-off by Santa Fe Energy in ‘96),

2001-Texaco

2005-Unocal

Dynegy-owns electrical power plants-26.5%,

Conoco-Phillips:

Conoco was formerly owned by DuPont Chemical co., bought in 1981 and spun off in 1998

Bought During the Bush Years: Phillips Petroleum

competitors bought out:

2001--Phillips bought Tosco (The Oil and Shale Corporation), which had bought western US division of Unocal and 76 stations in 1997; Tosco owned Circle-K stores and gas stations-which they bought in 1996, then sold in 2003 to Alimentation Couche-Tard of France.

2001-Gulf Canada Resource

2002-Phillips 66-merged with Conoco,

2006-Burlington Resources—was formerly oil division of Burlington Northern Railroad co.

BP stations in N. Calif.,

Alaska oil fields formerly owned by Arco,

Exxon-Mobil

competitors bought out:

1987-Celeron pipelines-from Goodyear Tire co.,

1989-Texaco Canada

1999-Exxon merged with Mobil Oil

Imperial/Esso in Canada,

joint venture in Calif. Oil fields with Shell, called Aera Energy

Royal-Dutch Shell:

Bought During the Bush Years: Pennzoil

competitors bought out:

1979-Belridge Oil

2001-Texaco’s refining and marketing division in USA

2002-Pennzoil/Jiffy Lube/Quaker State/Slick-50

European joint refining and marketing venture with Texaco.

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Moron-Math Used to Claim Exxon-Mobil is Overtaxed

8/18/2008

When oil-industry propagandists try to fool the public into showing sympathy for the greedy oil monopolies, they lately cite the high taxes the oil companies pay. What???

Exxon-Mobil profits are up 70% in the most recent three-month sales report. But a recent soundbite says that in the last 3 months, "Exxon paid almost $3 in taxes ($32.361 billion) for every $1 in profits ($11.68 billion)".

Certainly the U.S. government doesn't charge income taxes at a 75% rate. So what are these guys talking about?

And since Exxon's total revenue was $138 billion and the taxes they paid were $32 billion, they are not even paying a 33% tax rate!!

Doing the math, there's $106 billion of other money that flowed through Exxon during those three months, and most of it they don't call "profit". Yeah, some of it was to pay the suppliers of the crude oil; of course, they are also the supplier of a lot of that oil.

I'd sure like to tell the the IRS that about my small business.


According to CNN, http://money.cnn.com/2008/07/31/news/companies/exxon_profits/?postversion=2008073109

"The company returned $10.1 billion to shareholders in the form of dividends and stock buybacks, 12% more than last year."

This doesn't count as a profit for the company. The shareholders pay the taxes on it instead.

And a lot of those taxes are not really "paid" by the company.

The oilmeisters love to whine a lot about gas taxes being the problem. For example, $9.5 billion of the taxes Exxon paid in that quarter were sales taxes which the company merely extracts from consumers and then passes onto the government. And of course, that gas tax goes to pay for roads, which keeps us all driving and buying their gas.

Of course, our ever-non vigilant media always fails to reveal that while the price of a barrel of oil has zoomed, the profit for refining that barrel has also zoomed. The "refining margin" is a forgotten statistic, and that profit goes only to the USA oil monopolies, not to some "foreigners" who are ripping off Americans.

How much of the spike in oil prices has really gone to other countries, and how much has been grabbed by the big-5 worldwide oil monopolies?

I wish someone would report that.

--Rex Frankel

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http://www.istockanalyst.com/article/viewarticle+articleid_2459357&title=Exxon_Posts_Record.html

Exxon Mobil once again reported the largest quarterly profit in U.S. history Thursday, posting net income of $11.68 billion on revenue of $138 billion in the second quarter.
That profit works out to $1,485.55 a second.

Buried in the story we also find that "In addition to making hefty profits, Exxon also had a hefty tax bill. Worldwide, the company paid $10.5 billion in income taxes in the second quarter, $9.5 billion in sales taxes, and over $12 billion in what it called 'other taxes.'"

MP: In other words, Exxon Mobil paid $32.361 billion in taxes in the second quarter, which works out to $4,114 in taxes per second. Another way to look at it - Exxon paid almost $3 in taxes ($32.361 billion) for every $1 in profits ($11.68 billion), see chart above.

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http://money.cnn.com/2008/07/31/news/companies/exxon_profits/?postversion=2008073109
7/31/2008

NEW YORK (CNNMoney.com) -- Exxon Mobil once again reported the largest quarterly profit in U.S. history Thursday, posting net income of $11.68 billion on revenue of $138 billion in the second quarter.

That profit works out to $1,485.55 a second.

That barely beat the previous corporate record of $11.66 billion, also set by Exxon in the fourth quarter of 2007.

"The fundamentals of our business remain strong," Henry Hubble, Exxon's vice president of investor relations, said on a conference call. "We continue to capture the benefit of strong industry conditions."

But Exxon (XOM, Fortune 500) profit fell short of Wall Street estimates.

Analysts predicted the company, the world's largest publicly traded oil firm, would make $12.1 billion in profit on $144.4 billion in revenue, according to Thomson Reuters.

Exxon shares fell about 3% on the New York Stock Exchange.

Excluding money set aside for a recent damage award related to the Valdez tanker spill back in 1989, Exxon made $11.97 billion in the quarter.

Pricey oil cuts both ways

Exxon was both helped and hurt by high oil prices.

As an oil producer, the company makes a lot of money when crude prices rise. Exxon made $10 billion from selling oil in the latest quarter, up nearly 70%.

But as a refiner, it must also buy crude oil to turn into gasoline. Exxon actually buys more crude than it sells.

Profits from its refining business totaled $1.6 billion in the quarter, less than half of what they were last year.

"Record crude oil and natural gas realizations were partly offset by lower refining and chemical margins, lower production volumes and higher operating costs," read a statement attributed to Rex Tillerson, Exxon's chief executive.

While oil prices in the quarter were nearly twice as high as the same time last year, gasoline prices only rose about 30%.

That's one reason why the stock of major oil companies - such as Exxon, Chevron (CVX, Fortune 500), Royal Dutch Shell (RDSA) and BP (BP) - that both produce and refine crude has been relatively flat over the last year, despite the runup in oil prices.

Meanwhile, shares of companies that mostly produce oil, like Anadarko and Apache, have soared in the last year, while shares in refiners like Valero and Sunoco have tumbled.

Where the money goes

Exxon spent $7 billion in the second quarter finding and producing more new oil, up 38% from last year. Still, oil and natural gas production from the company fell 8%. Even excluding special events such as a labor strike in Nigeria and seizure of fields in Venezuela, production slipped 3%.

The production declines shouldn't be seen as an indicator the world is running out of oil, said Fadel Gheit, a senior energy analyst at Oppenheimer.

Rather, as the price of oil rises, the amount of oil Exxon or any international oil firm is allowed to pump from many oil-rich countries decreases, said Gheit.

"We didn't expect production to be down as much as reported," he said. "But that doesn't mean [worldwide] production is down, just that Exxon's share is decreasing."

The company returned $10.1 billion to shareholders in the form of dividends and stock buybacks, 12% more than last year.

On an earnings-per-share basis, Exxon made $2.22. That was still lower than analysts had expected, but 24% higher than last year, a gain Exxon attributed to its aggressive stock buyback plan.

The big international oil companies have been criticized for plowing much of their profits back into stock buybacks and other programs to benefit shareholders, as opposed to exploring for more oil which could bring down the price of crude for everyone.

"While oil companies are earning record profits and gas prices are soaring, the largest oil companies have invested more resources in stock buybacks than U.S. production," said Congressional Democrats in a press release shortly after Exxon announced its earnings.

Other critics charge the oil companies with deliberately restricting production in an attempt to keep prices high.

The industry says it's investing as much as it can in finding new oil, but is having a hard time given the shortage of workers and equipment in the sector.

Recent efforts by countries such as Russia, Venezuela and Kazakhstan to gain greater control of their own domestic oil resources have also hampered the ability of international oil companies to increase production.

In addition to making hefty profits, Exxon also had a hefty tax bill. Worldwide, the company paid $10.5 billion in income taxes in the second quarter, $9.5 billion in sales taxes, and over $12 billion in what it called "other taxes."

Political backlash

With Americans paying nearly $4 a gallon for gas, oil company earnings have been political fodder of late.

Congressional Democrats said they are having a conference later in the day to call for an end to tax breaks for big oil firms.

Several bills have been introduced in Congress to enact a "windfall" profits tax on these earnings, or at the very least eliminate manufacturing tax exemption oil companies now enjoy. Presumptive Democratic presidential nominee Barack Obama wants to tax oil companies at a special rate every time crude goes over $80 a barrel.

Most plans would either use this newfound tax money to fund investments in renewable energy, or give it to low income Americans struggling with high energy prices.

But so far those efforts have been blocked - mainly by Republicans - who say raising taxes on oil companies will only discourage investments in finding new oil and raise the price of crude.

Defenders of oil company profits also point out that their profit margin, at around 8%, is slightly below average for S&P 500 companies, and far below the 20%-plus margins seen at companies such as Microsoft or Pfizer.

...Thought Oil Companies Put their Huge Profits into Finding New Supplies of Oil? Think Again:


Where Big Oil's profits go

By John Porretto, The Associated Press
7/21/2008

http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2008/07/21/financial/f140139D71.DTL&feed=rss.business

HOUSTON - As giant oil companies like Exxon Mobil and ConocoPhillips get set to report what are expected to be another round of eye-popping quarterly profits, just where is all that money going?

The companies insist they're trying to find new oil that might help bring down gas prices, but the money they spend on exploration is nothing compared with what they spend on stock buybacks and dividends.

It's good news for shareholders, including mutual funds and retirement plans for millions of Americans, but no help to drivers already making drastic cutbacks to offset the high cost of fuel.
The five biggest international oil companies plowed about 55 percent of the cash they made from their businesses into stock buybacks and dividends last year, up from 30 percent in 2000 and just 1 percent in 1993, according to Rice University's James A. Baker III Institute for Public Policy.

The percentage they spend to find new deposits of fossil fuels has remained flat for years, in the mid-single digits.

Growing profits

The issue has become more sensitive as lawmakers and Americans frustrated by high gas prices have balked at gaudy reports of oil industry profits. ConocoPhillips is scheduled to kick off the latest round of Big Oil earnings reports Wednesday.

Oil prices are set on the open market, not by the oil industry. But that hasn't stopped public protests, a series of congressional grillings for top oil executives, and a failed attempt by lawmakers to slap Big Oil with a windfall profits tax.

In the first three months of this year, Exxon Mobil Corp., the world's biggest publicly traded oil company, shelled out $8.8 billion on stock buybacks alone, compared with $5.5 billion on exploration and other capital projects.

ConocoPhillips has already told investors that its stock buybacks for April to June of this year will come to about $2.5 billion - nine times what it spent on exploration.
Stock buybacks are common throughout corporate America, not just for Big Oil. They shrink the amount of stock on the open market, essentially increasing its value and giving individual shareholders a bigger stake in the company.

But some critics say Big Oil focuses too much on boosting stock prices, in an industry that sometimes ties executive pay to stock price.

And in focusing on buybacks and dividends over exploring for new oil, some critics say, oil companies jeopardize its already dwindling share of world supply.
"If you're not spending your money finding and developing new oil, then there's no new oil," said Amy Myers Jaffe, an energy expert at Rice University who's studied spending patterns of the major oil companies.

Investor-owned companies like Exxon Mobil and Chevron hold less than 10 percent of global oil and gas reserves, way down from past decades. And finding new oil has become harder and more expensive.

State-run oil companies, like those in Saudi Arabia and Venezuela, control about 80percent of oil reserves - and at today's prices, it's not surprising they're keeping a tight grip on what they have. Scarce equipment and hard-to-find labor also pose problems.

No one questions that Big Oil is rolling in cash. The cash the biggest oil companies bring in from running their businesses, or operating cash flow, is four times what it was in the early 1990s.
"It becomes a management decision," said Howard Silverblatt, a senior index analyst at Standard & Poor's. "It's not like they're going to the board and saying, `Well, I can do one or the other or the other.' The balance sheets are flush with cash."

The companies say they are doing what they can to find more fossil fuels around the world, but the easy oil is gone. Exploring these days may mean expensive projects in thousands of feet of water in the Gulf of Mexico or costly ventures pulling petroleum from Canada's vast oil-sands deposits.

TransCanada Corp. and ConocoPhillips Co. just said they'd spend $7 billion to nearly double the amount of crude flowing through a pipeline from Canada's tar sands to the U.S. Gulf Coast.
Analysts point out that because there's no guarantee prices will stay high, oil companies should approach exploration projects with caution.

Lag time involved

"There's only so much money you can throw at it without being ridiculous," said Joseph Stanislaw, a senior adviser to Deloitte LLP's Energy & Resources practice. "I think they're doing what they can."

It's also important to remember it can take several years before a company produces the first barrel of oil from a new field.

One example is an oil field in the Gulf of Mexico called Thunder Horse. Operated by BP and partly owned by Exxon Mobil, the platform only last month began producing oil and gas - nine years after the field's discovery.

At its peak, the multibillion-dollar project is designed to produce 250,000 barrels of oil and 200 million cubic feet of natural gas each day, which would make it the Gulf's largest producer.
"When you look at the spending that's going on, the companies are bringing on a lot of long-term discoveries," said John Parry, a senior analyst with John S. Herold Inc.

At ConocoPhillips, the capital spending budget for 2008, which includes exploration and production, is $15.3 billion, more than double the spending of five years ago.

"Could we spend $20 billion or $25 billion? Absolutely," spokesman Gary Russell said. "Could we do it effectively, in a way that provides ultimate value to our shareholders? Probably not."

Exxon Mobil has drawn criticism for its reluctance to invest in alternative energy sources like wind and solar power.

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Note: While we'll never get a handle on global warming and smog as long as we continue to be tied to cars and oil as the main way to get around, until that changes it's good to see an independent oil firm push for more competition. While oil companies over the last 20 years have been closing gas stations despite the huge growth in the number of cars in the USA, all the while buying each other and concentrating control of the remaining gas stations in the hands of 5 big corporations, one independent is opening new gas stations...

Valero steps on the gas in state

The company's service station growth pace has been speedy since entering the California market in 2000.

By Elizabeth Douglass, Los Angeles Times Staff Writer

January 7, 2008 Three gas stations vie for customers along Interstate 5 in Cardiff-by-the-Sea, but Cheryl Ahern-Lehmann usually bypasses the Chevron and Arco in favor of a station she once spurned as too pricey.

That station in north San Diego County, a Texaco for years, won her business after n Antonio-based Valero, which began gasoline operations in California in 2000, now owns two of the state's 14 fuel-making refineries and displays its brand on 921 service stations out of a statewide total of around 9,400. In the last three years, the company has added nearly 300 Valero locations to its California roster.

Valero's quiet expansion, which has continued apace across the country as well, represents an unusually speedy entry for a new brand. The company's push is all the more unusual because it comes as many major oil companies shed dealers, sell off stations to wholesalers and concentrate on larger, high-volume locations known as "super-pumpers."

"All the major brands have indicated that they really don't want any more gas stations . . . and they're terrified of cost cutting by companies like Costco and Wal-Mart," said Charles Langley, gasoline project manager at the Utility Consumers' Action Network, a San Diego-based watchdog group. Of Valero, he said, "they're the only brand that I see that actually seems to be growing and is aggressive about growing."

Since 2000, Valero has gone from an industry footnote to the largest refiner in North America, with 17 plants from California to Aruba in the Caribbean. The company supplies 5,800 gas stations in 38 states using the Valero, Diamond Shamrock, Shamrock, Ultramar and Beacon brands. Most of the sites are owned and operated by individual dealers and distributors instead of by Valero.

for rest of story: http://www.latimes.com/business/la-fi-valero7jan07,1,5037050.story?page=1&ctrack=1&cset=true&coll=la-headlines-business

It's About Time

Chevron says its earnings will take a hit

The heads-up signals that oil firms' profits will be more modest in future quarters.
By Elizabeth Douglass, Los Angeles Times Staff Writer
October 10, 2007

http://www.latimes.com/business/la-fi-chevron10oct10,1,374836.story?ctrack=1&cset=true

Sharply lower profit from making fuel took a big bite out of Chevron Corp.'s third-quarter earnings, which the oil company said Tuesday would be "significantly below" the record $5.4 billion it earned during this year's second quarter.

The announcement by the nation's second-largest oil company wasn't a surprise but is nonetheless one of the strongest signals yet that industrywide, record-setting results have come to an end and that oil companies are going to be posting smaller profits in the quarters to come....

A GUIDE TO WHO OWNS THE OIL INDUSTRY:

(not advertising, just a fact!)

http://www.oilwatchdog.org

http://www.oligopolywatch.com/stories/2004/11/20/energy.html

http://www.consumerwatchdog.org/energy/