The Chicago Tribune published a paid advertisement on the Op-Ed Page of its October 31 edition (Sect. 1, p. 19):
“Oil and Apples,” ExxonMobil, Chicago Tribune, October 31, 2005
Word-for-word. The bar diagram too. Exactly as you find ExxonMobil’s “Oil and Apples” advertisement here, was how readers of the Chicago Tribune found it on the Trib‘s Op-Ed Page last Monday.
Nevermind that, were the banking sector earning 19.6 cents per every U.S. dollar of sales during the second quarter of 2005, then this sector would be grossly over-profited and debauched.
Nor for that matter were the oil and natural gas sector earning slightly below the purported average for all major U.S. business sectors during the same quarter (7.7 cents to 7.9 cents, just sticking to the advertisement’s assertions). All this would mean is that capital in general is capturing an inordinately large slice of the American Pie—as is witnessed by the relative declines the U.S. population has suffered these past 30 years in just about every index of social and human development and well-being one cares to mention.
Instead what interests me at the moment is the decision on the part of the editors at the Chicago Tribune to publish this paid advertisement by ExxonMobil on the Trib‘s Op-Ed Page.
Isn’t this the same ExxonMobil that as recently as one week ago today, October 27, released—not its second-quarter profit estimates, but its third-quarter profit estimates, which showed the company’s profits soaring “by a whopping 75% to $9.92 billion U.S., beating the oil industry’s previous earnings record of $8.42 billion U.S., posted by Exxon in the fourth quarter of 2004,” as the Toronto Sun was to report the affair?
The Washington Post reported last week that “ExxonMobil, in newspaper advertisements and in the usually rah-rah forum of the earnings conference call with Wall Street analysts, [has] sought…to demonstrate its bottom-line modesty.” Indeed it has. My question is, why did the Chicago Tribune decide to help ExxonMobil carry out this public-relations task? And why did the Trib decide to let ExxonMobil do it on the Trib‘s Op-Ed Page?
Now. When the editors at the Chicago Tribune decided to publish ExxonMobil’s paid advertisement, either they acted freely or they reached their decision under some form of duress.
If they acted under duress, they ought to have said so—right up front and in the light of day.
But if they acted freely, they ought to be ashamed of themselves. ExxonMobil suffers from no lack of access to the public realm, such that it requires special access to one or more Op-Ed pages at major American newspapers to make its case on behalf of its great and noble cause. Its modest bottom-line in particular.
One may also write to:
Ann Marie Lipinski, Editor
R. Bruce Dold, Editorial Pages Editor
Don Wycliff, Public Editor
“Exxon Mobil Corporation Announces Estimated Third Quarter 2005 Results,” News Release, ExxonMobil, October 27, 2005
“Trib Taking a Hard Look at Holdings,” Jeremy Mullman, Crain’s Chicago Business, October 24, 2005
“As oil profits soar, scrutiny rises,” Ron Scherer, Christian Science Monitor, October 27, 2005
“Durbin’s Statement on Big Oil’s Staggering Profits,” Sen. Richard Durbin, October 27, 2005
“Oil Giants Reap Sky-High Earnings,” Charles Stein, Boston Globe, October 28, 2005
“Activists tap into growing reserves of anger,” David Litterick, Daily Telegraph, October 28, 2005
“Green Groups Call for Windfall tax,” Damien Reece, The Independent, October 28, 2005 [See below]
“Frist Calls for Hearings on Fuel Profits,” Richard Simon, Los Angeles Times, October 28, 2005
“Big Rise in Profit Places Oil Giants On the Defensive,” Jad Mouawad and Simon Romero, New York Times, October 28, 2005
“Oil Profits Sky-High,” Linda Leatherdale, Toronto Sun, October 28, 2005 [See below]
“Alternate energy not in cards at ExxonMobil,” James R. Healey, USA Today, October 28, 2005
“Backlash Spreads as Profits Surge at Oil Companies,” Jeffrey Ball et al., Wall Street Journal, October 28, 2005 (as reproduced in the Pittsburgh Post-Gazette)
“Oil Industry Seeks to Cast Huge Profits as No Big Deal,” Terence O’Hara, Washington Post, October 28, 2005
“Exxon profit tops [U.S. $10bn] as oil price soars,” Sheila McNulty, The Australian, October 29, 2005
“Big oil has explaining to do,” Editorial, Denver Post, October 29, 2005
“Dorgan and Dodd Will Ask Senate to Enact Windfall Profits Tax on Big Oil Companies,” Sen. Byron L. Dorgan, November 1, 2005
“Sky-high profits see oil chiefs called to Capitol Hill,” Stephania Kirchgaessner and Holly Yeager, Financial Times, November 2, 2005 [Also see below]
“Oil’s gain is consumers’ pain,” Sen. Byron L. Dorgan, USA Today, November 2, 2005
FYA (“For your archives”):
The Independent (London)
October 28, 2005, Friday
SECTION: First Edition; BUSINESS; Pg. 63
HEADLINE: GREEN GROUPS CALL FOR WINDFALL TAX AS SHELL REPORTS RECORD EARNINGS
BYLINE: BY DAMIAN REECE CITY EDITOR
Royal Dutch Shell is facing calls for a windfall tax on oil companies’ profits after announcing a 68 per cent increase in third-quarter earnings to $ 7.4bn ( £4.1bn).
A record quarter for oil prices helped Shell deliver results that beat City expectations but prompted the ire of environmental groups and politicians.
Shareholders will benefit from Shell’s performance to the tune of $ 15bn, which the company is returning to investors this year in the form of share buy-backs and increased dividends. Jeroen van der Veer, the chief executive, said: ‘Our operational performance is paying off with good results.’
The US Energy Secretary, Sam Bodman, said oil companies such as Shell and Exxon Mobil ” which also announced record profits yesterday ” should react to rocketing oil prices by improving their supply. Mr Bodman told the Senate’s energy committee: ‘These companies are turning in record profits. They have a responsibility to expand refining capacity.’
Exxon Mobil said its quarterly profits ballooned by 75 per cent to $ 10bn. Shell said its record financial results included the costs of the recent US hurricanes in the Gulf of Mexico which were expected to land it with a $ 350m bill, although most of this is insured.
Environmental campaigners used the Shell results to pressure the Government into levying a windfall tax on oil companies, which it said were making money from the deteriorating climate of the planet.
Craig Bennett, a campaigner with Friends of the Earth, said: ‘Shell is profiting from climate change, profiting from pollution and damaging the lives of communities around the world. This is simply unacceptable for a company that claims to be responsible. The Government must not sit back and let this happen. It must curb oil company profits, but also demand higher standards from UK companies operating overseas.’
The stock market shrugged off concerns that the Treasury may impose a one-off tax on Shell and BP. Shell shares rose up to 1.8 per cent during the day, finishing 0.5 per cent higher at 1,702p.
Shell’s fortunes this year, on the back of soaring oil prices, are in marked contrast to last year when it was embroiled in a reserves reporting scandal that plunged into one of the worst periods in its long history. The scandal cost Sir Philip Watts his job as chairman and the company was ordered to pay fines of $ 120m in the US and £17m in the UK. The company agreed to pay $ 90m in damages to US employee shareholders who brought a class action lawsuit against the oil giant.
Shell was able to put further distance between itself and last year’s scandal yesterday with results showing that it had generated $ 10.5bn of cash from its operations during the third quarter, an increase of 34 per cent. The company is pumping 3.5 million barrels a day, which it said will increase only marginally next year, dashing hopes of any significant increase in supply in 2006.
Earnings per share from the company in the quarter rose 69 per cent to $ 1.35 compared with a year ago.
The Toronto Sun
October 28, 2005 Friday
SECTION: BUSINESS; Pg. 72
HEADLINE: OIL PROFITS SKY-HIGH;
LED BY EXXON MOBIL — FIRST COMPANY IN U.S. HISTORY TO RING UP SALES OF $100B US
BYLINE: BY LINDA LEATHERDALE, BUSINESS EDITOR, TORONTO SUN
Face it: If you want to get rich, you have to go to Alberta.
There, not only is the oil patch gushing again in record profits — but can you believe it, it’s also where 17 oil and gas workers won the jackpot, a record $54.3 million in Lotto 6/49 winnings.
Betcha they’ll never worry about household bills again.
But, not here in cold Ontario, where we’ve turned up the furnace and are now trembling in fear about out-of-sight home heating bills, after the bank account’s been emptied by gouging pump prices.
Well, this won’t make your day — unless, of course, you’re a shareholder.
The world’s oil giants yesterday were reporting their highest profits ever, with Exxon Mobil Corp., which owns Imperial Oil here in Canada, becoming the first company in U.S. history to ring up sales of $100 billion US.
Now, don’t drive off the road. Exxon’s third-quarter profit soared by a whopping 75% to $9.92 billion US, beating the oil industry’s previous earnings record of $8.42 billion US, posted by Exxon in the fourth quarter of 2004.
Wouldn’t it be nice to get a 75% hike in your paycheque?
Royal Dutch Shell was also basking in new record highs. Its third-quarter profit jumped 68% to $9.03 billion US, compared with a profit of $5.37 billion a year ago.
This follows surging profits for BP and ConocoPhillips.
Here in Canada, Petro-Canada — our homegrown oil giant which taxpayers paid billions to form — reported a gusher third-quarter profit, too.
The Calgary-based giant had net income of $614 million or $1.19 a share, up from $410 million or 77 cents a share from July to September, 2004.
Cash flow surged to $1.06 billion, up from $869 million, even though production of crude oil, natural gas and gas liquids was down 3% to average 422,000 barrels of oil a day.
A 7% drop in downstream petroleum product sales, like jet fuel, heavy fuel oil and asphalt, was blamed on the closing of Petro-Canada’s Oakville refinery.
And despite a 33% slump in production caused by a fire, Suncor’s third-quarter profit was $341 million, up from $337 million a year ago.
Now, get a load of this.
Petro-Canada CEO Ron Brenneman says there’s no rebellion at the pumps yet, though “demand destruction” could happen in the long term.
No rebellion? How about the thousands and thousands of protest coupons demanding a rollback of high gas taxes at the pumps — where Ottawa is reaping a windfall in taxes, especialy the GST, a tax on tax.
How about the thousands and thousands of angry emails and letters from cash-strapped Canadians, begging for a new probe in possible price collusion.
Bottomline is consumers are being held hostage. For many, buying gasoline and heating homes are not options — they’re necessities of life. We can try to cut back and become energy efficient, but if the weather turns bitterly cold, what are we to do? Freeze in the dark?
Meanwhile, secret industry memos from oil giants, like Exxon, and uncovered by Washington, allege a conspiracy to reduce refinery capacity to boost prices.
Yesterday, U.S. Energy Secretary Sam Bodman had harsh words for the industry: “These companies are turning in record profits — they have a responsibility to expand refining capacity,” Bodman told a Senate Energy Committee hearing.
- – -
If you’re a shareholder, you’re sharing in the loot.
Yesterday, on Bay Street, Suncor shares were up 16 cents to $61.21 and Petro-Canada shares rose 63 cents to $41.23.
In New York, Shell’s shares jumped $1.15 US to $60.65, but Exxon’s shares fell 60 cents to $55.60.
Oil prices were up 43 cents US, with a barrel of light sweet crude for December delivery fetching $61.09 US, while analysts speculated we’re in for a cold winter. Yikes.
NEW ROUND OF GUSHER PROFITS
Third quarter profits 2005 2004
Exxon Mobil $9.92B US $8.42B US
Royal Dutch Shell $9.03B US $5.37B US
Petro-Canada $614M $410M
Imperial Oil $652M $544M
Suncor $341M $337M
Financial Times (London, England)
November 2, 2005 Wednesday
USA Edition 2
SECTION: FRONT PAGE – FIRST SECTION; Pg. 1
HEADLINE: Sky-high profits see oil chiefs called to Capitol Hill
BYLINE: By STEPHANIE KIRCHGAESSNER and HOLLY YEAGER
Top executives at some of the biggest oil companies in the US have been summoned toWashington to answer increasingly hostile complaints from lawmakers that the energy industry is enjoying record profits at the expense of American consumers.
Lee Raymond, Exxon Mobil’s chairman and chief executive, James Mulva of ConocoPhillips, and Shell USA president John Hofmeister have agreed to testify before two Senate committees next Wednesday, a Senate spokesperson confirmed.
They are expected to face sharp questioning about rising energy prices and to explain whether their companies will use record third-quarter profits to invest in additional resources that could lower prices in future.
The decision to call Mr Raymond and other executives to Washington underscores how the high cost of petrol and home heating oil has become a top concern for lawmakers in recent weeks.
The public hearings are likely to provide more drama than substance: lawmakers appear to be seizing on the energy issue because – unlike the war in Iraq or recent Washington scandals – it offers an easy opportunity to show they are acting on voters’ concerns.
Some Republican senators will face a tough balancing act, criticising oil groups while maintaining their traditional pro-business and anti-regulatory stance.
“Oil companies have failed to tell us and show us what they are doing with these profits that justify them. Normally, business doesn’t have to (justify profits) . . . but when prices remain so high and do so much damage . . . then it seems that they owe us an in depth analysis,” said Pete Domenici, Republican chairman of the Senate energy committee, which will join with the commerce committee for the hearings.