Category Archives: Oil

Oil Companies Are Raking In The Profits — And Tax Subsidies

The big 3 oil companies have reported a combined profit of $44 billion for 2012. The New York Times reported that these earnings have actually dropped based on stated expectations earlier this year. They are attributing it to the lower gas prices. They also note that the top five oil companies receive a total of $2.4 billion in tax breaks each year

According to Republicans, in order to balance our budget, they want to cut tax credits and programs that benefit the middle class, i.e., education funding for Pell Grants and public universities, tax credits like the earned income tax credit and mortgage deductions, Meals on Wheels and food subsidies for low-income families, but they absolutely refuse to end these oil and gas industry subsidies.  

The Center for American Progress Action has analyzed Romney’s tax plan and it would actually lower the top five oil and gas companies yearly tax rates by another $2.3 billion. They say this would double what they already receive in tax breaks. 

Think Progress wrote on this subject and they actually listed some of the ways these oil companies are spending their money. 

ExxonMobil:  

– Exxon spent 42 percent — or $10.7 billion — of its 2012 profits buying back its stock, which enriches executives and largest shareholders. 

– Exxon has spent $17 million lobbying for the past 18 months, making it the top spender in the oil and gas industry. It has spent more than $52 million lobbying for the first three years of the Obama presidency, 50 percent more than in the Bush administration. 

– Exxon is sitting on $18 billion in cash reserves. 

– Exxon send federal candidates $1.3 million in campaign contributions so far this campaign cycle, sending 91 percent to Republicans

– Exxon paid just 13 percent in federal taxes last year, lower than the average American family. Right after Mitt Romney, Senate Minority Leader Mitch McConnell (R-KY) is the top recipient of Exxon federal contributions

– Exxon CEO Rex Tillerson received $24.7 million total compensation.

Royal Dutch Shell

– Shell will start drilling in the Arctic this summer, but its oil spill response plan is still behind schedule. It’s off to an inauspicious start in the Arctic, recently losing control of an Arctic drilling rig. 

– Shell has spent nearly $22 million for the past 18 months, making it the second-biggest spender of the oil and gas industry. 

– Shell has more than $17.3 billion in cash reserves. 

– Shell bought back 15 percent of its second-quarter profits, or $900 million. 

– Shell CEO Peter Voser’s compensation more than doubled in 2011 to $15.3 million. His salary increased (in euros) by 113 percent. 

– In its annual report, Shell noted that the number of oil spills increased from 195 in 2010 to 207 during 2011.

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Tax Subsidies — A Total of 56% Go To Just 4 Industries

Darrel Issa, Chairman of the House Oversight and Government Reform Committee, along with his fellow Republicans have been pushing for an investigation into the now bankrupt Solyndra, a solar company that received approximately $500 million in subsidies from the Obama administration. They are saying this has resulted in huge losses for the tax payer. This may turn out not to be true.  

CNN Money reported that during the bankruptcy hearing it was revealed the company had $859 million in assets and $749 million in liabilities at the start of 2011, and as a result there are some in Washington that believe we can actually recoup a big chunk of its cash. 

“The federal government owns the assets of borrowers that default and can manage or sell them,” Mark Muro, policy director at the Brookings Institution’s Metropolitan Policy Program, wrote in an article earlier this week. “It’s conceivable that taxpayers will not lose any money.”  

I think we should be looking at the other industries receiving subsidies from our government. This is something Republicans really don’t want to do as they are some of their biggest contributors. They have been resistant since tax reform has become the main topic in our political debates on ending these subsidies as they consider these to be a form of tax hikes (thanks to the Grover Norquist tax pledge). In all fairness though, Democrats also receive contributions from the very same industries, but they have been very focal at ending these subsidies. 

Citizens for Tax Justice has analyzed corporate tax rates from 2008 to 2010. They have examined over half of the Fortune 500 companies and it should be to no ones surprise that the richest industries are the ones that get the biggest subsidies. They found that 56 percent of the total tax subsidies went to just four industries: Financial, utilities, tele-communications, and oil, gas & pipelines.   

So I ask you, who are the biggest crooks in this system.

Koch Industries Caught in Illegal Iran Scandal

The Koch brothers who among other things is responsible for funding the Tea Party movement (along with Karl Rove, founder of American Crossroads) has been caught paying bribes to win contracts, engaging in possible illegal trade with Iran, price fixing, and ignoring environmental regulations. 

The report in Bloomberg Markets also discovered Koch Industries documents admitting that they had violated federal law. “It’s a document right there on the record, right out of the lips of Koch Industries,” Bloomberg Markets reporter David Evans told ABC News. “I think there are enough of these payments that I think any prosecutor would want to look further,” Columbia University Law School professor John Coffee explained. The video below is a report on this scandal by ABC News during which the reporter confronts David Koch coming out of his Park Avenue apartment. 

I would love to have seen a much more in-your-face confrontation, but it does show him quickly being escorted into his SUV avoiding the report’s questions. In my neck of the woods, they call this “the chickens coming home to roost.” I’m not going to get my hopes up for any real justice here since the power of the Koch brothers goes up to the highest levels of our government and governments around the world. 

How To Rig An Election

GOP has long been a party of Christian and “small-government” conservatives. Since their wins at the state and federal levels in 2010, which they won on a platform of creating jobs, jobs, jobs and deficit reduction, their sole focus, like a laser, has been on busting unions and cutting benefits to people like police, firefighters, and teachers, cutting education for our schools, and getting rid of women’s healthcare (that is to just name a few). At the same time they have been cutting taxes for the very wealthy and corporations, i.e., big oil, Wall Street.

These constituents that used to identify themselves as conservatives are now realizing the GOP do not have their best interest in mind. Since the GOP has been pushing away the people who used to support them, they are now trying to devise a way to win elections without having the majority of Americans behind them anymore.

Since their constituents are now just the wealthy and the people who run those corporations (whose numbers are in the thousands, if that), they have now come up with a way to win elections without a majority of voters behind them. Donna Brazile recently wrote an op-ed:

From coast to coast, the GOP is engaged in what appears to be a coordinated, expensive effort to block voters from the polls. The motivation is political — a cynical effort to restrict voting by traditionally Democratic-leaning Americans. In more than 30 states, GOP legislators are on the move, from a sweeping rewrite of Florida’s election laws to new rules for photo identification in Ohio, Wisconsin, North Carolina and more than 20 other states.

As a result, 11% of Americans — 21 million citizens of voting age who lack proper photo identification — could be turned away on Election Day. And these people tend to be most highly concentrated among people of color, the poor, the young and the old.

This shows that GOP and Republicans are not just racists (their insistence that President Obama show his birth certificate, i.e., “his papers“), they are now waging class warfare. GOP won such huge majorities at the state level that this has allowed them to practically push through any bill they wish, written any way they want, and they are now working to exclude as many people from our elections as possible.

It seems there isn’t much we can do about it; however, as I mentioned in previous posts, the one thing we have that they do not is our enormous numbers. We have that working for us and can use it. It is working across the globe from the uprisings across the middle east to Spain, Britain, Germany, etc. We need to learn from them, stop being complacent with the current system, and take to the streets. We can make a change. This is no longer a country divided by race, we are a country divided by class, plain and simple!

Big Oil’s First-Quarter Profits

Big Oil’s first-quarter profits jumped 45% to nearly $36 billion At a time when our gas prices are through the roof and disasters on multiple continents, oil companies are rolling in the dough. They are bringing in record profits (not to mention the record bonuses handed out by Wall Street for 2010).

The class warfare is becoming more and more apparent as the days and months go buy. While they are back to making money at pre-2008 and pre-Gulf oil spill levels, we are having to jump through hoops to get buy a house or hold onto a house that is under water or heaven for bid going into foreclosure.

Here are oil company profits for the first quarter of 2011; also, American companies previous profits and tax breaks:

Exxon Mobil Corp:
2011 profits swelled by 69% to $10.7 billion.
2009 profits of $19; paid $0.00 in federal income tax and received a $156 million IRS rebate.

Royal Dutch Shell:  
2011 profits jumped 60% to $8.8 billion.

BP
2011 net income rose 17% to $7.1 billion.

Chevron Corp
2011 earnings jumped 36% to $6.2 billion.
2009 profits of $10 billion; $19 million refund last year.

ConocoPhillips
2011 first-quarter profits widened by 44% to $3 billion.
2007 to 2009 profits of $16 billion; received $451 million in tax breaks

This should be unacceptable, infuriating to all of us. I truly hope we can keep up this anger that we have seen over the past few months since the 2010 election and change the trajectory our country is heading.

Boehner Won’t End Oil Subsidies

There are Democrats who are wanting to end billions in subsidies to oil companies. Since they have posted record profits and are considered the most profitable industry on earth, it would sound like a great idea to fix our budget problems, however, Boehner does not want to end these subsidies.

Instead he wants to drill for oil and increase production. This makes no sense because any oil we drill for would automatically go on the world market.

The only benefit it would have is to create jobs and increase the chance of another oil spill. Steve Hargreaves wrote:

The problem is this: While increased oil and gas drilling in the United States may create good-paying jobs, reduce reliance on foreign oil and lower the trade deficit, it will have hardly any impact on gas and oil prices. That’s because the amount of extra oil that could be produced from more drilling in this country is tiny compared to what the world consumes. Plus, any extra oil the country did produce would likely be quickly offset by a cut in OPEC production.
“This drill drill drill thing is tired,” said Tom Kloza, chief oil analyst at the Oil Price Information Service, which calculates gas prices for the motorist organization AAA. “It’s a simplistic way of looking for a solution that doesn’t exist.”
The World’s Most Profitable Companies
Since the oil companies are listed as the top 6 richest industries in the world, I think they should pay more, but since they own our representatives, particularly Republicans, it is very unlikely they will end these subsidies unless we force them to.