August 1, 2008

Obscene Oil Company Profits Cost Rhode Islanders at the Pump, says Whitehouse

Mr. WHITEHOUSE: Let me begin by saying, as we leave for our August recess very shortly, what a pleasure it has been for me to serve with the distinguished senator from Utah on the Judiciary Committee during these first months of my first term in this body. I would respond to what he has said by suggesting that if he and his colleagues would actually let us lead, we would be able to solve a lot of the problems that he discussed and that were indicated on those graphs.

But instead of letting us lead, they have embarked on a strategy of creating gridlock in this institution with, I think at this point, we’re [at] 92 or more filibusters, which is the world record in the history of this country and climbing. And I think what has happened to this body is that my colleagues on the other side have made the decision that the record of George Bush is hopeless, the Republican message is shot, and their only salvation is to call down a pox on both our houses and try to disable this institution, try to prevent us from doing essentially anything.

It also has the added benefit of allowing the Executive more leeway, and it confers more power on George Bush, which I think is a mistake, given the way the record has shown his judgments have worked out. For instance, take a look at what has happened in the Bush economy, every day getting worse and worse.

Since George Bush and Dick Cheney took office in 2001, wages in America have remained stagnant, as the very distinguished senator from Ohio knows very well; wages in America have remained stagnant, oil and gas prices have risen sharply and troubles in the housing market have made it harder and harder for families to stay in their homes.

One would not have thought very long ago that America was a country in which tens of thousands of Americans would be thrown out of their own homes. But there we are.

Even those well enough off to own stock have seen the consequences of the Bush economy. In the Clinton years, the Dow Jones industrial average climbed 129%*. In the Bush years it has climbed exactly 0.7%. I ask my colleagues on the other side of the aisle whether they think their investor friends would prefer 129% capital gains and then paying a fair tax on those capital gains, or whether they’d prefer having big fights about what the capital gains tax rate is but nobody makes any money?

While American families and American workers struggle in the Bush economy, there is one special, favored industry that is laughing all the way to the bank. Eight years of two oil men in the White House has brought over $4-a-gallon gasoline for American consumers, and absolutely grotesque profits for the biggest oil companies. Yesterday, once again, the largest of these international giants — ExxonMobil — announced record-breaking profits. ExxonMobil’s second-quarter profits were the highest in the company’s history. They were the highest in the history of the entire oil industry. In fact, Exxon’s $11.7 billion profits for this last quarter were the highest corporate profits in the history of the United States. These profits indeed are the highest in the history of the universe, as we know it.

Think about that. $11.7 billion in just three months. The Department of Transportation, the United States Department of Transportation, estimates that there are 250 million passenger vehicles in the United States. Exxon’s $11.7 billion second-quarter profits amount to a quarterly tax of $47 on every car and truck in the country, and that’s just for one quarter.

If you’ve ever wondered where the $60 or the $80 or even the $100 that it might cost to fill up your tank goes, take a look at this. Gas prices are definitely going up, no doubt about that. We all experience the pain at the pump. But compared to how gas prices are going up, look at what’s happening to oil company profits. As gas prices have risen, oil company profits have soared. If Exxon continues to reap profits at this level, in 2008 alone you will pay for every car a $188 oil profits fee to ExxonMobil per car. $188 for every car in America, just for the profit. And that’s not counting the hundreds of billions of dollars in profits raked in by the four other major international oil companies that are doing business in our country.

Mr. President, we’re facing a true energy crisis but instead of working with us to solve it, our colleagues on the other side of the aisle continue to fight for oil company profits. Drilling off our pristine coasts — and I come from the Ocean State of Rhode Island — won’t produce a drop of oil for a decade and won’t significantly lower gas prices even then. These facts have no effect on our colleagues. But make no mistake about it. More drilling means higher profits for Exxon, higher profits for Shell, higher profits for B.P., and higher profits especially for Dick Cheney’s former employer, Halliburton, which provides drilling products and services.

Exxon is committed to an oil economy that has no future for this country. They earned $11.7 billion in profits in the last three months but in the four years between 2003 and 2007 Exxon spent just $20 million on research and development of alternative and renewable transportation fuel technologies. $20 million in four years is $5 million a year. $5 million a year is $1.25 million a quarter. If you compare $1.25 million a quarter to $11.7 billion in profits what you find out is that for every $10,000 in profit that ExxonMobil makes, it spends $1 on alternative fuels.

Now, I’m sure in Ohio you are seeing the same advertisements that we’re seeing in Rhode Island. Wonderful Exxon ads with scientists and molecules telling us how they are investing in the future. $1 for every $10,000 they put in their pockets. A recent Wall Street Journal article reported that the big oil companies spent $52.5 million on advertisements to burnish their images in the first quarter of the year. That’s an annualized rate of $200 million in ads, and of course many of them were these environmental ads: “we’re green now, just watch us.” Well if you assume that of that $52.5 million, just a quarter of it was Exxon, that’s $12.5 million. And if you assume a quarter of that $12.5 million was spent on “green” ads and the rest was other stuff, that’s $3 million. That means they spend three times as much advertising their green research than they do actually doing their green research. It is the biggest sham in the world, and I hope when Americans see these ads in their magazines and as they go by, they know that they’re being had. $1 in research, $3 in advertising about it, and $10,000 in profits. That’s the ratio. That’s not a ratio anybody should be very proud of.

If only Exxon and the other oil giants would devote some of their advertising budgets to research and development, we might be better off.

Well, we do not need sham solutions. We need results. Yesterday, I signed on to a letter authored by our assistant majority leader, Senator Durbin of Illinois, to request that President Bush release about 10 percent, or 70 million barrels, from our strategic petroleum reserve. That sale would immediately lower gas prices and would generate over $8 billion, money that could be used to invest in alternative sources of energy for real, not the phony show that the ExxonMobil’s are putting on, so that we can finally move away from our oil addicted economy. But, so far, no action. Indeed, yesterday, we tried to pass a Defense Authorization bill to support our troops in the field in harm’s way. And the Republicans voted against the bill abandoning our troops for big oil. Big oil is making big money and that’s the Republicans’ priority. I urge President Bush to end the rhetoric, put the troops first, get off of big oil’s wagon and let’s get together to solve this problem for real. I thank the chair, and I yield the floor.

* Note: this figure is incorrect; it should be 219%.