Big Oil profits up, US workers down

This music video says about itself:

Toast the Earth with Exxon Mobil

Watch as ExxonMobil funds junk science, wrecks the Arctic Refuge, and spills oil on endangered wildlife.

By Patrick Martin in ther USA:

Oil bosses rake in record profits as US economy stalls

29 April 2011

Exxon-Mobil, the world’s biggest and most profitable corporation, raked in a staggering $10.7 billion in profits during the first quarter of 2011, the company reported Thursday. The figure was a 69 percent increase over the same quarter last year, and the highest quarterly profit since 2008, the last time oil prices topped $100 a barrel.

The company’s total revenues hit $114 billion in the first quarter, making it likely that in 2011 it will break its 2008 record of $458 billion, and could become the first oil company to reach half a trillion dollars in revenue. Exxon-Mobil’s revenues exceed the Gross Domestic Product of all but 18 of the 194 countries listed by the World Bank.

The profit figure for Exxon-Mobil was only the most obscene of a flood of multi-billion-dollar earnings reports from the major oil companies. Shell’s profits rose 22 percent to $6.9 billion, while the profits of ConocoPhillips rose 44 percent to $3 billion.

One year after the Gulf oil disaster, BP posted a first-quarter profit of $7.1 billion, an increase of 17 percent. Occidental Petroleum saw its profits soar 46 percent to $1.55 billion in the first quarter, while Apache Corporation netted $1.1 billion, an increase of 51 percent.

Contrary to the free-market mythology embraced by the Obama administration, the Democratic and Republican parties, and the corporate-controlled American media, the record oil profits were not a reward for superior performance in the production of petroleum and its derivatives.

Nearly all the major oil companies actually produced and sold less oil and gas in the first three months of 2011 than in previous quarters, but they charged far higher prices. Exxon-Mobil was the only major firm reporting Thursday whose output actually rose, largely because of its acquisition of the natural gas producer XTO.

Shell’s oil and gas output was down 3 percent, output by ConocoPhillips was down 7 percent and BP output down 11 percent. Apache’s production remained flat: its 24 percent increase in revenues exactly matched the 24 percent increase in crude oil prices during the same period.

The price of crude oil has risen steadily since the beginning of the year, spurred on by increasing demand from China and other Asian countries, and by the mounting conflicts in the Middle East, which have cut off oil exports from Libya entirely, and sporadically threatened output at smaller suppliers, including Egypt, Sudan and the Persian Gulf sheikdoms.

An additional factor is the declining value of the dollar, since most oil market transactions are conducted in the US currency. The value of the US currency fell 68 percent during the eight years of the Bush administration. Since Obama took office less than two and a half years ago, it has fallen a further 43 percent. The dollar prices of many commodities are soaring as a result: gold is over $1,500 an ounce, silver nearly $48 an ounce, and oil topping $120 a barrel in the spot market.

Speculation in the oil futures markets is a colossal contributing factor in this price run-up, although one largely downplayed by the US government and media. One recent analysis by the investment bank Goldman Sachs—which knows something about manipulating markets—estimated that speculative bidding had pushed the price of a barrel of oil to a point $27 above its “natural” market price.

With world oil production nearly 90 million barrels a day, this speculators’ “tax” would amount to $2.4 billion a day skimmed off by the financial swindlers, or a staggering $876 billion a year. The figure is a useful one to recall, the next time right-wing advocates of austerity budgets claim that there is “no money” to meet social needs like education, healthcare and pensions.

In the United States, the rapid rise in the price of gasoline, now over $4 a gallon in many areas, acts as an enormous drag on the economy, particularly in slowing down consumer spending. The Energy Information Agency said this week that gas prices across the country averaged $3.88 a gallon, up 81 cents a gallon since the year began.

Tens of millions of workers have no alternative but to drive long distances to their jobs, given the size of the country and the absence of public transportation. The additional money they must spend on gasoline is not available to provide other necessities for their families.

According to one report, “Rising gas prices are draining most of the extra money that Americans are receiving this year from a Social Security payroll tax cut. That’s a major reason why consumer spending cooled off in the January-March quarter. Consumers boosted spending at a 2.7 percent pace, down from the previous quarter’s 4 percent pace and the weakest since last summer.”

USA: Rep. Tim Scott (R-SC) defends giving billions in tax subsidies to Exxon: “Fair is a relative word”: here.

USA: Dem Senators Defend Big Oil Against Own Party: here.

The dirty energy money behind the Senate move to dismantle the EPA: here.

Life is so hard for Oil bigwigs. How ever will they make it without their oil subsidies? Here.

It’s not just [US] Republicans who flip-flop on climate change or who simply don’t want to talk about it: here.

Mark Provost | Why the Rich Love High Unemployment. Mark Provost, Truthout: “Christina Romer, former member of President Obama’s Council of Economic Advisors, accuses the administration of ‘shamefully ignoring’ the unemployed. Paul Krugman echoes her concerns, observing that Washington has lost interest in ‘the forgotten millions.’ America’s unemployed have been ignored and forgotten, but they are far from superfluous. Over the last two years, out-of-work Americans have played a critical role in helping the richest one percent recover trillions in financial wealth”: here.

Britain: While the big oil companies and the government collude to get more offshore oil rigs up and running, scientists are busy warning us of the dangers to human health and wellbeing of the pollution that inevitably comes with offshore drilling: here.

5 thoughts on “Big Oil profits up, US workers down


    What a startling contrast between the jingoistic exhortations of “American Exceptionalism” and the reality that we have become a third world source of labor and slum landlord ownership for Europe.

    That’s the take of Harold Meyerson in The Los Angeles Times, who writes of a shocking reality behind the US economic decline. After describing how Deutsche Bank has become one of Los Angeles’ newest large slumlords, Meyerson drops a bombshell:

    But slumming in America is fast becoming a business model for some of Europe’s leading companies, and they often do things here they would never think of doing at home. These companies – not banks, primarily, but such gold-plated European manufacturers as BMW, Daimler, Volkswagen and Siemens, and retailers such as IKEA – increasingly come to America (the South particularly) because labor is cheap and workers have no rights. In their eyes, we’re becoming the new China. Our labor costs may be a little higher, but we offer stronger intellectual property protections and far fewer strikes than our unruly Chinese comrades.

    Don’t take my word for it. Check out the study released this month by the Boston Consulting Group, which concludes that when you compare China’s soaring wages and still-low levels of productivity with our stagnating wages and rising levels of productivity, the price advantage of manufacturing in China instead of the U.S. will shrink to insignificance by 2015. Investment in the U.S., says the group, “will accelerate as it becomes one of the cheapest locations for manufacturing in the developed world.”

    As many economists have noted, despite the right-wing, think-tank characterization of American workers, labor productivity has risen in the US since the ’90s, even as remuneration has barely advanced. Of course, the compensation and bonuses for CEOs and Wall Street financiers has skyrocketed – and all the latter do is manipulate money. They don’t make a thing.

    Meyerson concludes: “In the new global pecking order, the decline of American unions and the steady downward mobility of American workers are making us the destination of choice when European companies want to get the job done on the cheap.”

    Normally, such a situation would be a wake-up call. But the “conservative” anti-labor and pro-corporate tilt of America’s media and right-wing backers of “think tanks” have been successfully steering the middle class into the lower class, with more to come.

    Meanwhile, European workers have become the envy of American labor.

    Mark Karlin
    Editor, BuzzFlash at Truthout


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