Usually when a company posts a great big honking profit it is pretty good news all the way around. Corporate profits are what get investors jazzed up and help the market. Helping the market go up is good news for most Americans–and for others around the world as the recent weakness once again demonstrates.
But it is not good news when an oil company does it–and particularly when all oil companies do it. It makes me shudder to think how the politicians will deal with this–and that was before I read Sen. Schumer’s sarcastic and totally populist remarks in this Bulldog report.
ExxonMobil is one of the most efficient, organized, impressively managed organizations in the world. The oil industry is without question the most scrutinized and investigated industry when it comes to compliance on all fronts–environmental, safety and anti-trust. There are continual investigations going on relating to price-fixing–and all come to the same conclusion. No evidence exists–(except for a few rare and largely inconsequential stupidities by lower level managers). Prices are set by the market. Oil prices are determined by supply and demand–supply is tight, demand is escalating.
But ExxonMobil does have some responsibility for the quagmire the oil industry is in being the least respected, least trusted of all industries. Even slightly worse than (gasp!) the media itself. It bears responsibility because as the giant in the industry it not only failed to lead in addressing the huge shortfall in public understanding of the industry, its benefits, its relatively modest ROI compared to other industries, etc., but it also stood in the way of the effort of other leaders to address this. Now it is not only ExxonMobil that is suffering from the most massive license to operate challenge, it is the entire industry. And if they don’t address it and address it fast, it is going to hurt all of us.
The loss of public confidence in an industry as important as this industry could be devastating. More oversight, more regulations, greatly increased cost of doing business, increased sending of our plants and facilities overseas, etc., etc. The strategic important to our country is immense, as is the economic impact of this wildly out of balance public perception. The crisis was on us already–and then we get these profit reports.