Exxon's investment for those
activities will total about $18 billion this year,
roughly what was planned and similar to what Exxon has
invested in exploration and refining in past years,
Gardner says.
"We do that in good times and
bad," he says. "The returns this year might look very
large, but there were years when they weren't so large.
In years when we had $10 (per barrel) oil, we were
investing $15 billion in our business. This year, we'll
invest $18 billion." Oil is about $61 a barrel.
Illustrating the feast-or-famine
cycle in the oil industry, ExxonMobil earned $7.9
billion for all of 1999.
Data from the U.S. Energy
Information Administration show that the 20 big energy
companies it tracks, together, earned $1.6 billion in
the fourth quarter of 2001, and together earned less
than $10 billion in several other quarters in 2001 and
2002.
Exxon notes it boosted the energy
efficiency of its own refineries and chemical plants
more than 3% last year vs. 2003, and is investing $100
million over 10 years in a Stanford University project
to find energy sources not yet being considered.
Nevertheless, Exxon's huge
profits and its reluctance to use them for alternative
energy development are unlikely to win much applause
from motorists weary of $3 gas, suspicious that the
current decline in prices will be short-lived, and
hoping either for plenty of gas on the market or for a
cheaper alternative.
The Sierra Club, an environmental
group often critical of the auto and energy industries,
said Thursday: "Americans want clean sources of energy
that protect public health, reduce pollution, curb
global warming, and save consumers money. Instead,
ExxonMobil has worked to make America more dependent on
oil."
"We can debate what percentage of
the profits should be plowed back into the company and
what percentage belongs to the shareholders. Not being a
shareholder, I'd prefer to see them err in the direction
of spending a larger portion on refineries and new (oil
and gas) fields and infrastructure," says Peter Beutel,
author of Surviving Energy Prices and head of
energy consultant Cameron Hanover.
Chevron, which is to report
earnings today, plans to boost capital spending and
exploration investment 20% this year, to $10 billion.
Spokesman Donald Campbell says that amount has risen
most years, but not by 20%.
He also notes that Chevron has
spent $1 billion since 2000 developing alternative
energy, renewable energy and methods of using energy
more efficiently. Among those projects is a partnership
with automaker Hyundai on a hydrogen-refueling station
in Chino, Calif., for the handful of non-polluting
fuel-cell vehicles being tested in the USA.
Investments by oil companies in
alternative and renewable fuel development are common,
which makes Exxon's stance stand out.
For instance Shell, which
reported third-quarter earnings of $9.03 billion, up 68%
from a year earlier, has a unit dedicated to solar and
wind energy. It's called Shell Renewables, and the
energy company considers it one of its five core
business operations.
Shell also has a global hydrogen
unit. Among other projects, it operates a
hydrogen-refueling station for fuel-cell cars in
suburban Washington, D.C.
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