Just today, we learned that Exxon Mobil made nearly $12 billion last quarter. Think about that – 12 billion dollars. No U.S. corporation has ever made that much in a quarter. But while big oil is making record profits, you are paying record prices at the pump, and our economy is leaving working people behind. For far too long, we've had an energy policy that has worked for the oil companies – I think it's time that we had an energy policy that worked for the American people, and that's a change that we can't wait any longer to make. [Emphasis mine]While Exxon Mobile did make record profits this past quarter, what Senator Obama fails to inform you is they paid Ten Billion, Five Hundred Twenty-Six Million Dollars in Federal Income Taxes ($10,526,000), and TOTAL TAXES of Thirty-Two Billion, Three Hundred Sixty-One Million Dollars ($32,361,000) We also should not that Exxon Mobile has an effective Tax Rate of 49%. [Source: Exxon Mobile Press Release]
All this proves is that Figures don't Lie, But lairs do figure. A more honest way to look at Exxon Mobile Profits is Profit Margin. In other words how much did Exxon Mobile Make as a percentage of Gross Sales. Exxon Mobile had Gross Receipts of $138,072,000. Using the Net Income of $11,680,000, that's a Profit Margin of 8.46%.
A Profit Margin of 8-10% is comparable to other US Companies. It is only because the Net Profit actual dollars is such a large number that we cringe at the sound of $12 Billion. Remember that Exxon Mobile had Income of One Hundred Thirty-Eight Billion, Seventy-Two Million Dollars. This Company is enormous, but getting to keep ONLY 8.5% of Gross Earnings is not the cause of our gas prices. Nor is this Profit Margin out of line. There is no price gouging here.
If you wish to blame anyone for the high Gas Price, blame our Congress and the Oil Producing Countries. Saudi Arabia, Russia, Mexico, Iran, etc are the the ones making the money. Congress by not allowing Domestic Production and the Producing Countries by keeping it in the ground. It is a Supply and Demand issue. More Supply would drive the price down quickly. In fact just the announcement that US Domestic Production will have the restrictions removed would have an immediate effect and result in lower pump prices.
It is true that we cannot drill our way out of Foreign Oil Dependence, but it is also true that we could bring the pump price down by producing from the KNOWN DOMESTIC RESERVES in the US. Some of the areas would take 5-10 years to come on line, BUT there are areas which could be producing in 9-18 Months. We know the Oil is There and we know how to get it, but Congress will not allow the Oil Companies to drill for it.
It is ironic and a Democratic Disgrace that Cuba is allowing China to drill for Oil in the Gulf of Mexico only 60 miles from Florida, while Our Congress prohibits US Oil Companies from doing the same.
There is one other factor to be considered however. With ever increasing demand, refinery capacity will also be a factor in Demand. We have not increased Refinery Capacity in over 30 years. Soon even if we increased production, refinery capacity would not be able to meet demand.
Currently alternative energy production is not cost effective. Nuclear Energy is our best bet, but until we develop the technology to produce alternate fuels like Ethanol from something other than Food Stocks, Oil, Gas, Coal and Nuclear are the best sources for current energy needs. This will not change in the short term.
Our money (Tax Dollars) in the form of Tax Subsidies and Tax Credits are best spent on research and development of alternative energy sources. Tax dollars should not be spent propping up economically costly methods of energy production.