Exxon Records Biggest Profit in US History, on Eve of Possible Recession

The Olympics are coming up, and excepting the host country—China—for risking the reputation of hosting the 2008 Genocide Olympics, all kinds of records will be set. Today, other accomplishments are gaining headlines. ExxonMobil, the world's largest corporation reported the biggest profit in the history of the United States: $11.06 billion.

That is tough to top, in any regard. The first, and obvious question: why, then, are gas prices still high? Click the image to the right to watch Jim Lehrer ask Chevron Corporation's Peter Robertson exactly that question. Chevron, while it fell short of ExxonMobil's record this quarter, itself set a company profit record.

"Over the last five years, we've earned $53 billion. And we've invested $53 billion," Robertson said. "Now, the precise number is a coincidence, but it's a fact. So, we invest. And, prices are going up. That tells us the market is saying we need more investment. We need more supply. Prices go up, we have more money to invest, we invest it, and hopefully that will bring on the supply over time."

Often, the word used to describe you or I at the short end of the pump, conveniently left out of Robertson's explanation here, is gouged. In general, the only people making more money in the United States than the oilmen are big-time bankers. Energy and money are the ones across the country making the windfall.

Only, this simple picture may soon grow far more complicated when you look at them both at the same time. As it turns out, Wall Street bankers have stuck a whole lot of wrenches in the country's economic gears. Subprime mortgages could be dragging the country into a recession. Say, for a moment, that the developing world doesn't keep US growth afloat. Americans lose houses, savings, and the extra wallet cash that makes $3.05 a gallon doable.

Oil companies do as they may—government doesn't regulate gas prices, after all, it taxes them, yes? At the same time, then, let the tens of billions go into, as Mr. Robertson explains it, reinvestment into the oil industry. Because, looking further down the line into the latter half of the 21st century, surely there's a future in driving around gas-guzzling vehicles with the passenger and back two seats empty, right?

"Supply over time," as Robertson says, may be a goal, but he knows, as we do too, at least according to the federal Government Accountability Office, that time is running out.

The last five years of ExxonMobil's stock price, roughly the time of the Iraq war:

(Chart from Yahoo!.)

Comments

[SEMORGAN]

truTV’s Thrilling New Original Series BLACK GOLD

Digs into the High-Stakes World of Texas Oil Drilling

Roughnecks Risk Life and Limb to Tap Into America’s Most Crucial Energy Resource

Gripping Series about Life on an Oil Rig Premieres Wednesday, June 18, 10 p.m. (ET)

From the creator of Deadliest Catch and Ice Road Truckers comes one of the most explosive, relevant and thrilling original series of the year. truTV’s BLACK GOLD, premiering Wednesday, June 18, at 10 p.m. (ET), follows the high-stakes world of drilling for oil in west Texas. With the ever-increasing tensions from rising gas prices and dependency on foreign oil, BLACK GOLD goes inside the world of men who risk their lives drilling for American crude. It’s a multimillion-dollar race to tap into the nation’s last remaining reserves, and BLACK GOLD presents an unfiltered look at lives on the line.

It costs oil men millions of dollars to drill two miles into the Earth in search of crude, and every second can lead to boom or bust. Each one-hour episode of BLACK GOLD focuses on oil rigs and the men who hope to strike it rich. With only 50 days to successfully locate and retrieve the precious commodity, the roughnecks, as they are called on the rig, endure exhausting, dangerous work demands and face losing something more valuable than the money of the oil men. They risk losing their own lives. It all adds up to big risk, big reward, big characters and most of all big business.

BLACK GOLD gives viewers front-row seats to three different rigs – Longhorn, Viking and Big Dog – funded by two oilmen who have risked their fortunes in hopes of striking it big and keeping the drill bits turning. In the end is the moment of truth – was it all worth it? It’s a multi-million dollar roll of the dice. With enough time to drill only three wells, they have to contend not only with such elements as scorching heat and sudden lightning storms, but also the danger of working on the rig itself, where anything can go wrong at any moment and at every turn.

Each rig is led by the driller, who takes care of everything from mechanical issues to manpower problems. The most challenging part for drillers is finding men brave enough to lift and move tons of iron and trying to ensure that these hard-partying roughnecks will actually show up for work. For many drillers, most of their time is spent trying to teach their most inexperienced roughnecks – or worms as they’re called in the oilfield – how to survive on a rig and how to avoid getting hit with iron pipes flying around. Drillers know that just one wrong move can cost a man his finger, his arm or even his life.

The oil boom has brought the 60-year-old Longhorn rig out of retirement. Gerald, an old-school driller, with 32 years of experience and a hand missing half a thumb from a long ago mishap, leads the rig and expects a lot from his crew. He isn’t afraid to tell them when they’re not cutting it.

Just 500 yards away is the brand-new Viking rig, where the technology and the men in charge are a very different sort. While Gerald, a tough leader who has only nine toes left, barks at his roughnecks, Viking driller Wayne treats his young crew like his family. Both Longhorn and Viking are drilling for oilman Mike LaMonica and his upstart company, ExL Petroleum. Mike’s eager to cash in on the high prices being paid for crude, but if this play doesn’t work out, it could put them under.

The final rig is the Big Dog. Its name fits since it’s larger than the competition and unlike the other rigs, Big Dog driller Tim, does not have decades of experience. Big Dog is drilling

for local legend Autry Stephens, who is one of the most successful independent

Jaime Yandolino truTV 212/692-7844 jaime.yandolino@turner.com

Jaime Yandolino

Public Relations Manager

truTV

600 3rd Ave

New York, NY 10016

212-692-7844