Exxon Profits Soar: Why Big Oil Is Booming
So the Big Oil juggernaut rolls on. Yesterday Exxon Mobil announced profits of $10 billion, up 41 percent from a year ago. And this is despite a fall in oil production and a decline in prices.
There are lots of things to say about this. But clearly, whatever President Obama has done in his three years in office to “end the tyranny of oil” (as he put it in 2008) hasn’t hurt Exxon Mobil. The tyranny remains a hugely profitable enterprise and is likely to remain so for years to come.
To understand why, you just have to look at how the world is organized. It’s commonplace to say that we are addicted to oil, but it’s almost impossible to grasp how deeply this addiction is embedded in our lives – and our political system.
One good indicator of this is energy subsidies. Subsidies are hugely important; they represent America’s de facto energy policy. Recently, House Republicans have made a big deal about Solyndra, the California-based solar company that went bankrupt after getting $535 million in loan guarantees from the Obama administration. Republicans want you to think that we are going broke because we’re giving away tax dollars to solar-energy companies like Solyndra, which, they suggest, are run by Communist treehuggers bent on destroying America. Corporations like Exxon Mobil, on the other hand, earn $10 billion in 90 days because they are good old-fashioned capitalists reaping the rewards of hard work.
Such bullshit. If you think Wall Street firms have it good, you haven’t looked closely at Big Oil. Over at Grist, David Roberts tries to come up with a full accounting of just how heavily our political system is weighted toward fossil fuels. It’s an impossible task, but Roberts comes as close as anyone has to nailing it.
Even by the simplest accounting, our political system remains heavily slanted toward Big Oil and Big Coal: 70 percent of government energy subsidies goes to fossil fuels, while only 10 percent goes to renewables (the other 20 percent supports nuclear energy). Total amount of fossil-fuel subsidies in the last 60 years: $594 billion.
But that’s a small part of the story.
The biggest tab the public picks up for fossil fuels has to do with what economists call “external costs,” like the health effects of air and water pollution. And these can be huge: One recent analysis found that coal-generated electricity imposes more in public health costs than the electricity is worth on the market. And what about the $3 trillion or so we’ve spent on the wars in Irag and Afghanistan? How much of that should be charged off to underwriting our dependence on oil? What about the economic costs of climate change – of adapting to rising seas and increasing storm surges and drought-related crop failures?…