Big Oil’s Bigtime Looting
By Derrick Z. Jackson
President Bush yesterday told ABC-TV, “There ought to be zero tolerance of people breaking the law during an emergency such as this, whether it be looting or price-gouging at the gasoline pump or taking advantage of charitable giving or insurance fraud.”
Zero tolerance is meaningless when the White House lets the biggest looters of Hurricane Katrina walk off with billions of dollars.
We are not referring to the people you currently see in endless footage, crashing through storefronts and wading through chest-high water with clothes, food, and pharmaceuticals. Some folks are disgusting in their thuggishness, but a great many others are simply desperate, having now gone three days without food or water. The latter are living out one of the most famous hypothetical problems in moral reasoning—should a husband steal a cancer drug he cannot afford for his dying wife?
No such sympathy is to be extended to big oil. The nation has on its hands a disaster so profound that we have not even begun to seriously count the bodies in the floodwaters. It brings us as close as we may get in our lifetime to places like Bangladesh.
New Orleans is under martial law and will not return to normal for years. Members of the Red Cross, the Coast Guard, the National Guard, police agencies, and firefighters are sacrificing time and risking lives to save lives. Texas is opening up its school systems for homeless Louisiana children. Generous food wholesalers are giving away their stocks to passersby. The Astrodome is taking in the refugees of the Superdome.
In the midst of this charity, big oil looted the nation. The pumps instantly shot past $3 a gallon, with $4 a gallon well in sight.
In a thinly disguised attempt to act as if it cared about the people wading in the water, Chevron has pledged $5 million to relief efforts. ExxonMobil and Shell have pledged $2 million apiece. British Petroleum and Citgo have pledged $1 million each.
This is nothing next to their wealth. Of the world’s seven most profitable corporations, four are ExxonMobil, Royal Dutch Shell, BP, and Chevron. ExxonMobil is the world’s most profitable company, making $25.3 billion last year. It and the other three corporations had combined profits last year of $72.8 billion. ExxonMobil is also the world’s most valuable company, with a market value, according to Forbes magazine, of $405 billion. The combined market value of ExxonMobil, BP, Royal Dutch Shell, and Chevron is nearly $1 trillion.
And that was last year. A month ago, ExxonMobil, Chevron, and ConocoPhillips announced record second-quarter profits of $7.6 billion, $3.7 billion, and $3.1 billion, respectively. Royal Dutch Shell’s quarterly profits of $5.2 billion were up by 34 percent over the same period last year. Other well-known companies like Sunoco also had record second-quarter earnings.
If ExxonMobil were to maintain its current pace of profits, it would cross the $30 billion barrier for 2005. The company’s chief financial officer, Henry Hubble, bragged in classic corporatese, “Our disciplined project management and operating practices deliver the benefits of strong industry conditions to our shareholders.”
Those disciplined operating practices are hardly confined to the oil fields. Everyone knows that Bush does not really mean what he says about price-gouging at the pump, since he just gave energy companies the bulk of $14.5 billion in tax breaks in the new energy bill. Surprise, surprise. In Bush’s two elections, oil and gas companies gave Republicans 79 percent of their $61.5 million in campaign contributions, according to the Center for Responsive Politics.
If Bush really meant what he said, he would call for a freeze or cap on gasoline prices, especially in the regions affected most dramatically by Katrina. He would challenge big oil to come up with a much more meaningful contribution to relief efforts.
Insurance companies are expecting up to $25 billion in claims from Katrina. For ExxonMobil, which is headed to $30 billion in profits, to jack up prices at the pump and then only throw $2 million at relief efforts is unconscionable.
Stay fixated, if you wish, on the thieves and desperate families who are so much easier to catch on camera than comptrollers electronically stealing your cash. It is not pleasant to see anyone loot a store. But ExxonMobil and big oil are looting the nation, and no one is declaring martial law on them.
—Boston Globe, September 2, 2005