May 13 Daily News Editorial
America's major oil companies want you to start seeing them the way they see themselves — as the victims and the good guys.
Recently, when President Barack Obama had the temerity to suggest it might be time to consider eliminating the long list of special tax breaks, depletion allowances, foregone royalties and sweetheart leases currently extended by the federal government to major oil producers, he was called on the carpet by a man named Ken Cohen, an Exxon Mobil VP for public and government relations.
"In times of high profits and high earnings, (some politicians) feel like they need to demonize our industry," said Cohen, probably putting on his best hurt-puppy face while he was talking.
There's no doubt that earnings and profits are high. The six largest American oil companies returned profits of an aggregate $80 billion in 2010 and are well ahead of that schedule for 2011, with Exxon's first-quarter profits exceeding $10.6 billion.
At the same time, this immensely profitable industry remains entrenched at the front of the government welfare line, collecting an estimated $5 billion per year in outright government subsidies and tax abatements and perhaps another $3 or $4 billion in other special favors and considerations on the federal and state levels.
Exxon's directors felt at liberty to pay their CEO $21.2 million in 2010, meaning he banked more in a working day than one of his typical employees earned in a full year.
Some of these earnings have always been diverted to political largesse, making the industry's position on Capitol Hill enviable and perhaps unassailable. While there's a long list of petro-state Democrats who can be counted on for loyal and reliable voting, oil and gas interests are all but unchallenged within the Republican Party.
The budget blueprint rolled out earlier this year by Rep. Paul Ryan and endorsed by just about every prominent GOP leader in the U.S. House and Senate called on Americans to accept rollbacks in Social Security, Medicare and aid to education. It left every significant oil company tax break intact, enhancing a few.
What's all this buying us? Not much, and certainly not insulation from price rises and speculative activity on the world market. On those occasions, we're reminded that U.S.-based oil companies are multi-national corporations and that Americans will be required to pay market rates for oil. It's also when oil interests and their political spokesmen tend to agitate for more drilling rights, which will allow them to produce more petroleum that will be pipelined into the same world market. The process ends with the highest bidder gaining the oil, regardless of where it was sucked out of the ground.
Capitalist economies traditionally allow business interests to exert considerable influence on government and provide financial rewards for companies that "play the game" well. No one plays it better than do the Oil Barons, who now flex their muscles on a global stage.
So, now they want all that and immunity from criticism and oversight? Thanks, but we'll pass.