US oil company revenue higher than the GDP of Canada
On news of the massive profits reported by ExxonMobil today, ABC News crunched the numbers and has found that the combined revenue of the top 5 US oil companies was $1.5 trillion last year.
The news report points out that this is more that the total GDP of Canada, at $1.43 trillion last year.
As many have rightly pointed out that while such numbers are staggering, the profit margins are not out of line relative to other companies, like Microsoft. However, where these profits do become obscene is when you consider how much US oil companies receive in taxpayer subsidies.
A report released today by the Friends of the Earth (pdf) finds that US oil companies will get a whopping $32.9 billion in tax breaks, subsidies and other handouts over the next 5 years. That's $32.9 billion of taxpayers money going into the pockets of oil companies.
Here's the breakdown of how your tax dollars will be spent on subsidizing Big Oil over the next 5 years:
Tax breaks = $23.2 billion
Royalty relief = $3.8 billion
Research and development subsidies = $1.6 billion
Accounting gimmicks = $4.3 billion
With record-breaking gas prices fueling these profits and the world's scientists with the leading academies of the world agreeing that we need to stop burning so much oil, coal and other fossil fuels, seems to me that a good first step might be to take these massive subsidies and start investing in sustainable long-term energy sources like wind, solar and geothermal technology.
Makes sense to me, but then again I'm not a politician.
The ABC news clip said that the $1.5 trillion is sales. The graphic mistakenly labelled it as profit.
As Rod says, it's important to correct that this is their revenue, not profits. However, the point is solid -- it's a heck of a lot of spending power which can buy a lot of influence of course.
If DSB is up to some reasearch, seeking out pay-back estimates on the return to the economy for those subsidies would be interesting. It's hard to imagine they'd be good even without economic evaluations of environmental effects. There are already people claiming all sorts of things in this regard (see, for example www.cato.org/pubs/pas/pa390.pdf). Now that would be worth Desmogging!
Consider too the job return on these subsidies compared to potential others. According to one source, renewable energy produces more jobs per kilowatt than fossil-based fuels, and three times as many jobs per dollar. (Source: Daniel Kammen, UC Berkeley; Dollars from Sense, Department of Energy; http://www.apollopac.com/issue-content.php?id=13). Energy efficiency efforts, some say, get even more jobs per subsidy dollar (see http://www.aceee.org/pubs/ed922.htm). Find more of this DSB!
Another angle might be to try to appeal to the self-serving side of a government. Which subsidies result in more taxes for any given government down the line? One such "tax payback" exercise has been done for the the wind power in the US. General Electric (GE) Energy Financial Services has released a study estimating that the federal production tax credit (PTC) for wind power that is set to expire December 31, 2008 more than pays for itself through tax revenues from the projects' income, vendors' profits and individual workers' wages. (see http://www.renewableenergyworld.com/rea/news/story?id=52825&src=rss).
It is $1.5 trillion in sales, not profits. The misrepresentation of oil companies on this website is breathtaking.
Doesn't take much to lose your breath apparently.
Revenue=sales, where did you get lost?
Those who can afford to top off might have difficulty getting their tanks full because gas stations will be out thanks to just in time delivery aggravated by the reserves to production ratio
Paul A/B/C......X/Y/Z said "The misrepresentation of oil companies on this website is breathtaking".
Not nearly as breathtaking as the misrepresentation of science by the resident trolls who continue to infest this site.
(Poor Paul has an identity crisis, he can never remember who he is supposed to be. Does your mother get baby bonus cheques for everyone of your ridiculous personae?)
Ian Forrester
Here's a simple example of demonstrating how Exxon's profits are perfectly reasonable.
Kodak, you remember Kodak, right? Well, for the second quarter, they had a profit of $495 million. Outraged? I didn't think so. Why not? Their revenue was only $2.49 billion. Percentage wise, that is a profit margin 200% higher then you know who.
http://www.nytimes.com/2008/08/01/business/01kodak.html?ref=technology
And just how much does Kodak receive in subsidies? What percentage of GHG emissions is the production and use of Kodak products responsible for? How much environmental carnage does the production of Kodak products cause? Answer those questions for me, and we might BEGIN to have a basis for comparison here.
Fern Mackenzie
Whether or not the comparison is valid, I think it's important to note that we are reaching a tipping point. The planet will not be able to bear under the pressure of our demands.
It's just sad to note that we may have to reach a crisis point before governments start moving towards more sustainable solutions.
http://www.endofsuburbia.com/
What it will take, I think, is another category 5 hurricane in the Gulf of Mexico knocking out another 100 offshore oil platforms and making a direct hit on my city of Houston.
We can expect fewer people will evacuate this time because of high gas costs. Those who can afford to top off might have difficulty getting their tanks full because gas stations will be out thanks to just in time delivery aggravated by the reserves to production ratio that is thinner today than it was in 2005.
Then witness the hapless Homeland Security response under Michael Chertoff bullocks up the recovery again just like he, not Michael Brown, botched it in 2005. Bush will be chopping wood just to the north of us in Crawford and will be out of the loop and will say he was unaware of the danger.
A recent study i did for my energy and society class shows subsidies for the fossil fuel companies were $74B in 2006, with $39b going to oil. Half of that was related to our "Oil War" (according to Greenspan) in Iraq, so disregarding that if you can leaves $19B a YEAR.
Difficult to understand why healthy companies deserve or need such subsidies. Even more difficult they came about.
PS i cannot post my graphic for some reason. But a quick google will get you the same numbers or numbers in that range.
The US have always had a great appetite for energy. It is no surprise that the States are looking for a different main supplier for the rock oil - and since Canada has always been a good friend, it's no wonder that the oil sands are their no.1 choice. Environmental issues are usually only 2nd, 3dr or "x" priority, so no surprise here.
http://www.cancer-blog.org/
oil..the black treasures!! political science papers