07-26-07 by dugan
Once Upon a Time, Big Oil made its big profits on drilling oil. Now the oil guys are pickpocketing motorists directly, racking up ever-larger profits on gasoline and diesel production. Exxon and Shell today joined Conoco Phillips and BP in reporting 2nd quarter refinery profits big enough, or almost big enough, to offset lower profits on oil production.
Instead of using their new billions to properly expand, modernize or even maintain their refineries, Exxon and Shell are the leaders in repurchasing tens of billions of dollars worth of their own stock. The purpose? It’ll boost the stock price. Shell said it would buy $15 billion worth of its own stock this year, 11% of all its outstanding shares. Exxon has repurchased $16.1 billion of its stock just in the first six months of this year, after similar buybacks all of last year.
There oughta be a law. Congress proposed a few good ones this year to recapture some of Big Oil’s billions for renewable fuel development, to redefine price gouging and ban oil companies’ slipperiest accounting practice. The proposals have been buried by the massive oil lobby, though there’s still a faint chance that lawmakers will acquire the courage to strengthen the final bill.
Check out this memo from the Center for American Progress for a legislative status report and some enlightening numbers on oil companies’ profits vs. renewable fuel spending. The dueling oil exec. quotes near the end are hilarious, if they don’t make you choke.