Robert Menendez

US Senator for New Jersey
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Menendez, Democrats: Super Committee Must End Super Subsidies to Big Oil

November 2, 2011

With the per-gallon price of gas well over $3.40, the five Biggest Oil companies made over $33 billion in earnings for the third-quarter of 2011, bringing their overall earnings for 2011 to over $100 billion.     Americans want to know why they are expected to sacrifice to lower the deficit while the Big 5 rake in billions of dollars in subsidies that pad their already record profits.  It’s time for Big Oil to pay their fair share to reduce the deficit and invest in America.  The Super Committee needs to end these Super Subsidies.

Washington - U.S. Senator Robert Menendez (D-NJ) joined House and Senate Democrats and leaders of conservation groups to call on the Joint Select Committee on Deficit Reduction – the Super Committee – to end subsidies for Big Oil as part of any proposal to reduce the nation’s deficit. 

“This is not class warfare. This is common sense. We want the oil companies and their shareholders to do well, but we should not be spending 21-billion-taxpayer-dollars to unfairly reward their tremendous success,” said Menendez.  “We’re simply looking for a little fairness.  We’re here today to say that super-oil’s super subsidies should be targeted by the Super-Committee – and ended now.”

Big Oil’s 2011 Quarterly Profits

Company

Q1: 2011 Earnings (billions)

Q2: 2011 Earnings (billions)

Q3: 2011 Earnings (billions)

Total (billions)

ConocoPhillips

$3.00

$3.4

$2.6

$9.00

Exxon Mobil

$10.65

$10.68

$10.33

$31.66

Chevron Corp

$6.21

$7.73

$7.83

$21.77

Shell

$6.93

$8.0

$7.24

$22.17

BP

$5.48

$5.31

$5.14

$15.93

Total (billion):

$32.27

$35.12

$33.14

$100.53

 

Source: Corporate Quarterly Earnings Statements

 Chevron Corp. said its third-quarter earnings more than doubled despite lower production, becoming the latest oil company to show the benefit of higher crude prices… California-based Chevron reported a quarterly profit of $7.83 billion, or $3.92 a share, up from $3.77 billion, or $1.87 a share, a year earlier. [Wall Street Journal, 10/31/2011]

  • Chevron CEO Chief Executive John Watson confirmed Wednesday that his company plans to spend about $5 billion a year to repurchase its shares.  [Fox Business, 10/19/2011]

 Last week Royal Dutch Shell PLC announced $7.24 billion in third quarter earnings, surpassing last year’s third quarter total by more than 42%.  [Royal Dutch Shell Press Release]

 Exxon Mobil reported quarterly earnings of $10.33 billion on Thursday, a surge of 41% from a year earlier. [CNN, 10/27/2011]

  • During the third quarter of 2011, Exxon Mobil Corporation purchased 72 million shares of its common stock for the treasury at a gross cost of $5.5 billion. [Exxon Press Release, 10/27/2011]

 In 2010, ExxonMobil’s effective tax rate was 18% while the average household paid 21% —15% more than Exxon’s tax rate. [Washington Post, 05/11/2011]

 Last week, ConocoPhillips reported third-quarter earnings of $2.6 billion. [CononcoPhillips Press Release, 10/26/2011]

  • During the third quarter of 2011, ConocoPhillips repurchased approximately 46 million of its own shares, or 3 percent of shares outstanding, for $3.2 billion. [CononcoPhillips Press Release, 10/26/2011]

 In 2010, ConocoPhillips' Chairman and CEO James Mulva received a 25-percent hike in compensation, netting him $17.9 million.  Meanwhile, retired former President John Carrig received a $14.4 million pay package. [Houston Chronicle, 07/25/2011]

 Last week, oil giant British Petroleum PLC announced third quarter earnings of $5.3 billion beating  analysts' estimates by about $300 million.  Earnings were 75% higher than third quarter 2010 when it dealt with expenses related to the Deepwater Horizon disaster. [BP Press Release, 10/25/2011]

  • BP has only paid out roughly $7 billion of the $20 billion fund set up to pay compensation claims to economic victims in Gulf of Mexico for the deadliest oil spill in U.S. history. [AFP, 10/13/2011]

 Tax subsidies for Big Oil “have helped make the oil industry one of the most profitable, when measured by cash flow and return on investment.” [Washington Post, 05/11/2011]

  • Ex-Shell CEO Says Big Oil Can Live Without Subsidies - “In the face of sustained high oil prices it was not an issue—for large companies—of needing the subsidies to entice us into looking for and producing more oil.” [National Journal, 02/11/2011]

 Former Exxon CEO Says Big Oil Tax Subsidies Make No Difference – “`I don't think our company asked for any incentives for exploration,’ Lee Raymond, then Exxon Mobil's chairman, said at a Senate hearing last year. ``As far as my company is concerned, it doesn't make any difference if they're there or not.''’ [Bloomberg, 05/19/2006]

 In 1984, Ronald Reagan proposed eliminating the very same tax subsidies for Big Oil that Republicans now protect. [Washington Post, 05/11/2011

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