In 2007, US oil giant Exxon Mobil posted an annual profit of $40 billion — more money than any other company in history.
In the first quarter of 2008, the five major American oil companies reported profits of $36 billion.
Oil reached $130 a barrel last week, and Americans began paying almost $4 a gallon — about $1 a litre — at the pumps.
Last week, senators on the US Judiciary Committee challenged senior oil executives to explain the current high prices, in light of record profits.
J. Stephen Simon, executive vice-president of Exxon Mobil, who by the way makes $12.5 million a year, explained that the industry needs to reap unprecedented profits “in the current up-cycle” to pay for long-term investments to protect them when profits are down.
So how long will this up-cycle last?
How many more years can consumers expect to be padding the industry’s rainy day fund to the tune of billions a year?
According to Exxon’s website, “The global demand for energy in the year 2030 will be about 40 per cent higher than it was in 2005.”
Even if the bad times begin on January 1, 2031, they’re going to need a big jam jar to hold it all.
Earlier this month the Toronto Star reported that Canadian tax subsidies to oil companies operating in the Alberta oilsands had reached $140 billion a year.
A 2006 Commons committee report called for an end to these special tax breaks, something Finance Minister Jim Flaherty now says will happen after 2010, though he gave no clear reason why it needs to take so long.
The oilsands came briefly to the public eye this year when 500 migrating ducks flew into a giant tailings pond and died.
The ducks were a symbol of the environmental nightmare that is the oilsands project.
Oilsands development pollutes rivers, strip-mines forests and spews greenhouse gas emissions on an unimaginable scale.
Downstream from the oil sands, the Mikisew Cree and Athabasca Chipewyan people suffer from elevated rates of rare cancers associated with chemical pollution.
When they hired a private environmental consultant to test their water and food supply, he reported high levels of several kinds of carcinogens associated with oil production, including PAHs, mercury and arsenic.
As the ice caps melt and the ocean rises, there’s an obvious up side to higher gas prices.
A headline in Wednesday’s Globe and Mail auto section announces “small cars are selling like hotcakes.”
Higher fuel prices drive consumers to look for greater efficiency, which in turn drives producers to build more efficient machinery.
It’s pretty obvious that if North Americans had to pay European rates for gas, we’d drive like Europeans — less often, and in smaller cars.
Europe’s gas prices have been high for decades, because of high taxes.
Canadians could live with higher gas prices, and learn to consume less fuel, if their money was going to pay for better public transit, research on increased efficiency and the enforcement of tough environmental regulations.
But paying ever-rising prices and at the same time dishing out tax handouts to pay for runaway corporate profits and six-figure executive salaries does seem a bit much.
Why have we forgiven billions of dollars in taxes for so many years without attaching conditions governing GHG emissions and water and air pollution?
Why the rush to develop the oilssands using methods that waste water and energy, pollute air and water, destroy forests, and produce huge amounts of carbon?
Oil companies make their living by extracting a public resource, refining it and shipping it, and selling it back to the public.
Government has a right and a duty to see that they do it in the cleanest and most environmentally responsible way possible, making no more than a reasonable return on investment, and the way they’re going at the oilsands today ain’t it.
A succession of Canadian governments has been all too keen to give too much to big oil, and ask too little back.
It is time to right the balance, not just with a carbon tax, but with tough environmental regulations and equally tough enforcement.
No matter what it would cost the oil companies to clean up oilsands development, one thing is for certain: they can afford it.
Al Pope won the 2002 Ma Murray Award for Best Columnist in BC/Yukon. His novel, Bad Latitudes, is available in bookstores.