Post by jgaffney on Aug 14, 2008 14:58:52 GMT -5
Charlie Gibson interviewed Rex Tillerson about the profits of Big Oil. It was actually quite informative and balanced coming from the MSM.
Here are some points Tillerson made:
It is important to know that Exxon's profits (which were around 10%) went to three areas:
1) Investment in fresh traditional energy reserves
2) Investment in alternative energies
3) Stockholders who are mainly large institutional investors funding pensions and endowments
I think it is a safe assumption that Exxon can use their monies to bring benefit to the consumer and investors better than the government can with any windfall tax.
I wish someone in the media would have the courage to ask the next politician who advocates a windfall tax how the government efficiently spending the $4000/second they currently make off of Exxon.
Finally, think about this disparity.... The government who carries no invested risk with Exxon currently makes almost 3x as much income as profits paid to risk-carrying investors.
Something to mull......
Here are some points Tillerson made:
ExxonMobil CEO and chairman Rex Tillerson defended his company's staggering $11.7 billion in profits for the second quarter, saying that the company's earnings reflected the magnitude of its business operation. "I saw someone characterize our profits the other day in terms of $1,400 in profit per second. Well, they also need to understand we paid $4,000 a second in taxes, and we spent $15,000 a second in cost," Tillerson told ABC News' Charles Gibson. "We spend $1 billion a day just running our business. So this is a business where large numbers are just characteristic of it."
When asked about the fragility of the global market to geopolitical developments across the world, especially in oil-rich nations such as Saudi Arabia, Tillerson suggested that energy diversity provides security. "I think the response to that is to have as many diverse supplies of energy as possible. And that means both in terms of geographic diversity. You want to expose yourself or certainly have access for the American people to as many different geographic sources of supply as possible. So the disruption in one area does not leave you ... hostage to any one area." Last week, Obama called to "end the age of oil in our time," claiming that the United States could produce enough renewable energy to replace all U.S. imports of oil within 10 years. But Tillerson said that "it's going to be very challenging to achieve that goal, in that period of time. And again, so many of the energy issues that the United States deals with and the world deals with, people I think do not have an appreciation for the lead times that are required."
"We can't drill our way out of this problem, just like we can't conserve our way out of this problem, just like we can't alternative fuels our way out of this problem," he said. "There is no one solution to this; there's an integrative set of solutions. And you have to undertake them all. So when the whole debate focuses around we have to choose this one solution or that, people are missing the point." Tillerson stressed that energy policy is bigger than any one candidate, and "for people or policymakers to pick one as being the winner is really shortsighted," he said. Policy must instead be a comprehensive, long-term approach. "And that does get to the question of are we doing everything here at home that we could be doing. And I think most people have come to the realization that, for many, many years, the United States has not fully developed its own natural resources."
Tillerson sees ExxonMobil as more than an oil company -- more of an energy company that provides natural gas and coal while exploring alternative, renewable fuels and nuclear power. He said that the company is investing $100 million in a pilot plan to examine a new technology that can separate CO2 from gas streams. "For ExxonMobil to make a meaningful difference, we've really got to find a way to change those technologies to provide those alternative forms of energy on a much larger scale and at a cost that people can afford," Tillerson said. "It doesn't do the consumer a lot of good to substitute an alternative fuel that costs $5 for gasoline that costs $4." Tillerson explained that the percentage of funds invested in alternative energy does not compare to the amount invested in stock buybacks for company shareholders, because "we haven't found an alternative to invest in that makes a lot of sense for us."
When asked about the fragility of the global market to geopolitical developments across the world, especially in oil-rich nations such as Saudi Arabia, Tillerson suggested that energy diversity provides security. "I think the response to that is to have as many diverse supplies of energy as possible. And that means both in terms of geographic diversity. You want to expose yourself or certainly have access for the American people to as many different geographic sources of supply as possible. So the disruption in one area does not leave you ... hostage to any one area." Last week, Obama called to "end the age of oil in our time," claiming that the United States could produce enough renewable energy to replace all U.S. imports of oil within 10 years. But Tillerson said that "it's going to be very challenging to achieve that goal, in that period of time. And again, so many of the energy issues that the United States deals with and the world deals with, people I think do not have an appreciation for the lead times that are required."
"We can't drill our way out of this problem, just like we can't conserve our way out of this problem, just like we can't alternative fuels our way out of this problem," he said. "There is no one solution to this; there's an integrative set of solutions. And you have to undertake them all. So when the whole debate focuses around we have to choose this one solution or that, people are missing the point." Tillerson stressed that energy policy is bigger than any one candidate, and "for people or policymakers to pick one as being the winner is really shortsighted," he said. Policy must instead be a comprehensive, long-term approach. "And that does get to the question of are we doing everything here at home that we could be doing. And I think most people have come to the realization that, for many, many years, the United States has not fully developed its own natural resources."
Tillerson sees ExxonMobil as more than an oil company -- more of an energy company that provides natural gas and coal while exploring alternative, renewable fuels and nuclear power. He said that the company is investing $100 million in a pilot plan to examine a new technology that can separate CO2 from gas streams. "For ExxonMobil to make a meaningful difference, we've really got to find a way to change those technologies to provide those alternative forms of energy on a much larger scale and at a cost that people can afford," Tillerson said. "It doesn't do the consumer a lot of good to substitute an alternative fuel that costs $5 for gasoline that costs $4." Tillerson explained that the percentage of funds invested in alternative energy does not compare to the amount invested in stock buybacks for company shareholders, because "we haven't found an alternative to invest in that makes a lot of sense for us."
It is important to know that Exxon's profits (which were around 10%) went to three areas:
1) Investment in fresh traditional energy reserves
2) Investment in alternative energies
3) Stockholders who are mainly large institutional investors funding pensions and endowments
I think it is a safe assumption that Exxon can use their monies to bring benefit to the consumer and investors better than the government can with any windfall tax.
I wish someone in the media would have the courage to ask the next politician who advocates a windfall tax how the government efficiently spending the $4000/second they currently make off of Exxon.
Finally, think about this disparity.... The government who carries no invested risk with Exxon currently makes almost 3x as much income as profits paid to risk-carrying investors.
Something to mull......
