STWR - Share The World's Resources

5th Feb 07 - Foundation for Taxpayer and Consumer Rights

Exxon, Shell and Marathon Oil Slashed Q4 Refining Margins to Temporarily Lower Pump Prices, Group Says

Exxon set the record for the largest annual corporate profit of $39.5 billion last year even with a 4% decline in fourth-quarter profit resulting in part from an 18% drop in refining margins, according to the company's profit report today. Shell, the world's second largest oil company, set a company record earning $25.4 billion in 2006 but also announced a 23% decline in refining margins. Pump prices have increased dramatically in recent years following industry wide increases in refining margins.

The Foundation for Taxpayer and Consumer Rights (FTCR) said today's earnings reports show that industry leaders cut domestic refining profits in the run-up to the November election in order to lower gasoline prices, very likely hoping to influence the mid-term election. The nonpartisan group is calling for Congressional investigations to determine whether Exxon and others manipulated the market to effect the election.

Read FTCR's early analysis of how oil companies could have wielded gas prices for political impact http://marketplace.publicradio.org/shows/2007/01/02/PM200701026.html

FTCR noted that, despite the temporary and limited relief of election season pump prices, the record annual profits of Exxon and Shell show once again that last summer motorists were the victims of one of the greatest rip- offs of all time when gasoline prices topped $3 per gallon. The industry has long claimed that gasoline pump prices are attributable to external factors such as the price of crude oil, but today's profit data make it clear that high gasoline prices are directly tied to oil company decisions.

"The proof in Exxon's profit report is that oil companies are robbing Americans blind and that the companies can have tremendous influence over gasoline prices at any time they want simply by taking a little less in profits," said FTCR President Jamie Court. "That's a very different portrait than the industry paints of being captive to global economic forces. Congress needs to hold hearings and ask company executives under oath about whether Exxon's sudden profit drop in the fourth quarter was based on a political motivation and subpoena company documents to determine the root of the change."

Similar Results Throughout Industry

Marathon oil, the fifth largest U.S. refiner announced today a 30% drop in refining margins and an overall 4th quarter decline in profit. Still, the company announced a 75% increase in profits over 2005. Last week Conoco Phillips announced a 16% drop in fourth quarter profits. Like Exxon and Shell, the decrease in profits and gasoline prices in October and November, were easily offset for these companies by the enormous refining margins and high pump prices of prior quarters.

Exxon Produced More Gasoline in 4th Quarter, Made Less Money

According to its earnings report, Exxon increased its refinery throughput (thus producing more, cheaper gasoline for motorists) in the fourth quarter by 10% over the fourth quarter of 2005 year, even though annual refinery throughput actually declined from 2005 to 2006. Although Exxon refined and sold substantially more gasoline in the fourth quarter than in prior quarters, the company's quarterly income associated with refining and sales were $327 million dollars less than in the third quarter of 2006 and $409 million less than the second quarter, during the height of driving season and the 2006 price spike. This provides more evidence that the oil industry manipulated the available supply of gasoline in order to lower prices last autumn.

President's Announcement on Strategic Petroleum Reserves Helped Industry

After President Bush promised in his State of the Union to double the size of the U.S. Strategic Petroleum Reserve, oil prices shot up faster than after Katrina. FTCR has questioned whether Bush was pumping up oil prices for companies that dropped gasoline prices in the run up to the Nov. election. See FTCR's analysis after a similar profit report by Conoco Phillips http://www.consumerwatchdog.org/energy/pr/?postId=7320.

The Foundation for Taxpayer and Consumer Rights is a nonpartisan, nonprofit organization. More information is available on the web at http://www.consumerwatchdog.org.

CONTACT: Foundation for Taxpayer and Consumer Rights

23rd Jan 07 - John Hanchette, Niagara Falls Reporter

OLEAN --We will return this week to a subject once much-ignored but previously explored in this space, the "income gap" or "CEO excess" in corporate remuneration. These days, columnists and reporters all over the country are writing about it on a daily basis.

First, a few stark statistics:

In 1965, my first year out of college, I found myself working for New York Telephone, a subsidiary company of AT&T, which at the time enjoyed a government-guaranteed monopoly. My salary was $7,900 a year, then considered a princely sum. In that year, chief executive officers -- CEOs -- of American corporations made, on the average, 24 times more than the ordinary working stiff in the United States. I didn't complain. Nobody did. In those days, CEOs were considered worth every penny for running such huge firms that underpinned the U.S. economy.

From Iraq to Nigeria, multinational corporations are ignoring human rights, entrenching a culture of abuse and impunity that is difficult to eradicate, a leading anti-apartheid activist warns.

Yuva, 11th Jan 07 - Market Dynamics Blog

Almost everyone except Bush agrees that the Iraq War is illegal & immoral. The economic/oil interest was underplayed by the Bush government and the US military invasion resulted in pushing the corporate globalization agenda without restoring Iraq or providing Iraqis with fundamental necessities such as water and electricity.

The goal of the Bush Administration, as stated in the economic orders already enacted in Iraq is to, "transition Iraq from a ... centrally planned economy to a market economy." This goal is explained even more clearly by BearingPoint, Inc. - the Virginia based corporation that has received the $250 million contract to facilitate this transition. The contract states: "It should be clearly understood that the efforts undertaken will be designed to establish the basic legal framework for a functioning market economy; taking appropriate advantage of the unique opportunity for rapid progress in this area presented by the current configuration of political circumstances... Reforms are envisioned in the areas of fiscal reform, financial sector reform, trade, legal and regulatory, and privatization." Transformation of an occupied country's fundamental laws is illegal not just under international law & conventions but also, the U.S. Army's own code of war - stated in the Army field is "The Law of Land Warfare."

Philip Mattera and Charlie Cray,  21st Dec 06 - TomPaine.com

The midterm election demonstrated a deep dissatisfaction with the Bush administration’s handling of the war and with the cornucopia of corruption that infected the Republican-controlled Congress. Yet it was more than a partisan victory for the Democrats. It also represented a popular backlash against business-friendly policies that have left many Americans behind. 

The new Congress faces a staggering list of corporate abuses that have been ignored by lawmakers for years—including executive pay levels that remain out of control, rampant contract fraud and war profiteering in Iraq and at home, widespread corporate tax avoidance, the offshoring of well-paying jobs, and the shredding of health, safety and environmental standards. It’s enough to keep many congressional committees working overtime for years.

Debra Eschmeyer, 13th December 2006

Most everyone has been told to not play with his or her food, yet somehow agribusiness is playing Monopoly with the nation's food supply.

When pouring your next glass of milk, consider who decided what the cow ate and who controls the distribution of profits. One would think the farmer and consumer take the lead roles in managing the supply of safe and healthy food. The farmer should control his or her business while mainly battling unpredictable weather --- expecting the price they receive for a quality product to be set by a fair and honest marketplace.

However, in today's market, the lack of competition is wielding just as much force as Mother Nature as witnessed by the recent proposed acquisition of the Chicago Board of Trade by the Chicago Mercantile Exchange (CME) to become the CME Group Inc. --- combining the two largest U.S. futures exchanges.