Exxon posts record-breaking income

AMANDA POPOVITCH STAFF WRITER

AVP722@CABRINI EDU

With the demand for oil continually rising, Exxon Mobil Corp. posted the highest annual net income in U.S. history.On Jan. 30, 2006 the company reported an astounding $36.13 billion in profits for the year. This surpassed the previous high of $25.3 billion, also set by Exxon. With these numbers, it is easy to believe that Exxon is making most of its money at the pump. However, gas prices are far from the only factor contributing to this substantial profit.

Exxon itself cited its ability to complete projects on time and its own fiscal responsibility as two of the major reasons for the significant profits. Also, slightly higher profits in the refining sector helped make up for the decrease in production due to hurricanes on the Gulf Coast. So, while higher gas prices were certainly helpful, they are definitely not the only major source of income for Exxon.

John Heiberger, associate professor of business administration, said, “Clearly,high gas prices are part of the reason they had such big profits, but the major reason is the amount of product they are selling around the world. It is the basic economic challenge of supply and demand, especially demand in the U.S., China and India and limitations in supply.”

Other oil companies in the United States joined in with soaring profits. Coming in a close second and third to Exxon were Chevron, with $14.1 billion, and ConocoPhillips, with $13.53 billion. In total, the three largest oil companies in the U.S. netted over $63 billion for 2005.

These hefty profits have also spurred on talks in Congress about creating a windfall profit tax. This is a tax placed on barrels of oil when they exceed a set price. So, hypothetically,if there were a 50 percent windfall profit tax on barrels of oil that cost over $40, oil companies would be forced to pay half of the price of that barrel of oil in taxes. While this may seem like a reasonable idea, many experts believe that this tax will not improve gas prices and is economically unsound.

“While vilifying big oil companies may be politically popular right now, measures like the WPT would reduce supplies and hurt energy consumers in the long run,” said Ben Lieberman, senior policy analyst in the Thomas A.

EXXON, page 4 been passengers during a drunken-driving accident or arrest. The third group was self-consequence, for those who had caused anaccident or had been arrested themselves. Members of the self consequence group showed more understanding of the risks of drinking and driving, according to the Journal Studies of Alcohol. People in the self-consequence group recognized negative consequences of the behavior to be more likely than did those in the friend-consequence group. However, the understanding of risks failed to refrain students in the self-consequence group from driving under the influence repeatedly,reported The Journal Studies of Alcohol

Hyson said, “All of the campus community, including students, staff and faculty, need to think about our actions and be proactive in our choices with regard to drinking and driving.

Although my office does provide educational outreach on this issue, I plan to increase our efforts to prevent future tragedies.”

Matthew Stawecki, a freshman finance major, could not fathom why college students drink and drive even after having experienced the negative consequences of it before.

Hiester was also left questioning by asking, “Don’t college students think about the way they may be affecting others while they repeatedly choose to drink and drive, even after suffering the consequences?”

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