Exxon Profits - Gas Has Very Little to Do With It

ExxonMobil has just released their latest Quarterly Report, 14.83 Billion in profits, WOW! Mr. Rockefeller would be proud of his company.

At first blush, most assume all this cash was made on the back of the US Driver. As much as the poplulation seems to believe, the truth is quite the opposite. Very little of the profit generated by ExxonMobil is derived from the sale of gasoline to drivers. The segment of Fuels Marketing (Exxon, Mobil, and On the run Stations) generates very little revenue for ExxonMobil in proportion to all their sources of revenue.

Before someone can put the blame on the 'oil' companies, you have to understand what OIL is used for and where are the profits to be made.

Products: Fertilizer, Candles, Detergent, Vitamins. CDs and dvds, Plastic, ink, Film are just some of the examples of regular everyday goods that need oil.

So the next time a person tends to their garden, romances a woman, washes their clothes, tries to live healthy, rents a movie or buys a Cd, has a picnic or buys your child school supplies, make sure you remember you have just contributed to the huge profits of ExxonMobil. As a bonus remember you most likely used your car to go to all these places. So, if everyone in the US stopped driving tomorrow, ExxonMobil would still generate 85-90% of the money they took in this last quarter.

Below is a description of the operations of ExxonMobil:

Upstream
ExxonMobil's asset base is large, geographically diverse, and economically robust across a range of business environments. The company holds exploration and production acreage in 36 countries and production operations in 24 countries around the world. In 2007, seven major upstream projects started production. ExxonMobil sells natural gas in almost all major and developing markets to power companies, industrial users, and distributors. Total 2007 oil and gas production available for sale averaged 4.2 million oil-equivalent barrels per day.

Downstream
ExxonMobil's network of reliable and efficient manufacturing plants, transportation systems, and distribution centers provides clean fuels, lubricants, and other high-value products and feedstocks to customers around the world. ExxonMobil has interests in 38 refineries located in 21 countries and markets its products through more than 32,000 retail service stations. Our products and services are also provided to nearly 1 million customers worldwide through our three business-to-business segments-Industrial and Wholesale, Aviation, and Marine. In 2007, refinery throughput averaged 5.6 million barrels per day, and petroleum product sales were 7.1 million barrels per day. ExxonMobil is the world's No. 1 supplier of lube basestocks and a leader in marketing finished lubricants, asphalt, and specialty products. Worldwide, we market products under the Exxon, Mobil, and Esso brands.

Chemical
ExxonMobil is a leader in the petrochemical industry with interest in 49 wholly owned and joint-venture facilities around the world. We hold strong positions in many of the largest-volume and highest-growth petrochemicals in the global economy. The company is one of the largest producers of olefins, the basic petrochemical building block. We are also one of the largest producers of polyolefins, which include polyethylene, the largest-volume plastic, and polypropylene, one of the fastest-growing polymers. More than 90 percent of chemical capacity is employed in businesses where we rank first or second in worldwide market position.

A quick look at their 2007 (2008 is not yet available) Annual report sheds light on where the money is coming from. ExxonMobil's 'Upsteam'(see above for definition) operations pulls in the most revenue, specifically, operations outside of the US. In other words, ExxonMobil is making their money from the sale of oil, not the sale of gas at the retail level. As the market pushed the price up, so went margins. As world demand ramped up, so did the price of oil.

Those on US soil often forget or are too ignorant to realize ExxonMobil is a global company and the rest of the world is catching up in demand for oil. China and India have growing middle classes equating to the size of the entire US population. Just like the Middleclass in the US, they are buying "stuff", cars and more 'stuff'.

This article was not meant to defend the oil companies, many of their currupt actions have encouraged the dependancy North Americans have on their product. However, in order to attack an enemy or place blame, one must be fully be enlightened.

When it comes down to it, North Americans should demand a quicker conversion to alternative fuels from their governments and industry. Do not be angry with the OIL companies, be angered by the lack of action taken by your government and yourself. Being angry at the ExxonMobil's of the world would be as illogical as a crack addict being mad at their dealer.