U.S. oil giant ExxonMobil posted $39.5 billion in profits for the year 2006. This is about $108 million a day in profits. It was the largest amount of profits ever garnered by a U.S. company.
The world’s largest oil producer has raked in billions of dollars for the past couple of years. Meanwhile, oil prices have
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The fourth largest oil producer, Royal Dutch Shell, also experienced a dramatic increase in profits last year. Shell’s 2006 profits reached a staggering $25.44 billion.
According to Wall Street investors, ExxonMobil is expected to take in $35.9 billion in 2007, just under what it earned in 2006 and 2005. In 2005, Exxon-Mobil broke profit records for the first time by reporting over $36 billion.
“The focus is the same, the strategy is the same and therefore we expect the story to be the same,” said Lanny Pendill, senior energy analyst for broker Edward Jones. (Wall Street Journal, Feb. 2)
This mainly means that the oil monopolists, like ExxonMobil, will continue to maintain high gasoline prices, exploit oppressed people’s resources, and gain tax-incentive breaks from the U.S. government.
The oil monopolies, with the help of the capitalist government, gain support through favorable tax cuts. The cuts supposedly benefit the U.S. working class by helping to create jobs. This is an outright lie. Instead of job growth, the major outcome has been increased profits for the richest corporations and their managers.
Lee Raymond, ExxonMobil’s former CEO, was paid a reported $51 million in 2005. This was roughly $141,000 per day for every day of the year, or around $6,000 per hour—if you include the hours he was asleep. Raymond also received a $400 million retirement package in 2006.
Working class pays
As corporate fat cats like Raymond pulled in hundreds of millions, workers throughout the United States scraped by, bearing the brunt of high oil prices. In much of the United States, mass transit is so inadequate that tens of millions of workers—including many making the miserably low minimum wage—have no other way to get to work than by car.
With just 4.5 percent of the world’s population, the United States consumes 25 percent of the world’s petroleum every year.
Extreme waste of resources usually translates into extreme profit for the capitalists. For this reason, consumption of oil is promoted and encouraged, despite the fact that the world’s oil supply is being rapidly and permanently depleted.
In California, the cheapest gasoline prices usually ranged from $3 to $3.30 a gallon in 2006. In other words, filling an 18-gallon tank cost around $60. A worker earning the minimum wage can barely afford these prices. Although cheaper than California, gas prices were not much better last year in other states.
Today, five major corporations dominate the U.S. oil and gas industry: ExxonMobil, ChevronTexaco, ConocoPhillips, British Petroleum and Royal Dutch Shell. There are a number of smaller—though still very rich—companies, but the Big Five dominate.
In 2004, these five controlled 48 percent of domestic crude oil production, 50.3 percent of domestic refining capacity and 61.8 percent of the U.S. retail gasoline market.
War and profits
The criminal U.S. war of aggression against Iraq has been a huge boon to the oil monopolies over the past four years.
A largely hidden way in which the working class subsidizes the oil industry is the military budget. A central objective of the war in Iraq and the U.S. military occupation of the Persian-Arabian Gulf region is control of the area’s petroleum resources, an estimated 70 percent of the world’s total. U.S. oil monopolies, especially ExxonMobil, are the prime beneficiaries of this strategy, with their British and Dutch junior partners getting cut in. In other words, it is the same Big Five.
The war in Iraq has led to the privatization of the Iraqi nationalized oil industry.
The 1958 Iraqi Revolution nationalized the country’s oil resources as it broke away from British colonialism. After the shock-and-awe invasion of Iraq by U.S.-led forces in 2003, the oil industry has now fallen into the hands of the Big Five.
While they pretend that their actions are dictated by the energy needs of the world’s people, the oil companies and their partners in the big banks and military-industrial complex are really the biggest enemies of the working class here and around the world.
Only a powerful workers’ movement, independent of the interests of the tiny billionaire elite, can win a real solution to the deepening energy crisis and super-profits. That solution will begin with short-term measures—price controls, investigations, taxes and fines on the Big Five oil monopolies.
Such measures would immediately pose the broader challenge—the socialist expropriation of the oil and gas industry. Only then will it be possible to assure that the global energy resources are used in a sustainable way to meet the needs of the world’s people.
