There is an urgent need on the part of analysts, think tanks, politicians and so on to say something about virtually everything. That is the only explanation for the statement yesterday by Daniel Weiss, Senior Fellow and Director of Climate Strategy at the Center for American Progress, in the wake of ExxonMobil's enormous fourth quarter profits.
The Center was set up by former Clinton White House Chief of Staff John Podesta. The idea behind it was to match the conservative think tanks that have been partisan yet primary intellectual generators of ideas for many years: the Cato Institute, the Heritage Foundation, etc. Podesta's view was that the American left had nothing similar.
But if Weiss' statements are any indications, the views on ExxonMobil's profits -- just over $40 billion for the quarter, $2.13/share, well above the consensus target of $1.95 -- might as well have come out of the AFL-CIO.
Maybe Weiss knew he had little to say, which is why he kept it brief. "In 2007, ExxonMobil made a world record profit and all we got was $3 per gallon gas," he said in his statement. "High oil and gas prices have lined ExxonMobil's pockets, courtesy of American families paying near record gas prices."
"President Bush spent his presidency defending big oil, and it has paid off. In December, he killed tax incentives for wind and solar power, alternative fuels, energy efficiency, clean coal, and cleaner cars all to prevent the elimination of a measly $1 billion in annual big oil tax loopholes. In 2007, ExxonMobil and the other big four oil companies are likely to make a combined profit of at least $120 billion. President Bush's defense of big oil is shameful."
A few things:
--ExxonMobil has said repeatedly that the tax breaks in question do not benefit the company. Even if that $1 billion was taken off the $120 billion that Weiss estimates will be total profits of the five biggest companies -- ExxonMobil, Shell, BP, Chevron and ConocoPhillips -- it has a minuscule impact on earnings. Weiss sort of concedes this by using the word "measly."
--No president can kill various tax incentives alone. It takes Congressional approval to make this happen. But there are a variety of incentives in the energy bill of 2007, passed by the Congress and signed by President Bush. It's full of renewable mandates, tighter automotive mileage regulations, building and lighting standards, and so on. And if all the outcomes desired by Weiss and others weren't in the final bill -- the Senate did not approve as many new regulations as the House of Representatives did -- what does any of this have to do with ExxonMobil's earnings? If ExxonMobil had earned $20 billion instead of $40 billion, would the energy bill have looked different?
--If you really like wind, solar and renewables, you should actually like "near record gas prices," as Weiss refers to them. There is a significant amount of venture capital money at work trying to crack the vault on new energy technologies. What was the incentive to do that back in 1998, when the US was enjoying average retail gasoline prices near $1? If prices were to fall back to $1.25 or $1.50 -- highly unlikely, but nonetheless -- there isn't enough government money under any party's rule to replace the private research that's going on now, research that's being spurred because of those prices.
--If you're going to try to set up a new left-leaning paradigm of commentary and perspective, wouldn't it be nice if views on energy could progress beyond the whole "gasoline prices are high, and oil companies are bad" school of thought?
Leave a comment