I participated in a blogger conference call with Ken Cohen, Vice President of Public Affairs of ExxonMobil. Ken was very gracious with his time and answered many, many questions.
A lot was discussed but I have outlined several topics that I thought were interesting.
To begin, the biggest issue facing oil companies in general is the lack of understanding about how the energy industry works in general and how ExxonMobile works in particular. First, ExxonMobil only produces 3% of the world's oil. There are approximately 170,000 gasoline stations in the US; ExxonMobil owns and operates fewer than 1000 of them.
Regarding the sudden increase in gas prices, Mr. Cohen said a lot of it is due to the unprecedented growth in other parts of the world, such as in China and India. He said that the growth in those countries was not unexpected, but their rate of growth was.
As we learned on Sunday's Meet the Press, Senator Dick Durbin suggested a "windfall" tax to keep ExxonMobil from getting profits to the heavens, as Senator Durbin said. Take a look at the amount of US taxes ExxonMobil pays compared to its US earnings:
These numbers are from the past five years:
US Earnings: $34.9 Billion
US Taxes Paid: $57.1 Billion
These numbers are from the first quarter of 2006:
US Earnings: $2.3 Billion
US Taxes Paid: 3.7 Billion
Those numbers are correct. ExxonMobil's tax bill to the US government exceeded its US earnings. I'd call that a windfall profit for the good Senator Durbin and his cohorts who are demanding even higher taxes from ExxonMobil.
Government regulations are also oppressive. As Mr. Cohen said, the oil industry is the most regulated industry in the nation. By the way, all this regulation makes these accusations of price-gouging absurd. In fact, there's even a group of government employees in the Federal Trade Commission, I don't remember this group's name - more information is coming soon, but these folks' jobs are to track and supervise the price of gasoline from all over the country every day. This data is computerized, so if there were any attempt at price gouging taking place, these folks would know immediately.
None the less, if the government holds hearings on the price of gasoline, Mr. Cohen said that executives from EM would go and testify. Their answer would be that there is no price gouging.
Many people have said the best way to increase supply of gasoline is to build new grassroots refineries, assuming they were to get government approval. According to Mr. Cohen, that isn't the best way to increase supply in the long term because it would take 5 - 6 years before we'd see any positive impact on the price of gas. Instead, he recommends expanding existing capacity, which is much easier. I was impressed with the fact that the oil industry has been able to get 27% more capacity out of 50% fewer refineries since 1981.
I asked Mr. Cohen about EM's efforts in developing other alternative energies. He said that in the 70's, ExxonMobil was involved in solar energy. As we see, solar energy really hasn't taken off with the American public. The biggest issue with alternative energies is that the technologies are simply not available at this point.
More information that we discussed in this call is being sent. As soon as I get it, I will update.
There was so much discussed I wasn't able to cover it all. Read more about the conference call at these :
Mary Katharine Ham at Hugh Hewitt - thanks to Mary Katharine for informing me of the CC.
Lorie Byrd at PoliPundit
John Hawkins at Right Wing News
Rob Bluey at Human Events
Pat Cleary at RedState
Peyton Knight at National Center Blog
Flip Pidot at Suitably Flip
Ed Morrissey at Captain's Quarters