Exxon Mobil fires back (politely)
EXXONMOBIL MEDIA RESPONSE STATEMENT
VICE PRESIDENT GORE'S ENERGY INDUSTRY COMMENTS
The use of the terms "gougers" and "profiteers" are not only totally
untrue-and numerous U.S. government investigations have exonerated the
industry of such charges -- the terms are misleading in that they obscure
the real issue facing the American public, which is the need for a coherent,
economically and environmentally-sound energy policy.
Concerning home heating oil supplies, ExxonMobil has increased production
and is already manufacturing 10 to 15 percent more than a year ago. We have
also taken steps to improve our ability to move heating oil from our Gulf
Coast refineries to the Northeast. We fully expect to meet all our
contractual demands this winter.
It must be kept in mind that the energy business is highly competitive and
consumers are best served by the forces of a free marketplace and not
government intervention. For example, the current patchwork quilt of
gasoline regulations has put a great strain on gasoline supply and prices
in the U.S. that lead, in part, to the surge of prices in the Midwest
earlier this summer. A comprehensive energy program that encourages
market-based solutions to supplies of clean-burning gasolines could have
prevented that situation.
National Energy Policy
Energy is strategically important to the U.S. and its continued economic
growth. ExxonMobil believes our nation's leaders should work with industry
to develop a united, cohesive energy policy. Contrary to accusations that
the industry is at odds with the American people, just the opposite is
true. We have worked for decades to ensure energy supplies are sufficient
to support economic growth that improves people's quality of life. We have
encouraged responsible use of energy in order to fulfill society's
expectations for energy security, environmental performance and energy
efficiency; and we have supported basic and applied scientific research in
all of these areas.
In all energy sectors, the market must be allowed to work. Past government
intervention to artificially manipulate the oil and gas markets have led to
distortions, exacerbated shortages and actually driven up prices. A myriad
of environmental regulations and permitting issues in the U.S. have
prevented any significant additional expansion of U.S. refineries, which
today are operating with nearly no spare capacity to meet the country's
growing energy needs. ExxonMobil supports a strong commitment to
environmentally sound operations, but the regulations should be guided by a
science-based, cost-benefit approach. Government policies, laws and
regulations affect all aspects of energy -- development, supply, price,
use, and international politics. There are no simple, quick solutions.
This is a serious matter that all parties must address, taking into
consideration domestic and international concerns.
Some Key Facts About Energy Prices
Since the end of World War I, inflation-adjusted gasoline prices have
steadily declined, interrupted only by a few peaks and valleys. Through the
end of World War II, when average real incomes for Americans were much
lower than they are today, gasoline prices varied between $2.00 and $2.50
per gallon ($1999). The price then dropped steadily to about $1.50 per
gallon before the oil shocks of the 1970s and early 1980s drove prices
temporarily higher, peaking at over $2.50 in 1981. The lowest gas prices of
the period occurred in 1998, when low crude prices drove gasoline near, and
in some parts of the U.S. below, $1.00 per gallon. Prices have moved up
sharply in 2000, but from a very low level and continue to be below
historical levels.
The declining price of gasoline has contributed to the growth of our
standard of living over the years. In 1966, the average American family
spent each year a total of about $35,000 (in $1999), of which about three
percent went for gasoline. Today, the average American family spends over
$60,000 each year, with only two percent on gasoline. Over the same period,
the vehicle fleet (cars, vans, light trucks and SUVs) increased from 91
million to over 200 million, and the average number of miles driven
annually per vehicle rose from 9,500 in 1966 to almost 12,000 today. With
vehicle efficiency improving from about 13.5 miles per gallon in 1966 to
nearly 20 mpg today, the average cost of driving one mile has fallen from
over 12 cents in 1966 to about six cents in 1999. Recent gasoline price
increases have brought that cost back to only about seven cents per mile.
ExxonMobil makes about a nickel for every gallon of gasoline it sells;
Federal and State Governments take in an average of 40 cents in taxes for
every gallon sold.
For additional information about energy prices, supply, and the need for a
comprehensive U.S. energy policy, reporters, consumers, and politicians are
urged to log on to ExxonMobil's web site at www.exxonmobil.com and click on
the Oil and Gasoline Economics section.
exxonmobil.com
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