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Tuesday, February 13, 2007

Exxon and the Lapdog Press

My PR agent (yeah, I have one) sent me the following story...

Exxon Mobil CEO: Oil could be much cheaper
Says that oil would be between $40 and $45 a barrel if risk of disruption were less; also says governments should address climate change.

February 13 2007: 2:21 PM EST
HOUSTON (Reuters) -- U.S. crude prices would be between $40 and $45 a barrel if risks of supply disruption were not in the market right now, Exxon Mobil Chief Executive Rex Tillerson said on Tuesday.

Separately, Tillerson said it is prudent for global governments to develop and implement policy to address climate change.

Here is my reply to her...

Sure, Exxon Mobil increased capital and exploration spending by 12% to nearly $20 billion in 2006. But it recorded a profit of $39.5 billion for 2006 -- $2.5 billion more than analysts anticipated. In other words, it could have spent another $2.5 billion on exploration and still met estimates.

And while Exxon’s production was up year over year, oil production fell by 1% in the most recent quarter. Natural gas production also fell to 9.3 million cubic feet per day from 9.8 million cubic feet per day.

In 2006, Exxon spent $25 billion on repurchasing its shares. Yep, more than what it spent on exploration and production. The company has a history of this -- Exxon Mobil spent more money in 2005 buying back stock than it did on capital spending, exploration and research and development.

Adding up both share buybacks and boosting its dividend, Exxon spent $32.6 billion in 2006.

So in sum, if Exxon wanted to see $40 oil, it could spend a lot more on exploration and more importantly, promote conservation. I don’t think it wants to see lower oil prices at all. The tighter supplies are, the more it can charge.

As for Tillerson’s statement that “it is prudent for global governments to develop and implement policy to address climate change”, well I agree with that. But I’d like to ask Mr. Tillerson why he thinks it is prudent for
Exxon to spend $16 million funding a disinformation campaign on global warming.

And I’d also like to ask him why, even now, Exxon provides financial funding for a “think tank” that offers scientists $10,000 a pop to "critique" findings in a major global warming study.

In short, Mr. Tillerson’s statements are shameless, self-serving, and misleading. Therefore, I expect them to be repeated without question across the mainstream media.

XX Don't get me wrong -- I have nothing against a company making profits. But they shouldn't be misleading about their motives, and I think Exxon Mobil's action on Global Warming are reprehensible.

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