TPT May 2008

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From the AmericaS
79 May 2008 ›
totaled $3.4 billion in the first two months of this year, down 2.8
per cent from $3.5 billion in the same period of 2007. The bank
said that it expects little or no growth in such remittances this
year after a 1 per cent rise to a record $23.98 billion in 2007.
Remittances from abroad constitute Mexico’s second-largest
source of foreign currency inflows, after oil exports.
Oil and gas
Oil companies are challenged on high profits,
low investment in alternative energy
“On April Fools’ Day, the biggest joke of all is being played on
American families by Big Oil, who are using every trick in the
book to keep billions in federal tax subsidies, even as they rake in
record profits.” The accuser was Rep Edward Markey, chairman
of the House Select Committee on Energy Independence and
Global Warming and a longtime critic of the US oil industry. The
occasion was a congressional hearing on the topic ‘Drilling for
answers: oil company profits, runaway prices, and the pursuit of
alternatives.’
Writing in the Houston Chronicle, David Ivanovich of the paper’s
Washington Bureau reported that the energy executives invited by
the committee tried to defuse some of Mr Markey’s outrage over
industry profits – tallied by the Massachusetts Democrat at $123
billion in 2007 – at a time when many Americans are struggling to
find the cash to top up the fuel in their tanks. J Stephen Simon, the
senior vice president of Exxon Mobil Corp, and Robert A Malone,
president of BP America, cited figures they said suggest the
industry’s profits last year were not out of line.
Mr Ivanovich wrote, “Oil and gas companies, the executives said,
earned an average of 8.3 cents per dollar of sales, compared with
7.8 cents per dollar for [companies in the Dow Jones Industrial
Average] – which include Exxon Mobil and Chevron.” (‘Profits
realistic, oil execs insist,’ 1 April).
Mr Simon said that Exxon Mobil’s effective tax rate in 2007 was
44 per cent, compared with 30 per cent on average for 80 US
companies surveyed by Tax Notes, a print and online news service
covering tax issues. He also asserted that, over the last five years,
Exxon Mobil’s US tax bill has exceeded the company’s US earnings
by $19 billion.
But the ensuing ‘intense exchanges’ observed by Mr Ivanovich
had the oil executives on the defensive. Mr Markey quickly bored
into Exxon Mobil, asking why a company that earned more than
$40 billion in 2007 – the most ever earned by a US company in a
single year – has plans to invest only $100 million over 10 years in
renewables and alternative energy programmes.
Mr Simon replied that officials of his company had examined
a range of alternative energy sources and were unsatisfied
with their potential: they want instead to focus on leapfrogging
current technologies and find a breakthrough for the world’s
energy concerns. As for Exxon Mobil, Mr Simon said, “The
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