Big Oil's Big Profits

The following is an excerpt from an article in the Huffington Post:

The sputtering economy, high unemployment rate and punishing gas prices are taking a huge toll on average Americans, but at least somebody is doing well: The Big Five oil companies this week announced they had made a whopping $36 billion in profits in the second quarter of 2011.

According to second-quarter earnings reports, ExxonMobil alone made $10.7 billion in the most recent three months. That's a 41 percent increase over the same period last year and a 161 percent increase over 2009.

Shell nearly doubled its profits year over year, taking in $8.7 billion in the second quarter. Chevron's profits were $7.7 billion, up 43 percent. BP earned $5.6 billion, a far cry from its $17.2 billion loss a year ago. Only Conoco Philips, with $3.4 billion in earnings, posted smaller profits than a year ago, dropping 18 percent due to the jettisoning of some Russian assets.

A good chunk of these profits is coming right out the pockets of the American public, thanks in part to astronomical gas prices and to $4 billion to $8 billion a year in deficit-increasing tax subsidies that oil companies continue to get, long after the incentives those subsidies were designed to create ceased to make economic sense.

Rather than invest their profits in such things as product development, new facilities, hot talent or research — things that could create jobs, improve consumer offerings and accelerate alternative energy production — three of the five big oil companies are spending large amounts of that money buying back shares of their own stock.

[T]he oil and gas industry is enormously powerful on Capitol Hill, spending over $1 billion in lobbying since 1998, according to opensecrets.org.

And the Big Five oil companies have already spent $75 million in lobbying just through first half of this year. That seems like a lot, until one considers that it amounts to about one-tenth of 1 percent of their profits.