We are all feeling the prices at the pump and the ramifications of increased oil prices throughout our economy, so why are the big oil companies still making record profits? Not only are these big oil companies reaping in record amounts of money while consumers suffer, they are also still receiving federal subsidies. What’s up with that?
Personally, I don’t understand how the oil companies can justify passing the entire burden off on the American people of the rising cost of gasoline considering our current economic recession. Exxon Mobil Corp., BP America Inc., Shell Oil Co., Chevron Corp., and ConocoPhillip know high fuel prices are hurting consumers, but on Tuesday they defended their profits of $123 billion last year as in line with other industries. “Our earnings, though high in absolute terms, need to be viewed in the context of the scale and cyclical, long-term nature of our industry as well as the huge investment requirements,” said J.S. Simon, Exxon Mobil’s senior vice president.
“On April Fool’s Day, the biggest joke of all is being played on American families by Big Oil,” said Rep. Edward Markey, D-Mass. Markey wants oil companies to invest 10 percent of their profits to develop renewable energy, as well as relinquish up to $18 billion in tax breaks over 10 years. This money would then be used to support renewable energy and conservation. The oil companies’ response to this proposal is that they have already spent $3.5 billion over the last five years on renewable fuels, and they reject any tax increases. That may be, but it hasn’t been enough, or all of our cars would be getting at least 50 mpg. Without government intervention, the oil companies will continue to gouge the American consumer while making record profits. “These companies are defending billions of federal subsidies … while reaping over a hundred billion dollars in profits in just the last year alone,” stated Markey, chairman of the Select Committee on Energy Independence and Global Warming. The House of Representatives has already approved legislation that will end tax breaks for big oil, while using this revenue to support wind, solar and other renewable fuels. The Senate has yet to pass this legislation.
According to AP writer H. Josef Herbert, “Recently oil prices reached a peak of $111 a barrel. While declining a bit in recent days, the price remains above $100 and there’s talk of $4 a gallon gasoline in the coming months.” Oh yes, the threat of $4 a gallon; I paid $3.99 a gallon today. I have always felt that American gas prices were too low prior to the Bush administration — that these prices did not adequately reflect the value of this limited resource. Now that we are experiencing high gas prices, I can’t help but wonder what I am paying for when oil companies are making record profits and the “supplies of both gasoline and oil seemed to be adequate.” I wouldn’t mind paying the current price for gasoline if the oil companies’ profits were slashed in order to bring about new developments and change in American energy use.