Standing up for Big Oil

Bill Steigerwald
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Posted: Jun 01, 2007 12:00 AM

Fellow gas-guzzlers, rejoice.

ExxonMobil -- the world's best-run, most underappreciated and most foolishly hated energy company -- did exactly the right thing last week at its annual shareholders meeting in Dallas.

When climate cranks came to whine about ExxonMobil’s alleged corporate irresponsibility and try to get the company to accept the Gospel of Global Climate Change according to Al Gore, the oil behemoth's bosses told them to go fly a kite in a wind farm.

The hero was CEO Rex W. Tillerson, a business exec with old-fashioned testosterone who deserves every dime of the $8.4 million pay package he took home in 2006. He stood up to dissident shareholders (climate cranks) who wanted his company to invest more heavily in alternative energy and to stop giving money to think tanks that question the shaky scientific and political tenets of catastrophic global warming.

ExxonMobil, Tillerson reminded everyone, was in the business of finding, drilling, refining and selling oil and natural gas -- not in the business of risking money to save the planet from bogeymen. Anyway, he said wisely, what's wrong with a little debate on climate change?

So say "Hallelujah!," lovers of Big Oil. For another year, at least, ExxonMobil will remain Great Satan Oil Co. -- a mischaracterization that environmentalists and their equally irrational co-religionists in the media have worked overtime to promote.

The company has flaws, not the least of which is its annual acceptance of a couple billion in unnecessary government subsidies. But any schoolboy can see it is an amazingly efficient, productive business in a highly competitive and technologically trying industry.

Despite booming demand and ever-elusive oil supplies, ExxonMobil (and its smaller Big Oil siblings) keeps us supplied with the energy our advanced economies and lofty standards of living are built on -- and which our children and the Third World will need for decades.

But the prowess of ExxonMobil, which employs 82,000 worldwide, benefits not just consumers. More than 2 million individuals own at least one share of its stock, which has climbed from $56 to $84 since last June.

About 52 percent of the company’s 5.6 billion shares are held by 1,528 mutual fund companies and institutions like CalPERS, the California Public Employees Retirement System, which owns 30 million shares of ExxonMobil for its 1.43 million active and retired members.

The value of CalPERS’ stock has climbed about $900 million in the last year to $2.4 billion. Yet its idiotic officials still went to Dallas last week to complain about ExxonMobil’s failure “to address the business risks from climate change.”

Everyone over age 3 has heard that ExxonMobil made world-record net profits last year of $39.5 billion. That’s incredible -- and red meat to U.S. senators and socialists of other stripes. But on gross revenues of $377 billion, it was a modest return: 10.5 percent.

For the perspective that too few mainstream media stories provided: The average S&P 500 company netted 13.4 percent of revenues last year; PNC Financial Services netted 32 percent. Meanwhile, ExxonMobil invests $20 billion a year in capital spending for things like deep-sea oil platforms.

ExxonMobil won’t change much. My hero Tillerson will see to that. And no matter how hard climate cranks cry, that’s good news for those who live in the real world.