Gas prices still high, heating bills doubled, Exxon posts record profits. WTF?

Someone please explain to me why gas prices are still so high and home heating bills were doubled at the start of the year when companies like Exxon are pulling in record profits:

IRVING, Texas – Exxon Mobil Corp. posted record profits for any U.S. company on Monday — $10.71 billion for the fourth quarter and $36.13 billion for the year — as the world’s biggest publicly traded oil company benefited from high oil and gas prices and demand for refined products. The results exceeded Wall Street expectations.

The company’s earnings amounted to $1.71 per share for the October-December quarter, up from $8.42 billion, or $1.30 per share, in the year ago quarter. The result topped the then-record quarterly profit of $9.92 billion Exxon posted in the third quarter of 2005.

Exxon’s profit for the year was also the largest annual reported net income in U.S. history, according to Howard Silverblatt, a stock market analyst for Standard & Poor’s. He said the previous high was Exxon’s $25.3 billion profit in 2004.

Note this wasn’t record earnings, but profits—the bit that’s left over after you get done paying for everything to run your business. There’s a related poll at asking readers if they think oil companies are price gouging. Not surprisingly 92% of respondents so far have answered “yes.”

20 thoughts on “Gas prices still high, heating bills doubled, Exxon posts record profits. WTF?

  1. Here are some facts:

    The price of oil in Los Angeles has risen over the past 19 years an average of 4%. The inflation rate over the same period was 3%. The rates are not that high.
    (Sources: US Bureau of Labor Statistics, 2005 and US Department of Energy, 2006)

    Reducing dependence on oil will help—a little. Driving alternative fuel vehicles is only the start.

    Look around you. How much plastic and rubber do you see? That’s all oil, baby.

  2. What Bryan and DoF said.
    Gas costs around twice as much in Europe as in America- currently $4.50 a gallon in Austria, for instance.  Imho, it should be even more expensive, and part of the price should subsidise ecological repair and research.

    Sure the profits are obscene.  That is a legitimate issue, and I also think that the greedy corporations should be drawn and quartered, I mean made accountable to the public.

    But cheaper gas is not going to help encourage the transition away from fossil fuel.  If we want to avoid the worst of the crunch as oil disappears, we’d better start putting more time and money into developing alternatives.

  3. I’m with Les on this one.  Gas prices havn’t risen for any other reason then we (the consumer) are paying for it.  Then again, it’s not like we are all going to wake up on Tuesday and decide not to use our cars, so the oil co’s have us by the short and curlies.

    I’ve always wondered why we couldn’t all decide not to buy gas from ONE specific company.  For instance, if we avoided buying gas from all Mobil   supplied stations then after a solid month or two prices would miraculously come down.

    This seems (to me) to be a realistic approach that would work- after all, the consumer DOES have power if they use it.  Rather then asking people to use less gas or change driving habits, but rather to place more thought into where (or what company) our dollar goes to should be A. easy, and B. effective.

    Just my 2 cents, though.

  4. Gas costs around twice as much in Europe as in America- currently $4.50 a gallon in Austria,

    *coughs gently into hand*.  Uhm, yes, but you guys also have this thing, if I’m remembering correctly from my days in England, called. . . (oh shit, what was that. . . right on the tip of my tongue. . .  oh, oh, oh!  Now I remember. . . )

    Public Transportation!

    Granted, we have a few cities with some decent public transport systems.  Seattle, San Francisco,  (New York?).  But I’ve never seen undergrounds and trains and busses that were as efficient and common as they are in Europe. 

    Public transport in a place like, say, Sacramento, is. well, with the exception of light-rail, a joke.  Always late, always packed, always an experience in—will I make it to my job without being puked on or mugged—?

    Also, there’s some pretty different lifestyles in parts of Europe.  Shops close early, and people leave work in time to -walk- to a local store, and buy fresh produce that they’re going to use in their dinner, that night.

    Here, that can be pretty rare.  The nearest grocery store to me is an Albertsons.  It’s two miles away, down an expressway.  I think it’s pretty darn funny that there’s a two foot wide bike and pedestrian lane right next to the expressway.  60 mph traffic on one side, and a steep drop into a swampy field on the other.  People wouldn’t be safe in that lane if it weren’t for that substantial, painted white line that the city painted on the asphalt to keep traffic from ‘borrowing’ some of your walking space.

    Yeah right.  If I need produce, I’m driving.  If I need exercise, I’ll do it somewhere safe, like inside.

  5. First of all, does anybody know what happened to Norwegianity?

    Second, I said the same thing on my new blog, but in more detail.  Hopefully you don’t mind me sharing.

    I remember when high gas prices was actually a vulnerability for a president.  Now we’re getting gouged more than at any time in history, and nobody seems to hold the President accountable for anything.  Bush shows the opposite of leadership, and nobody even cares.  I say somebody needs to call him out on this stuff.  The answers we’re getting are total BS.

  6. Given these record breaking profits does it not seem a bit cheeky that Exxon are asking for a reduction in the punitive damges for the Alaskan oil spill?
    I thought punitive damges were linked to company value as much as the need to compensate victims.
    Or are they completely seperate issues?

    Exxon plea

  7. Nowiser- what you said.  Right now I’m in California, and I’ve borrowed a pickup from my sister-in-law so I can get around.  Sure, I can take Bart to the City from here (I’m in El Cerrito, for anyone who knows the Bay Area).  But even in SF, public transportation is a joke compared to Europe- expensive, infrequent, far apart…  So instead of standing on street corners yelling about the need for public transportation, I meekly get into my borrowed Dodge and step on the gas.  At least I can walk to Safeway from here.

    I should perhaps clarify what I said earlier.  I didn’t mean to give the impression that obscene profits are okay because we need to stop using so much oil anyway- they are separate issues.  But conserve we must, sooner or later.

  8. The only reason Europe has public transportation is because gasoline prices have been high there for years. So they adapted by building trains and subways.

    Exxon only made 9% on its money last year…That is not that much. If you spent $10 one day and got a 9% return you would end up with $10.90. Should that be illegal? I think not, especailly when the state government gets 8.25% for sales tax, the fed gets over 30% for income tax, and 30% of the price of gas is tax. Refiners make on average $.10 per gallon. Exxon holds less than 1% of the worlds proven reserves…do you really think they carry as much clout as OPEC which has 4000% as much oil as Exxon? Global warming is a joke. I have spoken with geologists with PhD’s from University of Texas (a liberal school) on the issue, there was a time in the Permian age when 95% of marine and 70% of animal life on earth died due to extreme heat, and most of the world was desert… That was 250 million years before cars were around. You cannot look at the last 200 years and notice a degree of difference and immediately assume we will all die and the earth will start boiling, it was initially a lava covered planet anyway. Weather recording instruments were different, and not near as accurate in the late 1700’s, and the Earth is 4,500,000,000 years old…200 years/4,500,000,000 years = 0.0000000444%. You cannot look at such a small fraction of earth’s lifetime and get a clear picture. I know that environmentalists will bring up these sacred ice cores that go back 15,000 years. Once again…15,000/4,500,000,000 = 0.00000333 %. There was an Ice Age 10,000 years ago, and the same activists talking about global warming were talking about global cooling in the 1970s. Oh well its hard to win with jerks like Al Gore making movies. Give your response on this…or add something or whatever…I would like to talk to some liberals/environmentalists on this issue. See, we’re not all closed minded right winger numbskulls…email me at if you agree or not, and if you know an Exxon hating liberal send this to them. Thanks.

  9. Brandon writes…

    The only reason Europe has public transportation is because gasoline prices have been high there for years. So they adapted by building trains and subways.

    That’s certainly part of the reason, but not the sole reason. It also helps that a lot of European countries are rather small compared to the United States.

    Our second largest state, Texas, is over three times the size of the island of Great Britain (268,581 square miles vs 84,400), twice the size of Poland, and just under twice the size of Germany. Even the state I live in, Michigan, is bigger than the island of Great Britain at 97,990 square miles. Then when you add up all the states the total size of the country is 3,718,711 square miles. This limits the practicality of nation-wide mass transit quite a bit—short of air travel at least.

    The rest of your comment was almost comprehensible.

  10. Hey Brandon, thanks for joining the discussion.  I am sure you will have some valuable insights.

    First, if you want to have a discussion, let’s have it here in the open, not in email. 

    Second, activists say this, and activists say that, but I am much more interested in what scientists say.  You know, the guys who go out into the field, dig up the evidence, do the radiometric isotope analysis, fly through hurricanes, etc, feed what they learn through supercomputers to tie it all together, and then get together to tear apart each other’s findings until what’s left is as solid as they can make it.

    Third, the ice cores you are referring to go a lot farther back than the last 15,000 years.  There are really good sequential cores going back 600,000 years and the Japanese have some million-year-old cores.  That’s longer than the current ‘model’ of our species has been around.

    Fourth, we are really only interested in the last 400 million years or so, and we have atmospheric analysis going back farther than that using a variety of methods.  Not with the precision of ice cores, but close enough for broader trend tracking.  Then the last 600,000 we have good ice core records, not dependent on the accuracy of weather recording instruments in the 1700’s.  There are other modalities as well, including coral coring, tree rings, etc.

    I don’t know if you read the other comments but most of us here don’t have a problem with Exxon making a profit.  But environmental responsibility is just a cost of doing business and we do get tired of resistence to that.  Our atmosphere is a shared resource; it is not fitting for giant industries to use it as a sewer when there are solutions that can be implemented.

    Incidentally, the Permian extinction could have been due to lots of things; volcanism-induced climate change, an asteroid impact, or little green men.  We are looking at not being the cause of a mass extinction ourselves.  You know, “Subdue the Earth and replenish it”.

  11. The only reason Europe has public transportation is because gasoline prices have been high there for years.

    Public transportation in Europe predates the automobile.

  12. The only reason Europe has public transportation is because gasoline prices have been high there for years. So they adapted by building trains and subways.

    One of the reasons that the US has very little effective mass transit is that the US automotive and related manufacturers had very deep pockets in the 1960’s and lobbied the US government to build more highways.  This massive highway building did at least three things; it took money away from mass transit, the highways made it difficult to walk or bicycle, and the distances that have to be traveled, caused by the resulting urban sprawl, has caused residents to become dependant upon private automobiles. 

    After the end of World War 1, a consortium of manufacturers including GM, started buying up the electric trolley car systems in the US.  The electric trolleys were then replaced with buses and the electric trolley lines were paved over.


    In 1949, GM, Firestone, Standard Oil, Phillips Petroleum, and Mack Trucks were all found guilty of violating anti-trusts laws, in a conspiracy to kill off the trolleys. They were all fined US$5,000, and the various corporate heads were fined US$1 (one dollar) each.

  13. and the distances that have to be traveled, caused by the resulting urban sprawl

    By the way, around here we see signs of urban sprawl reverting. Everything within a ten minute drive of downtown is suddenly red hot real estate.

    Your analysis is almost certainly correct and in part, the German Autobahn is to blame.

    One public transport paradise I’ve lived in was Switzerland.

  14. How can we blame the German Autobahn?  If the US had a mother, I can imagine her saying; “If Germany jumped off a cliff, would you jump off a cliff too?”

    I had forgotten about the GM & friends’ lobbying to trash the trolleys.  Ahh, what’s good for GM…

    Why don’t they teach stuff like that in History class?  It would help people be a bit less trusting of giant corporations, government, etc.

  15. How can we blame the German Autobahn?

    Well, the Interstate system is but a cheap copy of the Autobahn that Adolf built and G.I.‘s got to know and enjoy after the war. It’s an insiduous weapon, isn’t it? wink

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