Poor ExxonMobil. It barely cleared $10.8 billion in profit in the first quarter of this year, which still was second highest corporate profit posted ever. And yet, it still wasn’t enough for Wall Street analysts, who had predicted that ExxonMobil would make even more. Nomi Prins at The WIP figures ExxonMobil’s woes are “just pre-election spin, ensuring that whichever candidate gets into the Oval Office doesn’t try to take some of their profits away by taxing them.” Tyson Slocum, director of Public Citizen’s Energy Program, took the message to The Hill this morning, testifying before the House subcommittee on Highways and Transit about the oil industry profits and some serious manipulation of the futures market by financial speculators.
If you’re a serious policy wonk, you can read Slocum’s full testimony at the Public Citizen site. It’s loaded with some great explanation of how we came to our current energy crisis. The crisis, of course, being the increasing financial burden of higher gasoline prices and not the ExxonMobil’s missed projections.
Pay particular attention to Slocum’s argument that the federal government must re-regulate the futures market if we are to have any hope of bringing these high gas prices under control.
This era of high energy prices and record oil company profits isn’t a simple case of supply and demand, as the evidence indicates that consolidation of energy infrastructure assets, combined with weak or non-existent regulatory oversight of energy trading markets, provides opportunity for energy companies and financial institutions to pricegouge Americans. Forcing consumers suffering from inelastic demand to continue to pay high prices—in part fueled by uncompetitive actions—not only hurts consumers economically, but environmentally as well, as the oil companies and energy traders enjoying record profits are not investing those earnings into sustainable energy or alternatives to our addiction to oil. As a result, our consumption of fossil fuels continues to grow, and the impacts of global warming take their toll on our environment.