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As oil bosses celebrate record profits...
Hammered by high gas prices

May 5, 2006 | Page 12

ELIZABETH SCHULTE reports on the growing anger at skyrocketing gas prices.

GAS PRICES are taking a big bite out of workers' wallets--but the giant oil companies are celebrating record profits.

Last week, crude oil prices jumped above $75 a barrel, the highest level in more than 25 years, and prices for gas soared past $3 a gallon across the country.

Though the U.S. economy grew at a solid 4.8 percent rate in the first three months of the year, according to figures released by the government last week, rising gas prices are what ordinary people are feeling. Thus, a Washington Post/ABC News poll found that 59 percent of people rated the economy as "not good" or "poor."

And no wonder. "Compared to a year ago, I pay $15 more a day in gas," Miguel Gonzalez, a 67-year-old cab driver from Queens, told the New York Times. "I only take home $100 a day, so that's my lunch and dinner right there."

Drivers at one depot told the newspaper that most rent their cabs for 12 hours at a time, paying up front in cash for a vehicle with a full tank of gas that they have to refill when they return it. "That's $100 a week," said another cab driver. "That's your grocery bill."

In response to growing outrage over gas prices, George W. Bush was forced to announce that his administration would take steps to ease the pain at the pump. But none of his proposals amount to much.

Bush announced that the government was suspending its purchase of fuel to replenish the Strategic Petroleum Reserve, and investigating possible price gouging and price fixing. Bush also took the opportunity to suggest easing environmental regulations that require the use of cleaner-burning fuel additives to cut down on pollution during the summer.

Nevertheless, according to the Washington Post, experts say that this "could save consumers a few cents per gallon at best." Oil consultant Philip Verleger told the Post that the president's proposals were "more or less like prescribing aspirin to take care of prostate cancer."

Meanwhile, the oil companies are laughing all the way to the bank. The same week that drivers faced new increases at the pump, ExxonMobil announced that its net income rose to $8.4 billion in the first three months of the year, and that its already record sales climbed 9 percent to $89 billion.

Anyone associated with the oil industry is becoming filthy rich. Like Lee Raymond, who retired as Exxon's chair and chief executive in December.

From 1993 to 2005, Raymond received more than $686 million in compensation. "That's $144,573 for each day he spent leading Exxon's 'God pod,' as the executive suite at the company's headquarters in Irving, Texas, is known," reported the New York Times.

In his final year alone, Raymond received more than $400 million. What did he do "earn" it? Commission fake research into climate change to undercut reports about the threat of global warming, according to New York Times columnist Paul Krugman.

"A 2003 study, by Maxwell Boykoff and Jules Boykoff, of reporting on global warming in major newspapers found that a majority of reports gave the skeptics--a few dozen people, many if not most receiving direct or indirect financial support from ExxonMobil--roughly the same amount of attention as the scientific consensus, supported by thousands of independent researchers," Krugman wrote in the Times.

Of course, ExxonMobil and its executives aren't the only ones raking it in. All together, the three biggest oil companies--ConocoPhillips, Chevron and ExxonMobil--made some $16 billion in profits during the first three months of 2006.

Meanwhile, the Associated Press reported, "If not for continuing production problems caused by Hurricanes Katrina and Rita last summer, Chevron said it would have made an additional $300 million--an amount that would have generated the highest quarterly profit in the company's 127-year history."

With anger at the oil industry growing, members of Congress are posturing as defenders of consumers. Senate Republicans have floated the idea of sending out $100 rebate checks to taxpayers, and suspending a federal tax on retail fuel sales.

Republicans are even talking about cutting back on some of the billions of dollars in tax breaks doled out to the oil industry when the administration's energy bill passed in August 2005. There are, however, strings attached--including incentives for further domestic drilling, as in the Arctic National Wildlife Refuge.

For their part, Democrats are seizing on the opportunity to make political hay out of the Bush administration's connections to the oil industry. Officials at the Democratic Congressional Campaign Committee sent out a memo out to House candidates "offering guidance on using the issue to their advantage," reported the New York Times. "The Republicans are the party with the keys to the executive washrooms of Halliburton, Exxon and the big oil corporations," said Rep. James Clyburn (D-S.C.).

But despite this rhetoric, several congressional Democrats have the same privileges. After all, 75 House Democrats and 25 Democratic senators voted with Republicans to help pass Bush's energy bill last year.

No matter what Bush says about corn, cooking grease, grass, wood chips or soybean oil, there won't a substitute for oil and gas as long as it makes the oil bosses so much money. That's what truly greases the wheels of Washington.

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