The other day I was reading about the companies at the top of earnings list in the US and not surprisingly Exxon Mobil was firmly at the summit, racking up nearly $40 billion in 2006. This is an income figure, not sales. I'm sure the shareholders are happy with the performance. They have seen the value of their holdings double since 2004 and with the price of oil at all time highs, there in no end in sight.
Exxon has also been at the top of another list in terms of market capitalization for quite some time (currently at $455 billion). I remember when GE or Microsoft had that distinction years ago.
With the price of oil at all time highs and uncertainty fueling the price ever higher, it is understandable why some people are wary of these outsized profits. I suppose the math is a simple one. Given a steady profit margin, the higher the price of oil climbs, the profits continue to march upwards in lockstep. A capitalistic view would consider the outrageous profits reaped by oil companies as quite natural and deserved. After all the windfalls are based on bets made by these companies and natural market conditions have done the rest.
But should it be acceptable for these companies to have so much power and monopoly over the energy markets? Conspiracy theorists have always viewed the oil companies with distrust. I am not sure if all the negative views are valid, but one has to wonder if these companies wouldn't do anything in their power to squelch any attempt at competition from others such as those promoting alternative sources of energy.
If I were Exxon (or Shell or Chevron, for that matter), I would use my clout to stifle anything that seemed deleterious to my operations and my profits. I would guard my turf with a militant zeal, I would infiltrate governments, sway opinions, and engage in espionage to make sure all potential threats are neutralized before they can reach a meaningful level. Of course I would fill my legal departments to capacity to make certain that all my efforts are perceived to be within a legal framework, at least on the surface.
I would do all that and more to make sure that my position is never jeopardized while keeping an image of legitimacy. $40 billion in one year alone can be of immense help in achieving my goals.
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