Wake up and smell the oil

In a classic pass-the-buck routine, Exxon Mobile chief executive Rex Tillerson, speaking to Congressional leaders in Washington, shifted blame back to the consumer, urging us all to reduce our demand for oil. Exxon Mobile, whose profits in 2005 landed it in the #1 position - biggest annual profit for a U.S. company ever (that's profit - money to buy cars, boats, planes and other oil-consuming recreational devices - not revenue), asking us not to buy their product?

Sound familiar?

"To reduce the health effects of smoking, the best thing to do is to quit." You guessed it, Phillip Morris, the original poster child for abstinence. The company that invented the put-us-out-of-business-we-are-bad-for-you-anyway routine. And their profits have soared ever since.

On their web site, PhillipMorrisUSA, whose ironic anti-smoking message was mandated in the 2005 settlement of United States of America v. Philip Morris USA Inc., et al., Phillip Morris says with disingenuous concern, "Philip Morris USA agrees with the overwhelming medical and scientific consensus that cigarette smoking causes lung cancer, heart disease, emphysema and other serious diseases in smokers." Yes, we know it will kill you, but we will sell it to you anyway, and feel bad about it.

Like Exxon, Phillip Morris and their parent company the Altria Group, are doing quite well from people not actually quitting. Net revenue continues to increase. Altria posted $25 billion in revenue for the forth quarter of 2005.

Exxon and Phillip Morris both know, you can do well by doing bad.

But we Americans don't really want to change our bad habits. We just want the corporations that supply us to change their marketing so we can feel good about our bad choices. Case in point, the lovable Kermit the frog, a symbol of childhood idealism and innocence, is now the spokesfrog for a Ford hybrid SUV that does a mere 30 MPG and still eats fossil fuel like a python on a pickerel frog. A very small leap for mankind indeed. Perhaps Kermie didn't read the Washington Post article about the massive dieoff of the amphibian species due to global warming before he signed his contract.



Trying to paint a rosier landscape, Rex Tillerson explained to Congress that Exxon Mobile is investing $20 billion over the next five years to develop new sources of energy. For a company with revenues of $328 billion in 2005, that is a pitifully small effort. Extrapolated over five years, it comes to $1.64 trillion dollars of revenue of which they plan to invest a mere $20 billion, or 1.2% of all revenue not adjusted for future earnings, in renewable energy. I guess they are too busy counting their profits to read their own guidelines which say; "Above all other objectives, we are dedicated to running safe and environmentally responsible operations."

Of course, Exxon Mobile's meager tip-of-the-hat towards environmental responsibility comes as no surprise. Corporate America has a role model to follow, our Decider-in-chief, who, demonstrating fearless leadership and future thinking, decided the Kyoto Protocol to reduce greenhouse gases was not worth signing.

Rex went on to talk about the pressing need to develop supply from around the world; what I like to call Failed State Supply Side Exploration.

This week three of the top seven countries that supply oil to the US landed on Foreign Policy's failed state index, including Nigeria (#4 in US oil imports, #22 failed state) and Iraq (#7 in US oil imports and #4 on the failed state list - yes there are three other countries worse off than Iraq). There are dozens of failed states we have yet to explore and exploit such as Sudan, Somali, the Ivory Coast.

Contradicting his earlier blame-the-consumer approach, which he probably figured wouldn't play too well back at Congressional home base, Rex continued, "you know, all of that [investment in oil exploration] is directed at trying to address the tightness in the supply situation."

Hang on a minute, Rex, I thought this was all about the demand side, about consumers quitting, about reducing our dependency on oil.

"There's not anything that can be done that is going to change this situation overnight," Rex reassured Congress, offering no real answers at all. High gas prices, high profits. Apparantly what goes up stays up.

He ended it all with a classic oil industry meaculpa, "it's all about supply and demand fundamentals."

Supply and demand fundamentals, better known as the old consumer-supplier blame game. And I thought it was all about profits.

Run Kermie, run.