Exxon’s Huge Profits

As was reported earlier this month (for instance, in this New York Times story), Exxon Mobil made humongous profits in 2007, amounting to $40.6 billion. Higher prices for oil led to the increase, although Exxon has been making tons of money for a while. Two divergent responses to such news are possible. On the one hand, we might think that succes for an American business is a great thing, that Exxon Mobil clearly provides a desired commodity. On the other hand, we might feel anger that Exxon is profiting from the financial hardships of many Americans who are squeezed at the pump as well as the Iraq war, which has destabilized international markets and thus contributed to the increase in oil prices.

Predictably, Exxon has pointed out (in the story linked above) that they bear huge costs for exploration, which is, they say, crucial as the global demand for energy increases. Other defenders have brought up the taxes that such large corporate incomes generate. The argument, it seems, is that Exxon’s success is our success, because it will guarantee continued supply and also because Exxon pays a lot of money back to the government.

On the other side, critics point out that the success and wealth of Exxon, the government, and corporate America haven’t been trickling down to the rest of us. Robert Scheer writes:

The lifeline of Exxon is not its oil-drilling skills but rather the power of the US government, particularly the military, that can be marshaled to intimidate those nations that would dare challenge Exxon’s right to profit exorbitantly. Whether it’s about pushing for a pipeline crossing Afghanistan or tying up Venezuela’s foreign assets in international courts, as Exxon managed to do last week, the US-based oil giants strut with the full confidence that Uncle Sam will back them up.

All of this indicates a vicious cycle, wherein Exxon’s profits and taxes benefit the American government, which then acts around the world to protect Exxon’s interests. Making this observation doesn’t mean we are wandering into conspiracy theory territory at all.

On top of all of this, global climate change is a real and imminent problem. Carbon emissions from human-created sources are causing it. Given this, it isn’t necessarily a good thing that Exxon is exploring for more oil–we should spend money to find other energy sources, not more of the same.

The arguments of the defenders fail to engage with the reality of our situation. The fact of Exxon’s huge tax bill doesn’t make our government policies better, and the fact that they feel compelled to undertake expensive oil exploration doesn’t mean that such exploration is a good idea. The success of private companies must be contextualized before it can be thought good or bad. In the context of this nation, where people have no choice but to consume oil, where there is no way for them to find better prices from competitive sellers, and where the price of oil has been rising because of the actions of the government, the success of Exxon should be seen for what it is: the successful extraction of money from all Americans for the purpose of continuing our insane addiction to oil.

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