Despite record profits, again, Exxon's production of crude oil is down, again. But no worries: Senate Republicans are on the job.
Ho-hum — another record-breaking quarter for Exxon, $11.68 billion in profits. But the company’s share price declined, down $2.84 an hour before the close of trading in New York. The problem? Profits are up, but production is down, again.
According to Exxon, geopolitical constraints and contract provisions are tying the company’s hands.
Oil and gas output tumbled 7.8 percent after Venezuela seized assets, Nigerian workers went on strike and governments from Angola to Russia kept more crude under contracts that give them a bigger share when prices rise.
But the problem appears to be a little bit bigger than that, since Bloomberg also observes:
Exxon Mobil pumped the equivalent of 3.8 million barrels of oil a day, its lowest average since the third quarter of 2005. Crude production declined in every region where the company has wells, and gas output fell everywhere except Russia, Europe and Africa.
Remember this every time you hear the words “offshore drilling” mentioned. Offshore drilling will have only a trivial influence on the price of gas and will not decrease U.S. dependence on foreign oil one whit. Only a massive reduction in demand and the development of alternative sources of energy will achieve such a promised land. But even just the prospects of increased production could do wonders for the share price of Exxon, should the oil company get some new leases.
Exxon’s executives must currently be tearing their hair out at their inability to increase production when the price of oil is at an all-time high. Because, as the events of the past few weeks have demonstrated, when the price of oil gets high enough, demand destruction follows, and the price inevitably drops. And suddenly, $11 billion in quarterly profits is ancient history.
Doing right by Exxon has always been an overriding policy goal for the Bush administration, and now is no exception. Republicans in Congress are snapping to attention. On Wednesday, Senate Republicans successfully filibustered an attempt by Democrats to renew tax credits for solar and wind production, with more Republicans voting against the cloture motion to end debate than had done so in previous efforts to get the credits extended.
Why the renewed Republican vigor? Republicans are taking advantage of the current concern over energy prices to strengthen their negotiating position. No new tax credits unless Democrats allow more offshore drilling.
More Related Stories
- If Alex Pareene was a cable news executive...
- Portland's senseless war on fluoride
- Graphic video reportedly shows possible London machete attack suspect
- What economists get wrong about the jobs crisis
- Ted Cruz: "I don't trust the Republicans"
- Pa. governor "can't find" any Latinos to work in his administration
- Glenn Beck: "The American people have just been raped"
- "Original Coca-Cola had a very small amount of cocaine"
- Corporations accused of wrongdoing win battle to keep identities secret
- Weak, incompetent Democrats blow another one
- Lois Lerner, IRS disaster
- Cyber attacks could cause the next world war
- Donald Rumsfeld worried that marriage equality will lead to polygamy
- Experts: Fox News spying scandal a game-changer
- Biden cracks Obama teleprompter joke
- IRS official takes the Fifth: "I have not done anything wrong"
- Lessons from Lincoln leave gay immigrants behind
- Los Angeles elects first Jewish mayor
- Peter King: There's "hypocrisy" over aid by Oklahoma senators
- Anthony Weiner announces run for NYC mayor
- How policy nihilists in the Senate doomed LGBT immigrants
Featured Slide Shows
The week in 10 picsclose X
- 1 of 11
Lisa Montgomery embraces her nephew Thursday after a tornado tore apart her home in Cleburne, Texas. The twister killed six people and destroyed entire swaths of the North Texas town.
Credit: AP/LM Otero
Jack McMahon, the defense attorney for abortion doctor Kermit Gosnell, speaks outside the Criminal Justice Center in Philadelphia Tuesday. His client was convicted of killing three babies in his clinic, and will serve multiple life sentences.
Credit: AP/Matt Rourke
A photo taken Monday captures Vice President Joe Biden's response to a Milwaukee second-grader's innovative proposal to end America's epidemic of gun violence. This guy!
Credit: AP/Jenny Aicher
Sen. Rand Paul, R-Ky., flanked by a grouper-eyed Michele Bachmann, addresses the IRS' admission that it targeted Tea Party groups in advance of the 2012 election. In an op-ed for CNN Thursday, the Kentucky senator slammed the president for his faux outrage.
Credit: AP/Molly Riley
Ousted IRS chief Steven Miller is sworn in on Capitol Hill Friday. Miller testified before the House Ways and Means Committee on the extra scrutiny the agency gave conservative groups applying for tax-exempt status.
Credit: AP/J. Scott Applewhite
Attorney General Eric Holder pauses as he testifies on Capitol Hill before the House Judiciary Committee Wednesday. Holder is under fire, among other things, for the Justice Department's gathering of phone records at the Associated Press.
Credit: AP/Carolyn Kaster
O.J. Simpson sits during an evidentiary hearing at Clark County District Court in Las Vegas, Nev., Thursday. Simpson, who is currently serving a nine-to-33-year sentence in state prison for armed robbery and kidnapping, is using a writ of habeas corpus to seek a new trial.
Credit: AP/Las Vegas Review-Journal/Jeff Scheid
Major Tom to ground control: On Sunday astronaut Chris Hadfield recorded the first music video from space, a cover of David Bowie's "Space Oddity."
Credit: AP/NASA/Chris Hadfield
When it rains it pours. President Barack Obama speaks during a news conference Thursday with Turkish Prime Minister Recep Tayyip Erdogan, inexplicably inspiring an #umbrellagate Twitter meme.
Credit: AP/Jacquelyn Martin
A smoke plume rises high above a road block at the intersection of County A and Ross Road east of Solon Springs, Wis., Tuesday. No injuries were reported, but the the wildfire caused evacuations across northwestern Wisconsin.
Credit: AP/The Duluth News-Tribune/Clint Austin
Recent Slide Shows
- 1 of 11