For a better understanding of oil and natural gas industry earnings, take a look at a pair of blog posts by ExxonMobil’s Ken Cohen (here and here), effectively countering criticisms of  the company’s earnings by those who also call for new energy taxes.

Earnings:

• 2011 global earnings: $41 billion.
• 2011 global revenues: $486.4 billion – from which costs (about $413.1 billion) and global income taxes (about $31 billion) are subtracted, leaving about $41 billion.

Perspective: Though ExxonMobil’s earnings are large, it earned only about 8.5 cents for every dollar of global revenue, which is less than half the earnings per dollar of sales for companies selling smart phones, computers, beverages and other commodities.

Taxes:

• 2011 U.S. tax expenses: $12.3 billion

Perspec... more »

Will Americans vote energy in 2012? We think they should, and API President and CEO Jack Gerard made a compelling argument for it yesterday at the second State of American Energy event in Washington, D.C.

Gerard’s speech was both an appeal and a signal. The appeal: America’s oil and natural gas industry believes there’s never been a better time for a fact-based debate on energy that focuses on ways to help make this country more energy self-reliant and more secure. The signal: API’s new Vote 4 Energy campaign is under way, designed to persuade American voters to be energy-issue voters in this election year.

If you missed it you can see Gerard’s speech and subsequent Q&A here. Key takeaway points:

• The United States has vast energy resources, onshore and offshore, that are among t... more »

Fuel Fix's William O'Keefe has an interesting take on oil and natural gas company earnings that have come out this week - and have been targeted by proponents of higher taxes on energy producers. O'Keefe writes:

"In the midst of several major oil companies reporting their third-quarter earnings, the Democratic Senatorial Campaign Committee is leveraging those figures to launch attacks on its opponents. The strategy behind the assault entails pointing to positive corporate earnings to justify selectively levying putative tax hikes on the oil and gas industry. However, attempts to position energy producers as outliers based on their profits fail to hold up to scrutiny.

"Misplaced scrutiny? (Reflexively, my eyebrow rises.) Tell me more:

"The oil and natural gas industry has a narrow p... more »

When America's oil and natural gas companies report quarterly earnings, as a number are doing this week, lots of folks wonder: Who's benefiting?

In large part, we are - millions of Americans who in one form or another own stock in oil and natural gas companies.

Updating its 2007 study on oil and natural gas company ownership, the Sonecon consulting firm found that nearly 50 percent of all corporate shares are held by public and private pension and retirement funds, including 401(k)s, and IRAs. Individual investors own 20 percent, while financial institutions and asset management companies own 27 percent. That's 97 percent. Less than 3 percent is owned by corporate officers and board members.

In a conference call with reporters Kyle Isakower, API's vice president of regulatory and economic... more »

Today I had the below letter responding to this article in the The Santa Fe New Mexican:

Readers should know to be leery of any group that uses "For Common Sense" as part of its name, and they should understand that more often than not it possesses very little of it.

A case in point is the group Taxpayers for Common Sense and its absurd assertion that governments subsidize the oil and natural-gas industry. The truth is that this industry contributes some $86 million a day to the federal government in royalty payments, rents and bonuses. Tax provisions available to this industry are legitimate deductions for business costs, to which other businesses are entitled. And oil and natural-gas companies pay effective income tax rates that are, on average, considerably higher (41 percent) than thos... more »