Oil profits soar as Senate considers domestic drilling

John Dimsdale Jul 27, 2006

KAI RYSSDAL: Wrap your minds around this. In the time it took me to speak those two sentences, Exxon Mobil made $6,600 — $1,318 profit free and clear every second. $10.4 billion was the second-quarter take for the world’s largest publicly traded company. Exxon, as we all know, makes its money in oil. And with gas prices rising complaints about those big profits came in almost as fast as the money did. From Washington, Marketplace’s John Dimsdale has more.

JOHN DIMSDALE: Exxon’s not alone with what some claim should be an embarrassment of riches. Shell, BP and ConocoPhillips all reported big profits this week.

But Tyson Slocum with consumer advocate Public Citizen says those companies aren’t doing anything to wean us off their product.

TYSON SLOCUM: The biggest investment ExxonMobil made was in stock buybacks to make it better for shareholders and top executives. But consumers are left holding the bag.

Energy consultant Phillip Verleger says energy alternatives are not the oil companies’ business.

PHILLIP VERLEGER: What we do not want is for Exxon to go off and start pursuing new technologies. They did that once, they weren’t successful. What we want Exxon to do is find oil. If they find the oil, and add refining capacity, we’ll have lower gasoline prices.

Exxon’s earnings report coincides with the start of Senate debate on a bill to open up areas of the Gulf of Mexico to drilling for domestic oil and natural gas. Public Citizen’s Slocum says oil company profits can change that debate.

SLOCUM: I do think yet another record breaking quarter for ExxonMobil is going to start to build some momentum in Congress and elsewhere to start holding these oil companies accountable. Because we need to start investing billions in alternative fuels and energy efficiency and renewable energy.

Sponsors of the Senate bill want to first encourage more domestic production. They hope they’ve crafted a compromise with reluctant coastal states by offering to share more than a third of the federal royalties from new drilling. A vote on that compromise could take place early next week.

In Washington, I’m John Dimsdale for Marketplace.

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