NCPA - National Center for Policy Analysis


March 8, 2007

It made big headlines when ExxonMobil announced a record $40 billion in earnings. Now the real news: Those profits will provide Americans with an extra million barrels a day in much-needed oil, says Investor's Business Daily (IBD).

Yet there are many, like House Speaker Nancy Pelosi, who want to tax big oil to turn plant stems and crop residue into gas substitutes. Meanwhile, Chevron, Exxon and others are using their profits to provide Americans with the fuel they can use now:

  • Mexico's government-owned oil company Pemex, for instance, this week announced evidence of what could amount to nearly 30 billion barrels of crude oil in the deep-water Gulf of Mexico.
  • The New York Times reported that high-pressure steam technology is resurrecting "dry" oil wells, debunking the doom-and-gloom "peak oil" theories.
  • Output at Chevron's Kern River oil field in California, for example, rose from 10,000 barrels a day in the 1960s to 85,000 today,
  • Chevron's Duri facility in Indonesia rocketed from 65,000 a day in the 1980s to 200,000 today.
  • In total, Daniel Yergin Cambridge Energy Research Associates head, estimates the worlds' total recoverable oil is 4.8 trillion barrels.

New technology -- courtesy of those obscene big oil profits -- is proving that the world's fossil fuel is long from running out, says IBD.  Profits drive discovery and productivity in every industry, but particularly in the capital-intensive energy sector.  Technology is now making it possible to recover far more of an oil field's resources. And they weren't developed by federal bureaucrats doing Congress' bidding; they were made by companies earning profits by serving customers.

Source: Editorial, "Yes, Profits Matter," Investor's Business Daily, March 8, 2007.


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