Chevron defends big first-quarter profits

April 29, 2011 6:58:41 PM PDT
Profits for major oil companies totaled $34 billion in the first quarter of this year, just as pump prices head toward record levels. San Ramon-based Chevron announced its earnings Friday and quickly defended them.

Since the first of this year, gas prices in California have shot up 88 cents, or 38 percent. At the same time, oil company profits have soared as much or more.

"The profit doesn't bug me, the price bugs me," says consumer Chris McCartney, who has never paid so much for a tank of gas before. His expensive $84.77 visit to the Chevron station coincided with company announcing a huge jump in profits for the first quarter of this year.

"We are earning money by finding and developing energy like oil and natural gas," says Chevron spokesman Sean Comey.

Chevron's 36 percent jump in first-quarter profits is dwarfed by those of several other companies; Conoco's rose 44 percent, Shell's rose 60 percent and Exxon's rose 69 percent.

Chevron is running an ad to ease consumer concerns about their high profits, but not everyone is buying the message.

"We understand and appreciate the impact that high fuel prices have on consumers, particularly people who are struggling in an economy that's still trying to recover," says Comey. "But the most important way to address those high energy prices are with increased efficiency and more supply."

"I think people have every reason to be suspicious or even outraged about an industry that's raking in $6.2 billion for one company in a quarter, or Shell, $9 billion in their first quarter, and at the same time feels entitled to take another $4 billion off taxpayers," says Joe Ridout of Consumer Action.

President Barack Obama is calling for an end to $4 billion in tax subsidies for big oil companies.

Chevron's San Ramon headquarters is located in Democratic Congressman Jerry McNerney's district. McNerney told ABC7, "It's not acceptable that big oil and gas companies are taking in sky-high profits when middle class families can barely afford to fill up their car. Clearly, it is time to end subsidies for big oil and gas companies."

The oil companies say their ability to deduct costs and the tax breaks are no different from any other industry.

In the meantime, Attorney General Eric Holder will convene the first meeting of a new group called the "Oil and Gas Price Fraud Working Group" in Washington, D.C. on Monday.


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