There's More To Exxon's Record High Profits Than Meets The Eye - KLTV.com - Tyler, Longview, Jacksonville |ETX News

07/31/08 - Tyler

There's More To Exxon's Record High Profits Than Meets The Eye

$1,500 a second.

That's basically how it breaks down for Exxon-Mobile, who just reported a record quarterly profit.

Some east Texas drivers say it's almost like pouring salt in an open wound, since they are already frustrated with high gas prices. But as KLTV 7's Courtney Lane explains, it's not necessarily the oil companies as it is our lack of them.


The numbers confirm big oil is big booming business.

Exxon Mobile, for example, reported a record profit of $11.68 billion this quarter.

While this is a lot of money, it's nothing compared to what Exxon pays in taxes, more than $30 billion this quarter.

"This profit represents about 9 cents out of every dollar of sales. But the company pays 17 or 18 cents in taxes for every dollar it sells."

Congress has been drilling oil company execs, and many criticize them for not investing more money into alternative fuel development.

But economics professor Dr. Tim Kane of the University of Texas at Tyler says that's not in the oil companies' job description.

"That would be like criticizing Colonel Sanders for not going into the hamburger business. They're completely different businesses."

Dr. Kane says the longer we rely on foreign oil, the futures market will keep prices at the pump on the rise.

But it's not the oil companies who are to blame.

"It is a convenient scapegoat, but I think we need to remember that the oil industry operates under a very stringent set of rules and regulations. And when you consider how many regulations they have to deal with, what parts of the country are they not permitted to drill in, they've really done a remarkable job of satisfying our demands to drive the kinds of vehicle we want to drive and to heat our homes."

Instead of pointing the finger at oil companies, Dr. Kane says we need to take action.

He says efforts like trading in gas-guzzlers for fuel efficient cars, supporting alternative fuel research, and domestic drilling are the only ways to bring down prices.

"When you consider many of the oil imports we buy come from countries that are not favorable to us, a lot of that oil money that goes overseas is ending up financing terrorism around the world. Anything we can do to reduce their income would be in our interest."

And, high gas prices are almost a catch-22 for oil companies.

While Exxon raked in $10 million selling oil, they made less than half this quarter in their refining business. That's because they have to buy more crude oil than they sell.

Courtney Lane, reporting. clane@kltv.com

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