Big Oil is laughing all the way to the bank, and the industry owes it all to you and me. The more regular Americans suffer, the richer members of the Big Oiligarchy get.
Thanks to the highest gas prices we’ve seen in years, Chevron posted better-than-expected earnings of $7.7 billion today despite a decline in production. But of course, Chevron is hardly alone in its obscene profiteering.
Combined, the top five Big Oil companies made $35.1 billion in profits in the second quarter of 2011, almost 10% more than the second quarter of 2010.
Big Oil once again has American families to thank for these enormous gains: Oil profits grow when Americans pay more for gasoline. Because oil averaged $107.35 a barrel during the second quarter—a 39 percent increase over 2010—Americans are forking over more than a third more at the pump than they were just a year ago.
While high prices pad oil company coffers, they also make life even more difficult for families struggling to recover in the Great Recession’s wake. Bernard Baumohl, chief global economist at the Economic Outlook Group, notes that every penny increase in gas prices drains $1 billion out of the economy each year.
The Center for American Progress goes on to point out that it’s not only after we visit the gas pump that Big Oil takes us for a ride. You and me are footing the bill for massive taxpayer handouts that Big Oil is happy to receive in order to boost those earnings numbers. We’re handing these highly profitable companies $4 billion in subsidies every year, subsidies that are not necessary and do not — as we can all attest — help keep gas prices low.
So why on Earth are taxpayers still forking over so much money to the Big Oil welfare queens? The answer probably has something to do with the fact that companies like Chevron lobby aggressively to protect subsidies for Big Oil — Chevron alone spent nearly $3 million in the first quarter of this lobbying our federal government.
As the debt ceiling debacle comes to a head, you’ll likely hear plenty of oil industry flacks and their apologists in Congress excusing Big Oil’s profits and defending Big Oil’s taxpayer handouts. One of Chevron’s favorite lines is that the company is investing those profits to help spur our economy. Don’t be fooled: In reality, making themselves rich — no matter at whose expense those riches come — is all that matters to the folks at Chevron, which spent $1 billion of its second quarter profits to buy back its own stock in order boost share prices, further enriching its wealthy board members, senior executives, and shareholders.
Tell me again why we’re even talking about cutting vital social services like Medicare and Social Security to balance the budget — services that millions of Americans rely on just to get by — instead of ending taxpayer handouts to Big Oil?