ExxonMobil’s earnings: The real story you won’t hear in Washington

Update: ExxonMobil posted its second-quarter 2011 earnings on July 28. Take a look at “ExxonMobil’s earnings, and America’s bottom line” for the latest information and discussion about ExxonMobil’s earnings.

Big numbers make headlines – like our announcement of $10.7 billion in earnings for the first quarter of 2011. What may not make the headlines is the context surrounding that number, so I thought I would share with you what I told reporters following the announcement:

When crude oil prices increase it means higher earnings for oil companies, and more importantly for most Americans – higher gasoline prices. Rising crude and gasoline prices have a very real impact on household budgets across the nation. Gasoline is an essential product, and price rises are felt by families and businesses alike.

Let me start by putting our earnings into context for U.S. motorists.

ExxonMobil’s earnings are from operations in more than 100 countries around the world. During the first quarter, more than three-quarters of our operating earnings came from outside of the United States.

The part of ExxonMobil’s business that refines and sells gasoline, diesel and other products in the United States represents less than 6 percent – or 6 cents on the dollar – of our earnings.

Why so little? Because we actually buy more crude oil to refine into gasoline and diesel in the U.S. than we produce ourselves. And these purchases are made on the open market at the prevailing rates.

During the first three months of this year, for every gallon of gasoline and other products we refined and sold in the United States, we earned about 7 cents. Compare that to the 40 to 60 cents per gallon that went from gasoline consumers to the government (state and federal) in gasoline taxes.

The underlying question people are asking is: Why are oil prices so high at the present time? The answer to this question is important because the price of crude oil accounts for most of the price of gasoline.

There are several factors involved in the rise in oil prices.

First, as a result of the global economy strengthening – particularly in countries like China, India and Brazil – demand for crude oil is on the rise.

Second, political instability in some oil-producing regions is contributing to uncertainty about future oil supplies. Oil markets are well-supplied today, but the issue is this: What will it cost to replace this supply if it is lost in the future? This uncertainty about tomorrow is reflected in prices today.

Finally, another factor behind higher oil prices is unique to the United States. And that’s the weak U.S. dollar.  Oil and most other food and industrial commodities are invoiced in dollars. Accordingly, when the dollar goes “down” the price of primary commodities tend to go “up,” and vice versa.

The dollar is at a three-year low against other currencies and is approaching the record low which occurred in 2008, when oil prices were at historically high levels.

The dollar’s decline accelerated last week after a warning by Standard & Poor’s about the country’s $14.3 trillion debt and economic weakness compared to other countries.

So these factors all combine to drive oil prices up.

What is our government doing about it? Unfortunately, they’re reaching for the political playbook rather than seeking real solutions.

We understand that it’s simply too irresistible for many politicians in times of high oil prices and high earnings – they feel they have to demonize our industry.

Predictably last week the Administration established a task force to investigate oil and gas markets, now a time-honored tradition when prices increase.

And we’re seeing a return to the now-familiar misinformation about the oil industry’s taxes.

Over the last week as earnings season has approached, the Democratic Party leadership again talked about removing what they call $4 billion in oil industry subsidies. But what they really mean is that they want to increase our taxes by taking away long-standing deductions for our industry while leaving these same deductions in place for other sectors of the economy. The simple truth is that these are legitimate tax provisions to keep U.S. industry internationally competitive – to keep jobs from being exported to other countries.

Unfortunately, this false discussion about oil industry subsidies also reinforces another falsehood making the rounds:  that ExxonMobil doesn’t pay its fair share of income taxes in the United States.

Let me state it unequivocally. Last year, our total taxes and duties to the U.S. government were $9.8 billion, which includes an income tax expense of $1.6 billion. Over the past five years, we incurred a total U.S. tax expense of almost $59 billion, which is $18 billion more than we earned in the United States during the same period.

And during the first quarter of this year, we incurred tax expenses in the United States of more than $3.1 billion on U.S. earnings of $2.6 billion.

So we have seen the predictable political positioning but no action to actually help bring down energy prices. In fact the government has chosen not to help increase supply by refusing to open up the vast energy resources in this country that are off limits to our industry.

We have seen exploration and development in the U.S. Gulf of Mexico – which accounts for 30 percent of all U.S. crude oil production – effectively banned for the past year by the Obama Administration.

In addition, legislation was enacted targeted at restricting the supply of oil from Canada – a country whose oil reserves are second only to Saudi Arabia’s.

Unfortunately, irresistible sound-bite politics rather than sound public policy is dominating the energy agenda in Washington – but there is one reason for optimism about America’s economic and energy security.

That optimism lies in America’s extraordinary natural gas endowment. This resource is providing the United States with an enormous economic advantage as a result of American ingenuity and innovation.

It’s nothing short of revolutionary that our industry has recently unlocked more than a 100 years’ worth of natural gas right here in the United States. And at some of the world’s lowest prices – last month natural gas was selling for 40 percent less in the U.S. than in Europe.

Think of the advantages this is already providing – in the form of power generation and fuel for manufacturing and other industries, not to mention the jobs and taxes natural gas production creates.

But there are concerns that political overreaction to a small number of isolated environmental issues could jeopardize this emerging industry and the benefits it provides.

Government policies did not cause the shale gas revolution in this country – but they could stop it in its tracks.

Policymakers need to look carefully at the facts and avoid a bias against natural gas and fossil fuel development in favor of far more costly energy sources that are already receiving massive subsidies.

In fact, we’ve already spent more on alternative energy subsidies than we did on the Manhattan and Apollo projects combined.  And what do we have to show for it? Unreliable and uneconomic energy sources that still can’t compete – even at today’s prices.

On the other hand, natural gas is affordable, available – and doesn’t need taxpayer subsidies.

The technologies and industrial processes involved in developing shale gas are proven – the industry has successfully fracked more than a million wells over the last 60 years. There are thousands of feet of rock between the natural gas deposit where the fracking takes place and the water table.

Risk to water supplies and air quality can be and are being mitigated by using proper well design, operating with care and following industry best practices and procedures that are all subject to regulation and government oversight.

When these technologies are applied properly and the industry remains focused on operational integrity, we can protect our environment and public health and enjoy this unprecedented economic advantage.

Energy policy should enable safe and environmentally responsible development of all of America’s natural resources, which will support economic recovery and improved quality of life.

It’s time for our leaders to stop playing politics with the energy industry and to start working for solutions that will take the pressure off household budgets and enhance our energy security.


167 Comments

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  1. Mark McGwire says:

    So if it’s so awful doing business in the US and having your HQ here and not having any influence in the political process or legislators then why don’t ya move it to Saudi Arabia or Qatar wheere you won’t have to pay taxes or deal with an intrusive gov’t policy?

    • John Homman says:

      That is exactly the point! That is way so many corporations ARE running overseas. Do you realize how many jobs that will cost the US – tens of thousands… LOWER THE DARN taxes and INCREASE jobs – it really is SIMPLE math!

      • Mark Kimitch says:

        Who pays the taxes that businesses aren’t paying then? The middle class, that’s who. Unions also cost businesses more money by negotiating fair wages, so maybe we should get rid of those, too. So for the privileged of working at scab wages, the middle class also gets to pay the taxes that businesses should be paying.

        American businesses have been trading jobs for profit for decades, and recently at an alarming rate. Taxes aren’t the problem, greed is. It costs money to run a country, especially one that offers so much; it requires everyone to pitch in. If you want to go live in a country with an oppressive government, fine, be my guest. I’ll stay in America, because I enjoy freedom, and freedom isn’t free.

        • Kenneth Floody says:

          Mark – even if a corporation writes the check for the tax – they PAY no tax. It is a cost of business they pass along to you. If the gov’t told ExxonMobil to pay 10 bil in taxes, guess what happens to the price at the pump? Got it? Corporations do not actually pay taxes, consumers do by paying for higher prices. Corporations are supposed to maximize their profits to reward their investors. It has nothing to do with greed. That’s why people buy stocks. The only party exhibiting greed is the government for incessantly raising taxes without EVER trying to reduce costs.

        • C Burris says:

          The Greed here is on the Gas & Oil companies with Billions of dollars in profits (after investments even) and they aren’t creating 10′s of thousands of new jobs with that profit I assure you. The price of oil is determined by OPEC and stock trading, not how much in taxes the Gas and Oil companies have to pay (out of their rediculously high profits). In reality, the Gas and Oil companies are milking the rest of the world for something that doesn’t truly belong to them to begin with. It belongs to all of the people on this planet, so why should the big oil companies being the ones reaping huge benefits and expecting to get out of paying more in taxes. The Oil companies will get 0 sympathy from the middle or lower class American public. Period.

        • john thaller says:

          Only 11% of the workforce has unions, so I doubt there is much of an impact.

        • Joseph Case says:

          “American businesses have been trading jobs for profit for decades, and recently at an alarming rate. “

          Mark,

          What you write is strangely true. Where would you as a businessman do business? In the US, where because of tax policy and environmental paranoia you’d have to spend $59 to earn $18? You must be one of the 47% that think the Founding Fathers intended that good ol’ Uncle Sam spoon feed us all.

        • Robert Nielsen says:

          Let us understand that Corporate taxes are a costs that is passed on the the consumer! That is a simple fact, like it or not. The consumer ends up paying whatever taxes are imposed on corporations. Want lower gas prices for example, then reduce or eliminate the taxes on oil companies. Of course, that means taxes must be increseed in some other area, unless government expenditures are also reduced. Unfortunately most Americans do not understand this!

        • DK Van Ness says:

          Mark, you want everyone to pitch in, then you need to get the 51% of people in this country that don”t pay any Federal Tax to pay their fair share. When you get that done, I”ll buy in to your theory.

        • Ivan Hadenov says:

          You wonder about who pays “the taxes that businesses aren’t paying.” I would answer that with a question of my own: who determines how much needs to be collected in taxes, and from where?

          You seem to be of the opinion that, no matter how outrageously massive and wasteful our government spends our money, that “somebody” is responsible for its funding. We seem to have a lot of people who share this opinion, which is why we are $14 trillion in debt.

          Have any of you ever considered that if we simply controlled how much we spent, and where we spent it, that there may not be those pesky taxes that “businesses aren’t paying.”

          Yes, it costs money to run a country. But the cost of providing everything to everybody is beyond any country’s means. Freedom isn’t free, but too many people believe that public housing, food stamps, unemployment, and health care are.

        • Rod Anderson says:

          The only freedom you are wanting to enjoy is a free lunch!

        • Jonathan Lloyd says:

          Agree with everything except where you state “American businesses…” There are no American businesses–at least not if they are global in nature, and every large corporation is nowadays global. Ford, GM, GE, WalMart, Exxon…these are not American corporations. They would like us to think of them as American, but this is just a marketing ploy.

        • Ken Cohen says:

          Jonathan: ExxonMobil is a global company that is based in the United States. As a result, we pay billions of taxes each year to the U.S. government, employ more than 30,000 people in this country and provide billions in dividends to our shareholders, of which about 85 percent are located in the United States. We invest billions in capital projects in this country and around the world that spur jobs and economic growth.

      • mike dar says:

        What the heck does lowering taxes have to do with creating jobs? Simple math?? Corps are going overseas to avoid taxes.. as many and if at all possible ALLL taxation. Just like incorp in Delaware and have immunity as much as possible to common stockholders.
        Jobs are created in new industries, profits in old industries. New industies newly employ in greater numbers than old industries.
        Protection on a wholesale basis is safest in America’s most stable govt and dollar denomination. Taxes thru the Military protection of this society provides that.
        Taxes are intrical to the money system current to the worlds Central Bank system.
        Saying reduce taxes, even though a cyclical situation, is saying reduce the strength of the Central Bank, that collects through a number of channels, all the taxes.
        This discussion started about BP taxes,, not jobs.
        So it is not simple math.. nor about jobs.The reason this is lobbed against is simple math. New taxation rules are more expensive than old accomodated tax avenues.. BP will find a way around the expense. It won’t create jobs, won’t change anything. Reducing taxes won’t change anything. The enviroment for business creation only happens because a need occurs, AND it is accomodated.
        If anything, added costs in a business model creates change.. change that may create new jobs, here and abroad in new industies. Like the auto manufacturing sector, oil has had it’s day for white collar and blue collar job creation.
        The idea that… read more »

        …critical looks at energy industries are “recklessly criticize” is saying freedom of speech is not nesessary to having these energy industries prove up and respond. Without critical oversight, only the Bondholder, management in the companies win.

        • Doug Towns says:

          Lowering taxes means more projects make sense economically. All deal are evaluated on an after-tax basis. So if a project has an unacceptable return with a 35% tax rate, it may be perfectly acceptable with a 25% tax rate as this boosts the return by 10%. This is why low taxes matter and why they effect employment.

        • Roy Waddell says:

          One of Exxon’s top corporate officers was interviewed by Matt Lauer on the Today Show during the timeframe the govt was contemplating a gas day with no taxes applied. Lauer asked if Exxon would reciprocate. The response was that Exxon would have to actually raise their prices for that day because they owe a “fiduciary responsibility” to it’s shareholders to maximize profits. Oil companies are monopolies clear and simple. There needs to be some competition. When was the last time we saw a “gas war” where companies were “competing” for your business.

      • dave crowson says:

        But your math doesn’t work! It didn’t under Reagan and it didn’t under Bush. 5 minus 2 does not equal 7. Go back to school!

        • James Tyrer says:

          Check the math for yourself.

          After the Regan tax rate cuts, Federal revenue (as % of GDP) increased for the rest of his presidency.

          After the 2001 recession and the ‘W’ tax cuts, Federal revenue equaled the 30 year average for 2006 and exceeded it for 2007.

        • Ann Edwards says:

          James Tyrer: With all due respect. President Bush SR. sacrificed his second term to keep the Reagan “myth” in place. To seek out a second term would have meant exposing Reagan for the screw up he was by telling the country the tax breaks had not work. Instead, he was a principled man and protected Reagan’s legacy at the cost of his own.

      • Ann Edwards says:

        NO! The taxes will not be lowered for these avaricious welfare funded monster profit generating corporations. No! A thousand times NO! These guys are not creating jobs. They are relying on you continuing to believe what your overseers have been telling you all of your lives. TRICKLE DOWN does not work and has never worked. Though, you and your brethren are willing to live with your eyes wide shut and your brains forfitted, the rest of us are enduring the hardship of gasoline prices at the pumps.

        Tens of thousands of jobs lost in the face of millions outsourced because of the low wages. You were told it was because of taxes, when the truth is maximizing profits. You are selling America and we are all in a race to the bottom.

        By the way, there is not a thing in this world stopping you from following them overseas when they move.

        • Jason Collins says:

          Trickle down econonics is a bit like a fat man sitting at a banquet telling the starving child under the table to just keep waiting for a few crumbs…while over 75% of the feast goes untouched.

        • pam stemberg says:

          I don’t know if they could move. There are very few industrialized nations that will support a corporation this large pay so little in taxes. I’m sorry, I lived in Europe. I know what they charge in taxes and duties. And in many other places, they would have to take the government on as a partner or perhaps nationalize.

          No they have it really good over here, they just want more, because well, greed is good.

      • Ken Whall says:

        I”m curious about something, although the article did not touch on Job creation I am wondering how many Jobs ExxonMobile created in the US in 2010. I ask because in 2009 ExxonMobile paid no US income tax. That represented a 36 billion savings over 2008. They surely created a plethora of jobs in 2010 (not).

        Here’s a link to Forbes showing the info. Please note it is incredibly slow loading (minutes) but it will load:

        http://www.forbes.com/2010/04/01/ge-exxon-walmart-business-washington-corporate-taxes_slide_3.html

        • C F says:

          Even if the corporation didn’t pay income taxes, the people who work for the corporation (which is everyone including board members) did pay income taxes. A corporation is a separate enitity that is not a person and is not able to be wholly owned by any individual. A person can own shares of a corporation and be a board member, having voting rights based on how many shares s/he has and duties as outlined in the corporation’s legal papers, but no one can ever really own a corporation unless they want a fast ride to bankruptcy court. As a matter of fact, a board member of a corporation who owns 51% or more of the shares, when signing for the corporation signs “John Hancock, Member” never “Owner”. If a shareholder were to sign “Owner” that person could be held personally and legally responsible by any and all creditors for any and all debts owed by the corporation.

          So, add up all the income tax all the employees (including board members/shareholder’s earnings, field workers, secretaries, janitors, etc.) to see how much Exxon REALLY paid in income taxes, cuz if it weren’t for Exxon generating income, there’d be no income tax for shareholders/employees to pay. Actually a big drawback of being a corporation is double taxation. Sometimes I don’t understand what it is people don’t understand.

          Companies are responsible for paying their portion of payroll taxes which are an added expense above and beyond… read more »

          …the expense of an employee’s gross pay. The employer-portion of payroll taxes include the following:

          * Social Security taxes (6.2% up to the annual maximum)
          * Medicare taxes (1.45% of wages)
          * Federal unemployment taxes (FUTA)
          * State unemployment taxes (SUTA)

          And we haven’t even started talking about excise taxes, worker’s comp, permits, licenses, or sales tax on cost of goods to do business. Yeah, I think Exxon probably paid some taxes, to the U.S. somewhere, somehow. Just because it isn’t labeled an “income tax” doesn’t mean its not a tax–any money payable to the government in order to do business is a tax. As a matter of fact according to the article above, taxation by the U.S. actually caused Exxon’s U.S. division to lose money.

          I’m starting to wonder if some of the people who read this article might have not gotten above a 4th grade reading level, or are there really people who are so petty that they must make a monster out of a corporation that provides valuable goods, provides good paying jobs and contributes to the U.S. economy while getting nothing back from said country for it’s efforts? Who are they listening too? Are they thinking for themselves or are they aping some professor’s lunatic rantings? Do they know the definition of a useful idiot? Maybe they’re just bitter and angry because they don’t understand that they’ll never get rich if they never take a risk. So they should get off their duffs already and start their own corporation. Easy enough to do. But then they’d understand what Exxon is saying and that would be admitting defeat. Small businesses employ over half of the work force, so do something great for your country instead of just pointing fingers at shadows.

          So why is Exxon staying here? Just to be nice and so us poor suckers can have gas in our car, heat in our houses, propane in our grills and RVs I guess, cuz there’s no other reason.

          Especially when considering there are people in China and the middle east who will be glad to work 3x’s as hard as any U.S. 9-5er for 1/3 of the pay. Remember when your mom told you to eat your vegetables because there were starving children in China/Ethiopia? Same dif. Where has our work ethic gone? Apparently overseas, where the best companies have followed.

    • Joseph Vialonga says:

      I notice you have FAILED to address the contents of the article regarding the actual taxes paid by Exxon and decide, in typical liberal fashion, to attack the company itself for some imagined fault. This time it seems to be they ahve somehow dissed America by doing business overseas to a large extent.

      Were you informed just a tad more you would see the company does business overseas because it is a more favorable business environment, the same reason many American companies do business to an ever increasing degree overseas.

      In their usual destructive and America bashing way the Democrats under this woefully inadequate president are raising or attempting to raises corporate income tax levels at a time when other major industrial countries are actually LOWERING their rates (France, Germany, etc)

      The evil (in your eyes) “BIG OIL” pays MORE income taxes and has a lower average return on investment then any other “for profit” business in the world at a measly 8%. McDonalds after tax profit is generally about 15%.

      Why don’t you liberals organize a march against McDonalds, Burger King et all instead of wasting your and everyone else’s time posting your totally uninformed tripe.

      • D Vaughan says:

        I sure wish dialog on important issues like this didn’t denigrate into political name calling.

        I agree with some of your points and depend upon XOM for a significant portion of my business’s revenue. I disagree with your point about XOM doing business overseas because of a more favorable tax environment. They are overseas because that is where the oil and gas is. They don’t operate in places like Nigeria because of the tax regime. With all the corruption I am sure they would like to be elsewhere, but that is where a lot of oil/gas is located.

        There are a lot of advantages to XOM being located in the US. Low corruption, stable fiscal and legal environments, educated workers, etc. XOM has invested far more in the US in the last couple of years not because of new favorable tax treatment (ie – XTO purchase $41 bil), but because shale gas has been a huge new opportunity to add to their reserves.

        As has been pointed out elsewhere, they have an obligation to maximize their returns to shareholders. That said I know XOM recognizes the benefits offered to it by being headquartered in the US and is willing to pay a reasonable tax burden to help pay for these benefits.

        The question is what is reasonable and competitive worldwide. If we take the democrat/republican coloring out the question, it seems like something reasonable people could arrive at. In the end hopefully… read more »

        …XOM isn’t overly happy and the taxpayers aren’t overly happy. Then we will know we have a reasonable balance.

    • Ken Deardorff says:

      I’m an XOM shareholder and I’d be happy to see the company not only leave the US but refuse to sell products here also.

    • Ted Stanfield says:

      I think that was the point. Between insane regulatory burdens and incredible tax burdens there are few reasons for continuing to maintain corporate headquarters here in the US. I appreciate the few large companies that have continued support US workers and have kept their companies here. Please, dont make the situation worse than it already is. Forty years ago, most managers believed that if a company didn’t return 13% on investment, it should either be sold or dissolved. At present, there are very few businesses that even approach 5% profitability and those are hedge funds with few employees, no inventory and virtually no infrastructure beyond an office and a couple of computers.

      • Don Sea says:

        Big Oil has workers in offices, in the field, as well as out on the oceans doing what they do for the product they are in the business of obtaining, refining and selling for whatever they think they can get away with.

        The fact that they refine as much as they do in the US, at the cost that they pay their employees, when they can get the same work in a foreign country for a lot less per hour of labor, makes me wonder just what it is that keeps them here. Especially if the awful tax burdens they must put up with. Face it, there is a reason why they remain in Houston, and it’s because they are making more as it stands, and if they could save a few dollars, they would be out of here like a rocket.

        There are few, if any international corporations, no matter where they started, that have any intentions of staying someplace if they can make more/save more by relocating elsewhere.

        There is no corporate loyalty to anything other than money. None.

      • RC Bradley says:

        Would you please understand that other than Mexico an Chili (and Ireland which by the way is bankrupt) the U.S.A. has the lowest taxes of any developed country in the world. I wish you all would stop complaining about this country and see what a great job we’ve actually done supporting our companies and it’s people. We are the richest country in the world..and got that way with much higher taxes then we have now.

    • M Mac says:

      Some comments have already mentioned reality, but I’ll reiterate the point…they and other oil companies are… Look at publicly available information for where the large investments are occurring: Qatar, Nigeria, the North Slope, Singapore, Russia., etc…

      While there is some investment here, the growth markets are NOT the United States. So while Schumer, the blowhard with the Unicorn, talks about subsidies, not, are nothing more than general manufacturing tax exemptions and accelerated depreciation, those item, if removed should be removed from every manufacturer. But know our tax policy will continue to drive investment elsewhere.

      Here’s the real question, why don’t we STOP subsidizing CONGRESS and their out of control spending which has caused this addiction to US tax payers hard earned income?

    • Rodger Phelps says:

      Mark, you really do want to see the US economy go into a tail spin. That is part of the problem in this country. The general population does not understand business. Businesses keep this country prosperous and it is the businesses that employ the good old US citizenry. Let’s keep businesses healthy so that more jobs are created. The Federal government picks on the oil industry because it is their products that are so subject to drastic change. And why is this? Because we have allowed countries who detest Americans to be the provider of our oil.

    • Neal Hayes says:

      Mark, did you read the article. The U.S. needs Exxon much more than Exxon needs this regulation-crazed administration. As a stock holder I would like nothing more than to see Exxon move to a country where it is appreciated and not constantly protrayed as an evil, boogeyman, who wants to destroy the earth.

    • Jim Doster says:

      Mark,

      Let’s see if we can put it in terms you can understand. Say you own a little mainstreet store that sells widgets. You sell 114K worth of widgets. You pay 26K in taxes. And all your other expenses equal 77K. Leaving you with a little less than 11K for your efforts at the end of the day.

      Sorry, let me step a little further down for you.

      You do yard work for a client and paid $114 for the job. It costs you $77 in costs for your equipment and gas. You pay $26 in taxes. You get to keep $11 You would not be happy having $11 to yourself after paying $26 in taxes, would you?

      So, if Walmart or any company you call “friendly” nets 10% it is OK. My favorite is Obama calling evil insurance companies that are only making 3% net. Just because it is in the billions makes it a bad thing.

      But Social Ponzi Programs like Social Security, Medicare, etc. are good. Fredie and Fannie had nothing to do with the housing crash. Anytime the Govt says they will back a loan, of course a private company will loan it.

      I have seen some of these big bad oil companies do more for technology than how about the… read more »

      …half a billion we lost on the solar company in CA that obama touted. Compare the jobs that money compared to say the 80K people employeed by an evil insurance company Obama hates that takes nothing from the Govt, but gives 80K jobs, pays medical claims, etc. AND makes 5% for their investors.

      Wait, who are those investors? You and me in our 401K’s, etc. which as bad as it ever got still will do much more for us than the money we invested to medicare, social security, etc. But these people who say they are poor still drive nice cars, have cable and flat-screen TV’s and could invest as easily as those in the upper middle class.

      Hey, tax big business more and KILL the middle class who has investments and retirement betting on them. Turn this country like many others with just two classes of people.

      Common sense is lost in entitlement.

  2. Stephen Wright says:

    Excellent Information.

    In my academic environment I am always looking for the details to back up my continuous debate with those who recklessly criticize our energy suppliers. Thanks for your well written and thoughtful post.

  3. Jeff Hubert says:

    Point well taken about the percentage of earnings that comes from refining and selling gasoline. However you state 6% on this page but 3% on the Gasoline and Earnings article. Which is it?

    • Harold Hunt says:

      6% worldwide; 3% US

    • Derek Frick says:

      Both are correct.

      He was referring to 4th Quarter of 2010 numbers on the other page and 1st Quarter numbers on this page.

      Dividie US Downstream earnings by total Earnings and you come up with the numbers.

      4th Quarter 2010 Downstream earnings were about 2.4%, 1st Quarter 2011 6.5%.

      • T Porter says:

        So, Exxonmobile maybe it’s time to call a meeting with the US Congress before they call one with you and explain this to them! What a novel idea! Then we get to hear what they have to say about what you have said. If your correct, if what you are saying is true, it would seem that they would have a hard time getting re elected next year. At the very least, they would know America is listening.

  4. Blake Winthorp says:

    I ti hard not to make a case for extending the bush tax cuts as long as money is no object.

  5. Bernard Biagini says:

    You make some very good points. HOWEVER, let’s talk solutions and some counterpoints. First, your profits are a proof point that subsidies should END – period. The health of your business means they are clearly not needed. Second, while point about risk associated with unrest is real the fact is that oil is STILL flowing and any government taking over will do what they can to ensure shipments continue. These folks are not stupid. They know that securing the money from sales is needed to address some of the underlying economic iniquities that are driving the unrest. I have long maintained that speculation around anything so pervasive as oil, grain/primary foodstuffs, etc. should have speculation outlawed. Speculators exist to drive prices up or down and make money at it, whether hedging or not. They are NOT an important part of an efficient free market. Exxon and other companies should publicly come out against this practice. Next point, where is the push for a national approach to refining requirements. Individual state laws stipulating different octanes, mixtures, etc. breed inefficiencies and costs which inevitably end up costing the consumer – with marginal real gain. Also, although this is not just an oil industry issue it is real – top executives are paid WAY too much – and, yes, that does go into the prices. Justify the annual pay packages to me, please. You can not. … read more »

    …Even the share holder has to question real impact of the difference of paying, say $10 million versus $40 million. Frankly, I am supportive of crippling taxes on earnings over $10 million unless the CEO is the founder and owner – i.e. private owner of the company. Finally, your industry has a LONG and pervasive track record of pointing the finger elsewhere when it comes to prices. Intelligent people are tired of hearing another excuse…it’s always something different or pointed at the government. Hogwash! Let’s use your talk of the weaker dollar. True, the dollar is back at 2009 levels of weakness vis a vis other currencies such as the Euro. Is the cost of oil at 2099 levels? You, and I, know it is not. Please explain.

    • Mary Magdalene says:

      Well stated. Also, why aren’t petroleum companies leading the charge for renewable energies…ones that don’t destroy our planet when used? I refuse to buy Exxon products or patronize their stations due to their horrible anti-GLBT stances in the workplace…they regularly score a ZERO on the HRC Corporate Equality Index.
      This report made me laugh…but I love the honest comments being made and they allow them to stay.
      Fix your workplace environment’s treatment of gays and lesbians and you’ll be one step closer to ever getting a dollar of mine.

      • LE Doster says:

        How did GBLT work it’s way into this conversation?? This is the most inane post on this thread. Stick to the subject (if you understand it) and save the GBLT stuff for a parade placard.

      • Ray Parham says:

        Finally a reason to support Exxon and buy more products from them.

        On a serious note, very few people acknowledge (or admit) that corporations do not pay taxes. Only the consumer of their products pay taxes. The REAL answer to our quandry is to eliminate all corporate taxes and all income taxes and move to the Fair Tax (or some similar consumption tax ONLY). This will remove all incentive for corporations to leave the US, provide the ultimate incentive for corporations to move to the US, and would result in an economic boom for our economy as we would turn our trade deficit upside down.

        VOTE CONSERVATIVE IN 2012

        • John Suveg says:

          This is one of the first and workable suggestions mentioned here, I lived in georgia for several years and this is how things work down there. Everyone pays period. The IRS has been an expensive boondoggle for years. A flat consumer tax that everyone pays no exceptions.The other big problem is Democrat and Republican, we are all americans and it is high time that these people in washington understand that we put them there to represent all the people of this great country, and to set aside their party beleifs and do right for the country as a whole. For some strange reason they seem to think that once elected that gives them the right to enhance their own financial wealth at taxpayers expense.

        • Mike Henning says:

          If we move to consumption tax, it must account for investment income as a form of consumption. Someone who spends 100% of their disposable income out of necessity is taxed on 100% of thier income. Someone only needing to spend 50% of their disposable income is only taxed on 50% of their income. It is only fair if everyone pays equally, and 100% vs. 50% is not equal.

          An instance where I believe it makes perfect sense to tax businesses is in the shared use of all of our resources: Let’s say Widget Inc. has a factory in my town. Truckloads of materials come in and truckloads go out. They drive on publically funded roads. The more successful Widget Inc. becomes, the more they degrade the roads, which must be repaired. In the current tax system, their success is echoed in how much they pay in taxes. In effect, they help pay for maintaining the roads they use through their taxes. Those costs are passed on to the consumers of Widgets. Therefore, Widget buyers help pay for the roads on which Widget Inc. does business. When it comes to less tangible aspects of society, the same applies. If Widget Inc’s manufacturing practices are extremely dirty, and society decides government will help reduce the effects (waste water treatment, for example), then the people who purchase widgets help pay for the extra costs needed to ensure clean water. Without the local taxes associated with Widget Inc’s success, the local factory town would foot… read more »

          …the bill through their local consumption to be able to have clean water. With the current system, widget consumers help foot the bill for the needed cleanup they in effect create in order to own their widgets.

          It’s more complicated than that, but it’s a simple example of how taxing business affects the consumers of the products/services while not forcing people who don’t consume those products to pay for the effects of production and delivery of those specific products.

    • Peter Doyle says:

      Agree with your post, speculators are the problem, a barrel of oil is on average traded 27 times before it sold. This has to stop, earlier this year speculators were deliberately holding cocoa off the market
      just to raise the price of chocolate, these speculators are the scum of the earth

      • john thaller says:

        Remember, congress tried to regulate speculators in 2007. It was never agreed to because Bush said he would not sign the bill in to law.

        • Brian Coker says:

          What we really need is to catch up with the rest of the world and replace some or all income taxes in this country with a Value Added Tax (VAT) – that way, every time a barrel of oil is bought and then resold, it is taxed. If speculators aren’t actually adding value (and we know they aren’t), they will not be in the market for long.

        • John Fucik says:

          Perhaps our new leaders should attempt to do it now.

    • Earl Robinson says:

      Speculators do not CONTROL the market.

      The speculator has every incentive to get it right.

      If they advise that a commodity is going up, that you need to lock in a price now, let’s say for Southwest Airlines, and the price instead goes down, then the speculator LOSES huge money for his firm, and their client gets screwed for the duration of the contract they agreed to pay, despite the market price being lower.

      They don’t always get it right.
      Speculators are not masters of the universe.

      The government however DOES have the power to “fix” the game in any industry through permitting and regulation and taxation. And now with Obama, the outright seizure of corporations (GM) by spending other people’s money (our taxes) on a troubled business.

      Speculators have to work with reality, not wishful thinking.

      • John Arnold says:

        Earl,
        You have it exactly right, speculators have nothing to do with “the Problem.” It is by trading a barrel of oil 27 times before it sold that it stays at market prices. Speculators trade futures, which means that for every contract they trade there is a buyer and a seller that both want opposite things to happen to the price. So even if one large party decides to start buying up futures to drive up the price of oil they will make more money on the oil but lose money on the futures and end up coming out even. All they would have done is reduce their own cash holdings which nobody wants to do.

        In the end speculators provide some very necessary details to the energy market. First of all, by them adding money to the market in whatever means they are increasing liquidity in the market and reducing volatility. By regulating these groups the government will cause enormous price swings in the price of all tradable resources and end up causing more harm to the consumers. Secondly, and probably most importantly these energy trading groups are the ones that provide security and predictability to any company that uses energy. Without this service the costs on almost everything would skyrocket, specifically airlines, resorts, Shipping and groceries. In addition to that almost all small cap oil companies would not be able to exist because they could not deal with the large price swings in the price per barrel of oil…. read more »

        …This again would cause the price of oil to go up.

        With all of that being said and in regard to some previous statements there is a huge difference between speculation and manipulation. To begin with only one of them is legal. Market manipulation which does no good for anyone but the manipulators is illegal, has been for a long time and gets people sent to jail every year. speculation=good manipulation=bad.

        I would love for anyone to disagree with me.

  6. Jack Adams says:

    Ken,
    I retired from Exxon after 30 yrs. in Marketing. Where can I go to obtain a list of the hundreds and hundreds of products Exxon produced that directly affect everyday life. Such as glues for furniture, carpeting, also food wraps, crayons…and the list goes on. I had a list several yrs. ago, can you help? It’s a great tool to use when I’m in discussions with people who totally have no understanding of the company or industry, just gut reactions. Thank you in advance.

  7. Morris Whitcomb says:

    This is my recent letter to the editor of the Houston Chronicle:

    William Meadows’ recent article (Outlook April 29) didn’t do a good job of explaining what he calls “tax subsidies,’ and wants them eliminated due to the recent profit results of “big oil.’ He did not mention the effects this would have on new drilling. There are four items under Congressional consideration.
    The first is the Domestic Manufacturing tax deduction, designed to keep manufacturing in the US. It allows a 9% of income deduction (but only 7% for oil & gas) for domestic production. Of course existing wells cannot be moved overseas, but when they become marginally profitable, they would be shut down sooner without this allowance.
    The second, Percentage Depletion, applies to all minerals, not just oil & gas. Integrated oil & gas companies (read “big oil’) are ineligible for this credit. It applies only to independent producers and royalty owners.
    The third is the Foreign Tax Credit. It allows income taxes paid to foreign governments to be deducted from income subject to US taxes. It avoids double taxation.
    The fourth is the deduction for Intangible Drilling Costs. These are non-salvageable costs of drilling a well, such as labor, site preparation and hauling costs. For independent producers they can be written off in the first year, but for “big oil’ only 70% can be.
    The fallacy behind his proposal is that it assumes an otherwise uneconomic new well will be drilled, or a… read more »

    …marginal existing well will be kept in production using the high profits from existing wells. I can assure you this is false. The decision to drill or maintain production will be made based on the expected profit from that well alone. For this reason the elimination of these credits will result in less oil & gas production, and for all but the foreign tax credit will result in increased reliance on imported oil & gas.

  8. DLS Simpson says:

    You say oil markets are well-supplied today. I won’t disagree with you there. Countries around the world are slashing oil production due to over-supply.

    However, you go on to say energy prices would drop if American oil-reserves in the deep-water gulf were open for Exxon to drill and put on the market.

    This doesn’t make sense to me. Why would Exxon dump more oil and gas into an over-supplied market to drive down prices (which is what you claim would occur) and cut into profits? It doesn’t sound like good business.

    Furthermore, you claim that the gas price spike is due to increased demand at the same time you state the market is well-supplied. I’m not an economics professor, but this defies basic logic.

    It appears to me you haven’t adequately explained the spike in oil and gas prices whatsoever.

    • Peter Doyle says:

      It is called speculation… big investors buying up futures to drive up the price or holding it off the market….

      • beth hery says:

        Here is a novel idea. One that could mitigate speculation, but would not improve the situation relative to the weak dollar.

        Make anyone or any company that purchases oil take physical delivery of the oil before it can be sold again.

        Now when the hedge markets were only populated by companies that needed oil and countries and companies that sold oil the system worked well for what it was designed. allow a company to leverage potential future purchases relative to current pricing and guessing what the price would be in the future. but what make it work for oil and other commodities is that in the end all the players had a real stake in either obtaining oil or selling the oil. (or other commodities)

        now the markets have significant players that have no interest in ever actually posessing the commodities.

    • Ray Parham says:

      Another person that doesn’t understand fundamentals of economics! What would drilling in America do to oil prices? Of course it would drop them. Any time you add supply to the market prices drop. Right now, OPEC has a strangle hold on oil prices. They can set prices and production at whatever they want. If we produced more oil domistically, The oil companies would not have to purchase as much from OPEC, they would have these basic choices:

      1. Keep the production the same, lower prices to sell the same amount of oil, make less per barrel, have less income.
      2. Lower production to keep the price the same, make the same profit per barrel, have less income.
      3. Lower production, raise prices to increase the per barrel profit, keep the income the same.

      There may be other options or permutations, but these cover the essentials. Item 3 is only possible when OPEC controls enough of the supply for the world to bow to there wishes. In any case, more domestic production is guaranteed to lower prices, it will just take time for the production to hit the market.

    • John Fucik says:

      I purchased Exxon Mobil stock back in the 90s. As an internation air line pilot I observed a large increase in Mopeds in many poor countries. These were replacing bicyles. So the oil consumption incresed a thousand fold-one tablespoon to lubricate bicycle bearings to gallons needed to fuel and lubricate the Moped. Now those Moped owners are moving to the auto, another quantum leap in oil consumption. So the oil companies are really just looking forward. They can drill now and leave the oil in the ground until prices are higher, as they normally tend to be.
      I grew up in the Texas Guld Coast area. A wealthy surgeon there would purchase land along with its mineral rights and then drill. When he found oil or natural gas he would cap the well as by doing so he kept that supply off the market thereby keep the price up. He only utilized a well if its proceeds were necessary to keep his operation profitable. He has long ago passed away but those wells are now producers at a much higher rate or return for his heirs. Just American business. The same happens with cherries when we have a bumper crop. Many are just left on the trees to fall on the ground and be plowed under to add nutrients back to the soil. This again keeps the price up.

  9. M Raybon says:

    You use the word ‘incurred’ and ‘duties’ but not not paid to the U.S. is that because you haven’t paid, just curious…..

    Let me state it unequivocally. Last year, our total taxes and duties to the U.S. government were $9.8 billion, which includes an income tax expense of $1.6 billion. Over the past five years, we incurred a total U.S. tax expense of almost $59 billion, which is $18 billion more than we earned in the United States during the same period.
    And during the first quarter of this year, we incurred tax expenses in the United States of more than $3.1 billion on U.S. earnings of $2.6 billion.

    • Omar Johnson says:

      You can state all you want the fact of the matter is you go a refund from the United States Of America. If you don’t like the tax laws move all your equipment and all your workers over seas and let someone else take your place.
      For a company that gets oil from America shore and don’t want to pay any taxes is illogical at best. You have made the most money in history period. To say you pay enough taxes is like telling my little son he can’t have any ice cream. I know what you should do, lobby against the speculators. But of course you wont, every dollar the price goes up you make billions. Nice racket you have Exxon. Who do you think pay the high prices. You got it the poor who must maintain a car to get to work or not be able to feed his family. Or do you think everyone in the United State is rich. You are a fool for even posting. I hope they pay you well.

      • James Hutton says:

        You try to sound so smart yet what you post is filled with grammar errors. It’s the attitude of your first couple sentences that makes me wonder what this country is coming to. They don’t want to pay taxes? Did you even read the article? The government is raising taxes and reducing subsidies on the oil & gas industry, but not other industries. Your ice cream analogy makes no sense. Lowering taxes may lower gas prices. That’s what the experts are supposed to figure out, but all people look at is the amount of money Exxon makes, then claim we need to tax them heavily. If anything, upping the tax rate is going to raise gas prices. You need to understand that corporations don’t pay taxes. They pass them down to the consumer. They are arguing that the government needs to stop punishing Exxon for making money. I’m not saying Exxon is without blame, but the government plays a role in this. They don’t want to cut their spending, they want to raise taxes. Exxon keeps their business here because they would face severe backlash for moving overseas.

        • Skeptical Consumer says:

          I do not claim to be knowledgeable in all things political or economical, but if I had 9.5% of my income after paying all my bills, investing in my future, giving back to the community, and having a little fun…I would be happy.

          I make a decent living. I am by no means rich or poor. I do not over extend my income with unnecessary bills. However, the reality is that what little bit I do have left over, is going into my gas tank.

          Somehow I do not believe that increasing tax cuts would result in lower prices at the pumps. “BIG OIL” would use that money to further exploration. Those “savings” would somehow get rolled up in “Total Expenses” of the pie chart.

      • john tayloe says:

        You weren’t listening; they pay taxes; over ninety percent of their announced profits come from the rest of the world; not America.

        The tax credit issue should be up for debate though. Oil companies should not be isolated in reducing subsidies; There are lots of other huge companies, such as GE who get the same kind of govt, handouts.

    • Bruce Gerrits says:

      Seems like a smoke and mirror game, first of all where do you sell most of your product,,,,UHHH Americia! Second of all Exxon again turned record profits at a time most people are barley surviving. I personally think the Oil companies should be hit with windfall taxes in addition to having your subsidies removed some how I think you are doing just fine with 10BILLION in PROFIT FOR ONE QUARTER!

      • James Tyrer says:

        It is not the amount of profit that matters. It is after tax profit as a percent of sales. Yes, that is up for the quarter, but as long as it is less than 10%, I don’t see any reason to call it a “windfall”.
        .

    • RC Bradley says:

      However, the trillions the U.S. government spends opening up new fields and markets for you (Iraq, Afghanistan, Nigeria, Yemen, SA, and others in the past with diplomacy and combat) and provides by her federal holdings at a discount..you’re still getting one heck of a bargain! The last thing any Exxon representative should do is complain about what XOM pays in taxes. For one, your asset (cash and other) positions show clearly that you 1:Do not reward shareholders with enough dividends or employees with enough pay 2: Are hoarding cash and assets to to the tune of 150B currently (and that does not include all the holdings around the world in subs) If you calculate your actual tax expenditures compared to profit it’s way below average. Since the 1950′s corporate payments into the U.S. coffers has dropped from approx 50% to less than 8% now. What has happened? The middle class is picking up the tab which explains their increase in debt, loss of benefits. With increase in inflation workers have had a -9.5% loss in income for the last 20 years..whereas corporations have had an average 140% increase in profits! CEO’s are being paid on average 300-500X while their employees have gained only 4% in the last 10 years. This is why people are upset. At some point the Exxons and Walmarts (Walton family is hoarding over 130B in wealth and the company is holding over 100B in assets and… read more »

      …cash) of the world need to share some of the wealth! Wallmart pays very low and minimum wages and denies their employees benefits. This means the small towns and communities have to pay more taxes to support those employees and their trips to the county hospital. Corporations receive special tax and rights benefits that are granted by the U.S. Government that individuals don’t receive. Because of that, all corporations have a Patriotic Duty to be fair to the communities they base out of.
      Exxon is a very impressive company however they are not known as being particularly charitable (except their actual employees do give much and are to be lauded for it) and not particularly concerned about the city they base out of. Which to me is sad. Rex has been charitable and many of the leaders in the company, but the company as a whole give less than .1% of their profits to charitable efforts, which is deeply affecting schools, higher education, health and assistance in the most needy. Meanwhile Exxon uses all the infrastructure provided here. At what point is enough enough? Share it with employees, shareholders, the communities you operate in and the Government that does so much to help Exxon succeed and stop bashing them all.

  10. Steve Trapp says:

    Exxon is given special tax breaks. Exxon makes huge PROFITS. Exxon needs to invest in America. Paying fair taxes, understanding the infrastructure you are profiting from is taxpayer supported, is investing in America. That is what creates jobs. Quit whining about the profit margin. Your company is reaping fine rewards, pay your honest fair share.

    • James Tyrer says:

      Yes, lets find more oil, or start producing an economically viable substitute for it. Note that Ethanol from food is not economically viable — only makes the problem worse. Eventually, we will run out of oil and have to switch over to synthetic hydrocarbon fuels. At today’s prices for crude oil, perhaps now is the time to start doing that. I read that both China and India are building synthetic fuel plants.

      • john thaller says:

        Synthetic hydrocarbon fuel, and what is that? You cannot synthesize fuels without using a lot of energy. So I am not sure what you are talking about.

  11. Rick Torgerson says:

    First Q revenue was $114B, earning of $10.7B. Yet earlier posts you state you paid $3.1B taxes on $2.6B earnings. Earnings are AFTER taxes. You are taxed on Gross Revenue. The $2.6B earnings was after paying the $3.1B in taxes plus after all other expenses. How much of the $114B revenue was from the US? How much was from selling products in the US? That is the number you were paying 3.1B taxes on, not the $2.6B earnings.

  12. Don Skinner says:

    I do agree with Exxon’s position on natural gas. I believe the process is tried and proven. I would like for someone to comment on the affect speculators have on the price of oil. I believe certain commodities should be regulated to allow only the parties who actually use them to purchase futures. I realize this would be vehemently opposed by Goldman Sachs and others who make enormous profits on commodity trading, but the government needs to step up and address this. Is there a reader who can explain this better than I?

    • James Tyrer says:

      Speculators can’t make any money unless someone that takes delivery is willing to pay the price.

      • Don Skinner says:

        if the purchase of futures could only be made by companies that use the commodities and would take delivery of the commotidies then that would tend to eliminate the speculaters purchasing them as a way to make money. Companies that use the commmodities have always purchased future production at an agreed upon price.

    • nick queen says:

      I would disagree, as natural gas fracking is very destructive to the environment, the water supply, and the health and well being of anyone living near the drill sites. Gasland is a great documentary full of facts to support my statement.
      The biggest shale deposit these companies are wanting to tap into at this point stretches halfway across Eastern US. Imagine the problems caused by fracking (water turning black, people being able to light their water of fire, whole rivers, streams, etc. being surrounded by and full of dead animals) being applied to the Mississippi River and the rivers that feed into it. I see this as a likely knockout punch to the economies of many riverside communities as well as a massively destructive blow to clean water and good health for a large portion of Americans.
      More natural gas???
      No thank you!

  13. steve x says:

    Cry me a river, exxon

    • PK Rogerson says:

      The “Real Story” is that have to depend on Venezuela to sell us oil, wholesale, to help out the poor, elderly and sick. We are talking wholesale, and I should feel sorry for you.
      You spend more on your foolish Ads.

  14. John O\'Connell says:

    Corporations don’t pay taxes, they collect them.

  15. John O'Connell says:

    Corporations don’t pay taxes, they collect them.

  16. mark hicar says:

    I enjoy how you say you paid more in taxes in the US then you made earnings in the US…. I guess you shouldn’t have profited so much from your overseas ventures. you had 114 billion in revenue for the 1st quarter; and 10.7 BILLION IN EARNINGS! That is for 1 freaking quarter…. how do you justify needing any more tax breaks???? It is also unclear how much of your 77.1 billion in expenses were reinvestments rather than for actual upkeep.

    • John Allsop says:

      That is called Net Investment, and as XOM is a publicly traded company it’s included in their SEC-mandated annual report, form 10-k. You can find it on the first page of a Google search.

      I do agree, though; it’s much easier to rely on hyperbole than to take the 5 minutes to look things up. Maybe you can try it next time.

  17. Sairose Flynn says:

    You don’t pay taxes you leave them for the middle class to pay.

    You do not make 100,000 jobs per year for Americans.

    You DO over pay your executives, why does anyone need over 1M per year in earning?

    In 8 years Bush reduced taxes and made 8M jobs!!! Appalling!!!

    In 8 years Clinton put up with the poor sports (rebublicans) raised taxes AND created 44M jobs.

    So raise taxes, businesses get frantic and make jobs to keep their non tax paying lifestyle on the backs of the middle class.

    Reminds me of the French Revolution, history might repeat itself.

    • Ray Parham says:

      Some of your “facts” do not stand up. The best numbers that I could find for Clinton is 20 or 22 million, not 44 million. And the bulk of that was due to a burst in technology, not anything Clinton specifically did.

      Further, Clinton was forced into a lot of his “changes” by a Republican Congress, not due to having to “fight” the “poor sports”. As an example, Clinton takes credit for having the last balanced budget. That was only done after the Repubicans won in 1994.

      Finally, politicians on both sides of the aisle are responsible for where we are today. The only answer is to return to the foundations of this country with limited federal government and lower taxes. We do not have a revenue problem in this country, we have a HUGE spending problem.

    • John Allsop says:

      The lady who invented Pillow Pets made over $100 million this year. The people at ExxonMobil are finding and extracting minerals we critically need – from the center of the Earth. It doesn’t seem that unjustified to me.

    • pam stemberg says:

      Taxes help distribute wealth. That’s the reason for them in the first place. We give to the government, govenment takes care of infrastructure, redistributes the wealth while bringing up the standard of living due to better infrastructure and more jobs. Everyone, including the greedy, shortsighted, wins.

  18. Gary Gonzales says:

    your math

    earninings 10.7 billion
    Expenses 77.1 billion (not including taxes or duties)
    = a (neg-) 66.4 billion
    Taxes 26.2 billion
    = a (neg -) 92.6 billion

    Your all full of hot air you should not be in business if theses are real numbers . Really, who carries aNegative like this and survives, I do not feel sorry for you or for the Government, you all make money its not on the books somewhere because if theses are your books you should not be existing. Thieves and liars lack of integrity across the board.. Politics makes for strange bedfellows and you all are under the cover.

    • Oggy Bleacher says:

      Hold on, Revenues were $114,000,000,000. That’s overall income. Start from there and do your math again. The pie chart shows expenses, taxes and then what is left over: $10.7 Billion.

    • john thaller says:

      Not too good at math are you. The earnings are what is left over after the taxes and expenses are taken out. $114-77-26 = $10 billion in earnings, a positive number.

    • John Allsop says:

      “Earnings” are revenues after expenses are already taken out ;)

      So earnings of 10.7 billion were on revenues of $87.8 billion.

      Revenue $87.8 b
      -Expenses $77.1 b
      =Earnings $10.7 b

    • tim wohl says:

      Gary you need to re-read the article, that 10.7billion was net revenue not total earnings, the total earnings was 114billion, go and redo your caculations again.

  19. Randall Head says:

    Someone is being disingenuous in this piece. You state that you paid more in US taxes than your US earnings for the last five years. It should be noted that your earnings are NET of taxes. Meaning that your “earnings” are what’s left after you’ve paid your taxes, and the thousands of people on your payroll who do nothing but try to minimize your taxes are a good investment for you – else you’d not be paying them.

  20. john tayloe says:

    Makes sense to me.

  21. Mark Forster says:

    According to the Kansas City Star’s extensive investigation:

    “The lawsuits center around the oil industry’s century-old practice of pricing gasoline on a standard of 60 degrees. As temperatures rise during warmer months, the gasoline expands, meaning customers get less energy per gallon.”

    “Congressional members have estimated the changes in temperature have cost consumers $1.5 billion a year, and they considered forcing oil companies to install pumps that adjust for temperature changes.”

    The link to the full article I’ve quoted is:

    http://www.msnbc.msn.com/id/23284828/

    I SUGGEST YOU WRITE THIS DOWN BEFORE THE EVIL EMPIRE REMOVES THIS POST (IF THEY EVER POST IT IN THE FIRST PLACE). SEEMS THEIR “RULES OF ENGAGEMENT” FROWN UPON THE TRUTH!!! THIS IS WHY THEY REMOVED MY “HOT FUEL” POST FROM EARLIER THIS WEEK!!!

    • Ray Parham says:

      And when the ground temperature drops in the winter, the consumer gets more then they paid for. I wonder if the study included that factoid?

      Or, the people in the south get less, the people in the north get more. A standard is a standard, neither good nor bad. I know of no way to sell gas by the “BTU content” which is the only way to really equalize the varialble energy contenct of a gallon of gas based upon temperature and actual mix of petroleum products.

  22. Tim Grable says:

    What I’m interested in is what ExxonMobil paid in income tax.
    All the other tax burdens (including sales tax, excise tax, etc) are operating expenses and collected per gallon from the consumer at the pump or from station owners on delivery. They are not Exxon’s tax burden.
    That it’s so difficult to find consistent statements from the company regarding it’s US income tax burden (try comparing what they claim on their 10k filing with what they say in their financial statements and investors prospectus!) speaks volumes.
    This blog seems to carefully avoid using the word “paid” in relation to any US taxes.
    As far as I can surmise, from liberal, conservative, business and consumer articles, the consensus seems to be that Exxonmobil paid less than a 2.5% income tax rate last year.
    That’s only on net earnings they’ve declared and doesn’t include billions on billions parked permanently offshore in more than 2 dozen shell companies in the Cayman Islands, the Bahamas, etc.

  23. Robert Gates says:

    Let’s take a look at this. A company goes out and generates in total revenue 114 billion. Pays 77.1 billion in expenses, pays 26.2 billion in taxes and ends up making 11 billion dollars revenue, or around 10%.

    Although the total numbers are different, this sounds exactly like McDonalds, or any number of other resturants.

    Take a look at Walmart/Sams club. They made around 100 billion dollars this last year. During the last quarter they made around 3.8 billion dollars, so they are making more profit, on less money, then ExxonMobil does.

    Out of the 77.1 billion, most if not all of that is very good paying oil and gas worker jobs salaries and benefits; not to mention paying money for the many and various supplies used, everything from office supplies, to pipe, steel, rigs, trucks etc. All the workers and companies also pay taxes on what they receive.

    So if ExxonMobile happened to go out of business, that would be 77.1 billion dollars that wouldn’t filter down to all the people from the lowest paid oil worker, all the way up. If they didn’t have that income, they would likely be on the unemployment line and not paying any personal taxes. For the many and various small and large businesses that do business with ExxonMobile, that would be less supplies, pipe and many other things… read more »

    …bought, which means that those small businesses may go bankrupt.

    That would also mean the government doesn’t get 26 billion dollars per year.

    So when you realize how it all breaks down, how many people are employed, how many companies are in business because of ExxonMobil, we should be happy.

    No, I, nor my family works for ExxonMobil either. Most people see the bigger picture here and realize that poor people don’t hire people. Companies with money hire people.

    Robert

    • tim wohl says:

      you also neeed to take a look, mcdanald made that for a one year period. The exxon take was for just the first quarter of 2011, a three month period. Wait till the end of the year and then see exxon’s 40 to 60 billion profit.

  24. John Vanderburg says:

    The chart is a bit different if you consider the amount of US taxes. True Exxon is an international company, but most of the posted comments related to governments and taxes are directed solely at the US. So considering solely US taxes, that shrinks to less than 10%. As a person that is self employed, I’d think a 10% tax rate is AWESOME!!!! Heck, I’d think 26% tax rate would be pretty darn good!

    Is 10% really that bad? I like having roads and weather satellites, etc….

  25. malcolm turner says:

    My question for the oil industry is this:
    In 2008, Oil was 147$, gas was about $4.30 (chicago area)

    In 2011, Oil is in the 90-100$ range. Why isn’t my gas around $3? It’s where it was in 2008.

    Is there some kind of refining problem or are you doing something nefarious with the pricing?

  26. john bronski says:

    ExxonMobil paid $0 in income taxes. Who cares what rates are when you pay nothing. About 85% of the top 100 US companys paid $0 income taxes. How about an AMT for corporations? Even 1% would be something.

    I do appreciate your propaganda though. Lets me know what your up to.

  27. LE Doster says:

    The sole purpose of a business is to make a profit (seems like I heard that in a college accounting class in the distant past). If a business makes a good profit, then it’s better for us that they do it in the US rather than overseas. Otherwise, the jobs go overseas with them along with all of the tax revenue. Then, where are the tax and spend liberals going to get the money to support the government social entitlemant programs with which they are draining us dry?

  28. Jason Martin says:

    So long as the tax on gas is SIX TIMES what ExxonMobil makes in profit, I think I’ll worry about the gov’t first. They seem to be the bigger and more immediate problem.

  29. Shelly Oh says:

    I don’t think someone is getting it. Besides the subsidies, the fact that earnings are at RECORD levels above costs, while the rest of the country is barely able to fill up their tanks AND afford to feed their families is the issue. The company could find more sympathy for their plight if they weren’t pocketing 10BILLION after taxes and expenses, which includes subsidies. If the subsidies weren’t included, the earnings would be less, as would the multi-million dollar salaries, and bonuses to the execs.
    It is the appearance of “fiddling while Rome burns” that is muddying the water here. Put the violin down and asking for sympathy for *your tax bill. It is hard to have any sympathy for you when others can’t feed their families, the basics, when the execs are dining at five star restaurants. Lower OUR gas prices and THEN Maybe, just maybe, you might find a more receptive audience.

  30. D B says:

    great comments… but we cant keep blaming the presidents when congress agrees to certain bills… you learned in school that the presidents dont actually have the say so, congress and senate makes the final descions.. so if you want to point the figure, point it and congress, where the oil company pay offs are going… secondly solve our oil crisis and deficit… (BAKKEN FORMATION) google it… supply and demand…. remember who runs the world… the 13 riches families.. jp morgans, rothchilds, rockefellers…etc… google it…

  31. frank lipsky says:

    The same old story! when profits are excellent talk about return on sales (ROS);when profits poor talkabout ROE and ROI!
    And the stupid public and poorly educated financial journalists do not know the difference;but bet your life(because you are!)the Exxon and big pharma know the differences
    Aside: While I am not a fan of big oil/pharma
    I was charged $2.30 for a cup of coffee(and $3.95 for a gallon of gas).”We have met the enemy they are us”

  32. john thaller says:

    So, they paid about 23% in taxes. What is wrong with that. If companies don’t pay taxes, guess who will, you. If not, then forget having any schools, police or fire paid.

    I am sick and tired of having companies not pay real estate taxes for a number of years just to get their business. Then we end up wit a whole bunch of expenses, which the twp has to pay for, and ultimately the real estate taxes go up.

  33. ron jacobs says:

    Your post is a perfect examples of how figures can lie. The fact is that Big Oil shows incredible profits no matter what. Another fact is Big Oil gets incredible subsidies. Another fact is that big oil is subsidized in unseen ways: the most obvious being that the US military goes to war for it to secure investments (all the while using oil products). Big oil may earn 3 million in taxes but it pays very little tax itself. What is need is not less regulation of your industry but nationalization of it.

  34. R.O. Boris says:

    So Exxon makes 7 cents per gallon, gas stations make about 5 cents per gallon, and the government rakes in a whopping 60 cents per gallon. That accounts for about 72 cents per gallon. Heck, let’s round it up to 75 cents per gallon.

    Gas is retailing for around 4 dollars per gallon.
    So tell us – who’s getting the other $3.25?
    Take your time…

  35. Shannon Rau says:

    Maybe I’m a hippie, and I know very well that my interest lies in ecology rather than political science and economics, but what really got me the most about this post was this little, inconspicuous sentence:

    “But there are concerns that political overreaction to a small number of isolated environmental issues could jeopardize this emerging industry and the benefits it provides.”

    What an understatement. I have done research in the area of how industries such as oil and natural gas are affecting the ecosystems in which they are practiced (research unmotivated by money or any ideas of political or monetary gain, such as cannot be said about the words of any politician or corporate blog like this one). Needless to say, the environmental impact of these industries is horrendous. Tell me that what is being done to the pristine habitats in our country is isolated after you look at these images – http://ecoflight.info/index.php?mact=eco_gallery,cntnt01,default,0&cntnt01returnid=16&cntnt01issue=3
    Photo courtesy of EcoFlight.

    I really want to believe that there’s a future without dependence on fossil fuels and the horrible toll they exact upon the environment, but then where would the Exxons of this world go?

  36. Michael Sexton says:

    Your paychecks are part of your expenses. other people call that earnings. your target earnings is 10. ? billion so money gets shuffled around until thats what it comes to. Not all of us little people are idiots. painting yourself as some kind of victim is pathetic considering the financial cushion you have.

  37. jeff tyge says:

    ok folks we are all doing math .thats what they want you to do stay busy doing math….the taxes they pay are state and federal taxes they collect at the pump the taxes you and i pay each time we fill up this is not any part of their earnings its merely cash they collect from us to give to uncle sam…yes they remit tax payments …but no they don’t pay taxes you see its a big charade to fool the least suspecting dullards

  38. Robert Robuck says:

    I can do math – I especially like how much of the article has to do with taxes, completely unrelated to the premise but gives everyone who believes this load an enemy. Profit is simply the difference between expenses and the price to the consumer. Now do the math – for profits to jump in a time of steady or falling consumption who’s paying?

  39. Alan von Altendorf says:

    Dear Ken,

    The political fix is in, courtesy of NEA, taught in every grade school. State universities hand out graduate degrees for teaching it in college. Oil is evil. Success is evil. Private property is evil. Nothing you say matters. They’ll accuse you of lying. Facts don’t matter. YOU are supposed to make their fantasies come true, energy without risk or waste or capital. Even if you succeed, they’ll threaten to nationalize it.

    The American Experiment is over, bub.

    Alan von Altendorf
    CWSX

  40. Michael Alexander says:

    You make it look like a struggle to be part of our country, those costs of doing business include buying politicians, creating war in the middle east to keep the prices up, we the consumers pay the taxes you add into your costs. You also want the cheapest labor you can get along with the other cry babies who keep telling us that paying Americans a fair wage costs us business yes it does but if we ever get our country back and our politicians have to start sharing how much you give them. The greatest part of our country our people will decide if you move somewhere else and sell your product back to us. The blood of our soldiers is on your hands and Bush’s chronies those aren’t your cost they’re ours

  41. Dorothy Zink says:

    I could just cry.

    But as you destroy America, try to focus on the fact that if our workers don’t make money, those who do will pay the taxes.

    You threaten to go overseas, though you already have, but I think it’s a great idea. Move.

    Many entrepeneurs are just waiting for a chance to replace you.

    Byeee!

  42. tom henderson says:

    Dont take your eye off the real ball. Fact is: Corporations DONT pay taxes. Never have. Never will. ALL taxes are paid by the consumer of their products. They just collect those taxes for the govt. The govt makes an awful lot more $$ off the sale of a gal of gas than does the oil co. The politicians make it fashionable to bash “big oil”, “big pharmaceuticals”, “big automakers”, or any big business that is successful. The real greedy villain is BIG GOVT. People need to wake up and use some common sense. Govt produces NOTHING. Corp’s do.

  43. Charles Chambers says:

    Too bad the claim that they are the victims of misinformation is presented in the same article suggesting that their first quarter’s gross revenue for this year is $114B.

  44. Michael Hanley says:

    I’ve never seen more conspiracy theories about evil corporations or sheer stupidity and inability to read and understand the English language than the vast majority of the commenters on this blog. 75% of the folks who comment have no understanding of how ANY company works, of how their shortsightedness and stupidity and gimme, gimme for free attitudes are directly responsible for the cost of their own gasoline, and how neither Exxon nor any oil company is responsible for the real price of their gasoline. Since Exxon only owns 2-3% of the oil reserves in the world, and the vast majority of those reserves are owned by national oil companies (Saudi Aramco, Nigeria, UAE, Angola, Indonesia, etc…..), those companies are who control the price of a barrel of oil. Speculators have nothing to do with the cost of oil because they only sell the gas they buy to the market that needs it. 100% profits on speculative sales ignores the fact that almost an equal number of sales are losers also. It evens out.

    If you really want Exxon to spend more money on jobs in the US, then you’d better allow them to do work in the US, and that means drilling and refining operations, and capital upgrades and expansions to both. Since the US government, environmentalists, and stupid people like the commenters here control the government and the press, there’s little chance any new jobs could ever be paid for by Exxon.

    Go ahaead and drive the oil companies out… read more »

    …of the US… Where will that get you idiots? Fewer jobs and more poverty. The level of stupidity in the comments is overwhelming.

    • Doug Steinschneider says:

      It’s depressing to see so many mindless posts about an issue so critical to their lives. The “speculators” they are attacking are the people who make it possible for them to purchase an airline ticket to Europe months in advance at a set price. The “alternative” energy sources wouldn’t make it through cooking their eggs in the morning much less heating their house or driving to work. The taxes on companies that provide petroleum products are paid by people who drive, buy food and sit in warm houses on wintry nights. The real problem is educators pushing a utopian agenda, a media establishment that pushes a wishful storyline and gullible people. I love energy conservation, its smart resourceful thinking but I have no illusions about living in a world without carbon based energy souces. We won’t develop the next energy source if we devovle into the proverty that a green energy economy dictates.

  45. D Vaughan says:

    Something I find very interesting is that over 80% of the worlds petroleum reserves are owned by state agencies/companies such as Saudi Aramco. ExxonMobil doesn’t even make the top 50 in terms of reserves when you include foreign national companies.

    http://en.wikipedia.org/wiki/File:Reservespie.png

    XOM has no ability to control energy prices and has a limited access to explore in some of the best oil regions of the world. Ironically XOM is part of the equation holding oil prices down because they compete in the free market. OPEC (with limited success) actually attempts to control the price and most of their members don’t have American interests at heart.

  46. Keith Mackenzie says:

    Who does not notice that this blog is run by Exxon? And you believe these numbers? Duh!

    Last year ExxonMobile made 54 billion dollars in profits. Guess how much US taxes they paid?

    $0

    • Michael Onger says:

      “Exxon’s grand total in global taxes for the year? A whopping $78.6 billion.” and yes, like every other American company, it can deduct foreign taxes from its domestic obligations.

      But consider: Exxon has never asked for a bailout, and Exxon delivers a product. In, fact, the product that makes everything go, energy.

      Compare that to the Wall Street bandits, like Soros and Goldman Sachs. What do they deliver, except speculation, personal greed, a fiscal meltdown which left 10% unemployement, and cost the taxpayers of America upwards of $700 billion in bali-outs.

      Your anger has been misdirected (willfully and skillfully)

    • Lido Riggins says:

      After reading most of these posts, I am absolutely dumbfounded by the collective ignorance shared by most Americans on this issue. It’s a classic example of abductive reasoning – once given facts that SHOULD raise your awareness and understanding of an issue, they’re quickly dismissed because they don’t fit into your deep seeded position.

      Another problem that most Americans share is wealth envy. This is, of course, used by Obama all the time – lately attacking companies that fly their own planes. The American public eats it up because they think corporations, even Ma and Pa businesses have no right to make “too much” money.

      My guess is that nobody in this forum has ever been given a job by a poor person. Quit griping about how much money “Big Oil” makes and start making some of your own!! There is plenty to go around you know, but it does actually take work!

      Do yourselves a favor and at least read up on facts and try as hard as you can to understand and use this information to form your opinion – not your liberal anti-corporate philosophy.

      Finally, a quote that may ring a bell for some:

      “I know that most men, including those at ease with problems of the greatest complexity, can seldom accept even the simplest and most obvious truth if it be such as would oblige them to admit the falsity of conclusions which they have delighted in explaining to colleagues, which they have proudly taught to others, and which they have… read more »

      …woven, thread by thread, into the fabric of their lives.” Tolstoy

  47. John Shute says:

    I enjoyed your article. Having been in the oil and gas industry for a while, I have personal experience in the industry. You’re spot on, sir. Thanks.

  48. Robert Graham says:

    Does anybody know the family that owns XOM? Not !
    Just think, with what you spent on union dues or crack last week you could have purchased at least 1 share of stock. Do that starting at 30 yrs old you could actually support your own retirement. Thank you XOM.
    Stop gripping when you pay a buck for a bottle of tap water.
    I am middle class and I own XOM.

  49. Ann Edwards says:

    $5,000,000 an hour. 24 hours a day. 365 days a year. Profit. Pure Profit. No New jobs.

    If you are so very concerned for these avaricious and uber wealthy corporations it is a simple fix. If they do not like it here, they are free to go and you are free to follow them.

    That Is All.

    • Paul Bunce says:

      Ann, you can do as everyone else should who thinks that XOM makes too much money. Buy the stock and get rich. If you’re not willing to put your money where your mouth is, then you might want to reconsider your opinion.

      I don’t own the stock and I don’t think they make that much profit relative to risk. As a business owner I can state that I have probably created more jobs in the past year than our President has.

      • Mike USMCvet says:

        Paul, you are assuming people actually HAVE money to invest!! That’s the problem of stupid republicans. People are forced out of the market by low wages that haven’t increased since Reagan demolished our country and economy.

        Republicans OUT in 2012
        Raise taxes back to pre-Reagan era

        Google “GOP shrinking”

  50. Mark McGwire says:

    So if it’s so awful doing business in the US and having your HQ here and not having any influence in the political process or legislators then why don’t ya move it to Saudi Arabia or Qatar wheere you won’t have to pay taxes or deal with an intrusive gov’t policy?

    • John Homman says:

      That is exactly the point! That is way so many corporations ARE running overseas. Do you realize how many jobs that will cost the US – tens of thousands… LOWER THE DARN taxes and INCREASE jobs – it really is SIMPLE math!

      • Mark Kimitch says:

        Who pays the taxes that businesses aren’t paying then? The middle class, that’s who. Unions also cost businesses more money by negotiating fair wages, so maybe we should get rid of those, too. So for the privileged of working at scab wages, the middle class also gets to pay the taxes that businesses should be paying.

        American businesses have been trading jobs for profit for decades, and recently at an alarming rate. Taxes aren’t the problem, greed is. It costs money to run a country, especially one that offers so much; it requires everyone to pitch in. If you want to go live in a country with an oppressive government, fine, be my guest. I’ll stay in America, because I enjoy freedom, and freedom isn’t free.

        • Kenneth Floody says:

          Mark – even if a corporation writes the check for the tax – they PAY no tax. It is a cost of business they pass along to you. If the gov’t told ExxonMobil to pay 10 bil in taxes, guess what happens to the price at the pump? Got it? Corporations do not actually pay taxes, consumers do by paying for higher prices. Corporations are supposed to maximize their profits to reward their investors. It has nothing to do with greed. That’s why people buy stocks. The only party exhibiting greed is the government for incessantly raising taxes without EVER trying to reduce costs.

        • C Burris says:

          The Greed here is on the Gas & Oil companies with Billions of dollars in profits (after investments even) and they aren’t creating 10′s of thousands of new jobs with that profit I assure you. The price of oil is determined by OPEC and stock trading, not how much in taxes the Gas and Oil companies have to pay (out of their rediculously high profits). In reality, the Gas and Oil companies are milking the rest of the world for something that doesn’t truly belong to them to begin with. It belongs to all of the people on this planet, so why should the big oil companies being the ones reaping huge benefits and expecting to get out of paying more in taxes. The Oil companies will get 0 sympathy from the middle or lower class American public. Period.

        • john thaller says:

          Only 11% of the workforce has unions, so I doubt there is much of an impact.

        • Joseph Case says:

          “American businesses have been trading jobs for profit for decades, and recently at an alarming rate. “

          Mark,

          What you write is strangely true. Where would you as a businessman do business? In the US, where because of tax policy and environmental paranoia you’d have to spend $59 to earn $18? You must be one of the 47% that think the Founding Fathers intended that good ol’ Uncle Sam spoon feed us all.

        • Robert Nielsen says:

          Let us understand that Corporate taxes are a costs that is passed on the the consumer! That is a simple fact, like it or not. The consumer ends up paying whatever taxes are imposed on corporations. Want lower gas prices for example, then reduce or eliminate the taxes on oil companies. Of course, that means taxes must be increseed in some other area, unless government expenditures are also reduced. Unfortunately most Americans do not understand this!

        • DK Van Ness says:

          Mark, you want everyone to pitch in, then you need to get the 51% of people in this country that don”t pay any Federal Tax to pay their fair share. When you get that done, I”ll buy in to your theory.

        • Ivan Hadenov says:

          You wonder about who pays “the taxes that businesses aren’t paying.” I would answer that with a question of my own: who determines how much needs to be collected in taxes, and from where?

          You seem to be of the opinion that, no matter how outrageously massive and wasteful our government spends our money, that “somebody” is responsible for its funding. We seem to have a lot of people who share this opinion, which is why we are $14 trillion in debt.

          Have any of you ever considered that if we simply controlled how much we spent, and where we spent it, that there may not be those pesky taxes that “businesses aren’t paying.”

          Yes, it costs money to run a country. But the cost of providing everything to everybody is beyond any country’s means. Freedom isn’t free, but too many people believe that public housing, food stamps, unemployment, and health care are.

        • Rod Anderson says:

          The only freedom you are wanting to enjoy is a free lunch!

        • Jonathan Lloyd says:

          Agree with everything except where you state “American businesses…” There are no American businesses–at least not if they are global in nature, and every large corporation is nowadays global. Ford, GM, GE, WalMart, Exxon…these are not American corporations. They would like us to think of them as American, but this is just a marketing ploy.

        • Ken Cohen says:

          Jonathan: ExxonMobil is a global company that is based in the United States. As a result, we pay billions of taxes each year to the U.S. government, employ more than 30,000 people in this country and provide billions in dividends to our shareholders, of which about 85 percent are located in the United States. We invest billions in capital projects in this country and around the world that spur jobs and economic growth.

      • mike dar says:

        What the heck does lowering taxes have to do with creating jobs? Simple math?? Corps are going overseas to avoid taxes.. as many and if at all possible ALLL taxation. Just like incorp in Delaware and have immunity as much as possible to common stockholders.
        Jobs are created in new industries, profits in old industries. New industies newly employ in greater numbers than old industries.
        Protection on a wholesale basis is safest in America’s most stable govt and dollar denomination. Taxes thru the Military protection of this society provides that.
        Taxes are intrical to the money system current to the worlds Central Bank system.
        Saying reduce taxes, even though a cyclical situation, is saying reduce the strength of the Central Bank, that collects through a number of channels, all the taxes.
        This discussion started about BP taxes,, not jobs.
        So it is not simple math.. nor about jobs.The reason this is lobbed against is simple math. New taxation rules are more expensive than old accomodated tax avenues.. BP will find a way around the expense. It won’t create jobs, won’t change anything. Reducing taxes won’t change anything. The enviroment for business creation only happens because a need occurs, AND it is accomodated.
        If anything, added costs in a business model creates change.. change that may create new jobs, here and abroad in new industies. Like the auto manufacturing sector, oil has had it’s day for white collar and blue collar job creation.
        The idea that… read more »

        …critical looks at energy industries are “recklessly criticize” is saying freedom of speech is not nesessary to having these energy industries prove up and respond. Without critical oversight, only the Bondholder, management in the companies win.

        • Doug Towns says:

          Lowering taxes means more projects make sense economically. All deal are evaluated on an after-tax basis. So if a project has an unacceptable return with a 35% tax rate, it may be perfectly acceptable with a 25% tax rate as this boosts the return by 10%. This is why low taxes matter and why they effect employment.

        • Roy Waddell says:

          One of Exxon’s top corporate officers was interviewed by Matt Lauer on the Today Show during the timeframe the govt was contemplating a gas day with no taxes applied. Lauer asked if Exxon would reciprocate. The response was that Exxon would have to actually raise their prices for that day because they owe a “fiduciary responsibility” to it’s shareholders to maximize profits. Oil companies are monopolies clear and simple. There needs to be some competition. When was the last time we saw a “gas war” where companies were “competing” for your business.

      • dave crowson says:

        But your math doesn’t work! It didn’t under Reagan and it didn’t under Bush. 5 minus 2 does not equal 7. Go back to school!

        • James Tyrer says:

          Check the math for yourself.

          After the Regan tax rate cuts, Federal revenue (as % of GDP) increased for the rest of his presidency.

          After the 2001 recession and the ‘W’ tax cuts, Federal revenue equaled the 30 year average for 2006 and exceeded it for 2007.

        • Ann Edwards says:

          James Tyrer: With all due respect. President Bush SR. sacrificed his second term to keep the Reagan “myth” in place. To seek out a second term would have meant exposing Reagan for the screw up he was by telling the country the tax breaks had not work. Instead, he was a principled man and protected Reagan’s legacy at the cost of his own.

      • Ann Edwards says:

        NO! The taxes will not be lowered for these avaricious welfare funded monster profit generating corporations. No! A thousand times NO! These guys are not creating jobs. They are relying on you continuing to believe what your overseers have been telling you all of your lives. TRICKLE DOWN does not work and has never worked. Though, you and your brethren are willing to live with your eyes wide shut and your brains forfitted, the rest of us are enduring the hardship of gasoline prices at the pumps.

        Tens of thousands of jobs lost in the face of millions outsourced because of the low wages. You were told it was because of taxes, when the truth is maximizing profits. You are selling America and we are all in a race to the bottom.

        By the way, there is not a thing in this world stopping you from following them overseas when they move.

        • Jason Collins says:

          Trickle down econonics is a bit like a fat man sitting at a banquet telling the starving child under the table to just keep waiting for a few crumbs…while over 75% of the feast goes untouched.

        • pam stemberg says:

          I don’t know if they could move. There are very few industrialized nations that will support a corporation this large pay so little in taxes. I’m sorry, I lived in Europe. I know what they charge in taxes and duties. And in many other places, they would have to take the government on as a partner or perhaps nationalize.

          No they have it really good over here, they just want more, because well, greed is good.

      • Ken Whall says:

        I”m curious about something, although the article did not touch on Job creation I am wondering how many Jobs ExxonMobile created in the US in 2010. I ask because in 2009 ExxonMobile paid no US income tax. That represented a 36 billion savings over 2008. They surely created a plethora of jobs in 2010 (not).

        Here’s a link to Forbes showing the info. Please note it is incredibly slow loading (minutes) but it will load:

        http://www.forbes.com/2010/04/01/ge-exxon-walmart-business-washington-corporate-taxes_slide_3.html

        • C F says:

          Even if the corporation didn’t pay income taxes, the people who work for the corporation (which is everyone including board members) did pay income taxes. A corporation is a separate enitity that is not a person and is not able to be wholly owned by any individual. A person can own shares of a corporation and be a board member, having voting rights based on how many shares s/he has and duties as outlined in the corporation’s legal papers, but no one can ever really own a corporation unless they want a fast ride to bankruptcy court. As a matter of fact, a board member of a corporation who owns 51% or more of the shares, when signing for the corporation signs “John Hancock, Member” never “Owner”. If a shareholder were to sign “Owner” that person could be held personally and legally responsible by any and all creditors for any and all debts owed by the corporation.

          So, add up all the income tax all the employees (including board members/shareholder’s earnings, field workers, secretaries, janitors, etc.) to see how much Exxon REALLY paid in income taxes, cuz if it weren’t for Exxon generating income, there’d be no income tax for shareholders/employees to pay. Actually a big drawback of being a corporation is double taxation. Sometimes I don’t understand what it is people don’t understand.

          Companies are responsible for paying their portion of payroll taxes which are an added expense above and beyond… read more »

          …the expense of an employee’s gross pay. The employer-portion of payroll taxes include the following:

          * Social Security taxes (6.2% up to the annual maximum)
          * Medicare taxes (1.45% of wages)
          * Federal unemployment taxes (FUTA)
          * State unemployment taxes (SUTA)

          And we haven’t even started talking about excise taxes, worker’s comp, permits, licenses, or sales tax on cost of goods to do business. Yeah, I think Exxon probably paid some taxes, to the U.S. somewhere, somehow. Just because it isn’t labeled an “income tax” doesn’t mean its not a tax–any money payable to the government in order to do business is a tax. As a matter of fact according to the article above, taxation by the U.S. actually caused Exxon’s U.S. division to lose money.

          I’m starting to wonder if some of the people who read this article might have not gotten above a 4th grade reading level, or are there really people who are so petty that they must make a monster out of a corporation that provides valuable goods, provides good paying jobs and contributes to the U.S. economy while getting nothing back from said country for it’s efforts? Who are they listening too? Are they thinking for themselves or are they aping some professor’s lunatic rantings? Do they know the definition of a useful idiot? Maybe they’re just bitter and angry because they don’t understand that they’ll never get rich if they never take a risk. So they should get off their duffs already and start their own corporation. Easy enough to do. But then they’d understand what Exxon is saying and that would be admitting defeat. Small businesses employ over half of the work force, so do something great for your country instead of just pointing fingers at shadows.

          So why is Exxon staying here? Just to be nice and so us poor suckers can have gas in our car, heat in our houses, propane in our grills and RVs I guess, cuz there’s no other reason.

          Especially when considering there are people in China and the middle east who will be glad to work 3x’s as hard as any U.S. 9-5er for 1/3 of the pay. Remember when your mom told you to eat your vegetables because there were starving children in China/Ethiopia? Same dif. Where has our work ethic gone? Apparently overseas, where the best companies have followed.

    • Joseph Vialonga says:

      I notice you have FAILED to address the contents of the article regarding the actual taxes paid by Exxon and decide, in typical liberal fashion, to attack the company itself for some imagined fault. This time it seems to be they ahve somehow dissed America by doing business overseas to a large extent.

      Were you informed just a tad more you would see the company does business overseas because it is a more favorable business environment, the same reason many American companies do business to an ever increasing degree overseas.

      In their usual destructive and America bashing way the Democrats under this woefully inadequate president are raising or attempting to raises corporate income tax levels at a time when other major industrial countries are actually LOWERING their rates (France, Germany, etc)

      The evil (in your eyes) “BIG OIL” pays MORE income taxes and has a lower average return on investment then any other “for profit” business in the world at a measly 8%. McDonalds after tax profit is generally about 15%.

      Why don’t you liberals organize a march against McDonalds, Burger King et all instead of wasting your and everyone else’s time posting your totally uninformed tripe.

      • D Vaughan says:

        I sure wish dialog on important issues like this didn’t denigrate into political name calling.

        I agree with some of your points and depend upon XOM for a significant portion of my business’s revenue. I disagree with your point about XOM doing business overseas because of a more favorable tax environment. They are overseas because that is where the oil and gas is. They don’t operate in places like Nigeria because of the tax regime. With all the corruption I am sure they would like to be elsewhere, but that is where a lot of oil/gas is located.

        There are a lot of advantages to XOM being located in the US. Low corruption, stable fiscal and legal environments, educated workers, etc. XOM has invested far more in the US in the last couple of years not because of new favorable tax treatment (ie – XTO purchase $41 bil), but because shale gas has been a huge new opportunity to add to their reserves.

        As has been pointed out elsewhere, they have an obligation to maximize their returns to shareholders. That said I know XOM recognizes the benefits offered to it by being headquartered in the US and is willing to pay a reasonable tax burden to help pay for these benefits.

        The question is what is reasonable and competitive worldwide. If we take the democrat/republican coloring out the question, it seems like something reasonable people could arrive at. In the end hopefully… read more »

        …XOM isn’t overly happy and the taxpayers aren’t overly happy. Then we will know we have a reasonable balance.

    • Ken Deardorff says:

      I’m an XOM shareholder and I’d be happy to see the company not only leave the US but refuse to sell products here also.

    • Ted Stanfield says:

      I think that was the point. Between insane regulatory burdens and incredible tax burdens there are few reasons for continuing to maintain corporate headquarters here in the US. I appreciate the few large companies that have continued support US workers and have kept their companies here. Please, dont make the situation worse than it already is. Forty years ago, most managers believed that if a company didn’t return 13% on investment, it should either be sold or dissolved. At present, there are very few businesses that even approach 5% profitability and those are hedge funds with few employees, no inventory and virtually no infrastructure beyond an office and a couple of computers.

      • Don Sea says:

        Big Oil has workers in offices, in the field, as well as out on the oceans doing what they do for the product they are in the business of obtaining, refining and selling for whatever they think they can get away with.

        The fact that they refine as much as they do in the US, at the cost that they pay their employees, when they can get the same work in a foreign country for a lot less per hour of labor, makes me wonder just what it is that keeps them here. Especially if the awful tax burdens they must put up with. Face it, there is a reason why they remain in Houston, and it’s because they are making more as it stands, and if they could save a few dollars, they would be out of here like a rocket.

        There are few, if any international corporations, no matter where they started, that have any intentions of staying someplace if they can make more/save more by relocating elsewhere.

        There is no corporate loyalty to anything other than money. None.

      • RC Bradley says:

        Would you please understand that other than Mexico an Chili (and Ireland which by the way is bankrupt) the U.S.A. has the lowest taxes of any developed country in the world. I wish you all would stop complaining about this country and see what a great job we’ve actually done supporting our companies and it’s people. We are the richest country in the world..and got that way with much higher taxes then we have now.

    • M Mac says:

      Some comments have already mentioned reality, but I’ll reiterate the point…they and other oil companies are… Look at publicly available information for where the large investments are occurring: Qatar, Nigeria, the North Slope, Singapore, Russia., etc…

      While there is some investment here, the growth markets are NOT the United States. So while Schumer, the blowhard with the Unicorn, talks about subsidies, not, are nothing more than general manufacturing tax exemptions and accelerated depreciation, those item, if removed should be removed from every manufacturer. But know our tax policy will continue to drive investment elsewhere.

      Here’s the real question, why don’t we STOP subsidizing CONGRESS and their out of control spending which has caused this addiction to US tax payers hard earned income?

    • Rodger Phelps says:

      Mark, you really do want to see the US economy go into a tail spin. That is part of the problem in this country. The general population does not understand business. Businesses keep this country prosperous and it is the businesses that employ the good old US citizenry. Let’s keep businesses healthy so that more jobs are created. The Federal government picks on the oil industry because it is their products that are so subject to drastic change. And why is this? Because we have allowed countries who detest Americans to be the provider of our oil.

    • Neal Hayes says:

      Mark, did you read the article. The U.S. needs Exxon much more than Exxon needs this regulation-crazed administration. As a stock holder I would like nothing more than to see Exxon move to a country where it is appreciated and not constantly protrayed as an evil, boogeyman, who wants to destroy the earth.

    • Jim Doster says:

      Mark,

      Let’s see if we can put it in terms you can understand. Say you own a little mainstreet store that sells widgets. You sell 114K worth of widgets. You pay 26K in taxes. And all your other expenses equal 77K. Leaving you with a little less than 11K for your efforts at the end of the day.

      Sorry, let me step a little further down for you.

      You do yard work for a client and paid $114 for the job. It costs you $77 in costs for your equipment and gas. You pay $26 in taxes. You get to keep $11 You would not be happy having $11 to yourself after paying $26 in taxes, would you?

      So, if Walmart or any company you call “friendly” nets 10% it is OK. My favorite is Obama calling evil insurance companies that are only making 3% net. Just because it is in the billions makes it a bad thing.

      But Social Ponzi Programs like Social Security, Medicare, etc. are good. Fredie and Fannie had nothing to do with the housing crash. Anytime the Govt says they will back a loan, of course a private company will loan it.

      I have seen some of these big bad oil companies do more for technology than how about the… read more »

      …half a billion we lost on the solar company in CA that obama touted. Compare the jobs that money compared to say the 80K people employeed by an evil insurance company Obama hates that takes nothing from the Govt, but gives 80K jobs, pays medical claims, etc. AND makes 5% for their investors.

      Wait, who are those investors? You and me in our 401K’s, etc. which as bad as it ever got still will do much more for us than the money we invested to medicare, social security, etc. But these people who say they are poor still drive nice cars, have cable and flat-screen TV’s and could invest as easily as those in the upper middle class.

      Hey, tax big business more and KILL the middle class who has investments and retirement betting on them. Turn this country like many others with just two classes of people.

      Common sense is lost in entitlement.

  51. Stephen Wright says:

    Excellent Information.

    In my academic environment I am always looking for the details to back up my continuous debate with those who recklessly criticize our energy suppliers. Thanks for your well written and thoughtful post.

  52. Jeff Hubert says:

    Point well taken about the percentage of earnings that comes from refining and selling gasoline. However you state 6% on this page but 3% on the Gasoline and Earnings article. Which is it?

    • Harold Hunt says:

      6% worldwide; 3% US

    • Derek Frick says:

      Both are correct.

      He was referring to 4th Quarter of 2010 numbers on the other page and 1st Quarter numbers on this page.

      Dividie US Downstream earnings by total Earnings and you come up with the numbers.

      4th Quarter 2010 Downstream earnings were about 2.4%, 1st Quarter 2011 6.5%.

      • T Porter says:

        So, Exxonmobile maybe it’s time to call a meeting with the US Congress before they call one with you and explain this to them! What a novel idea! Then we get to hear what they have to say about what you have said. If your correct, if what you are saying is true, it would seem that they would have a hard time getting re elected next year. At the very least, they would know America is listening.