Record Big Oil profits from record oil prices and taxpayer subsidies — where does all your money go?

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With ExxonMobil’s report of a $11.68 billion haul in the second quarter of 2008, the world’s top five oil companies are now on track for more than $160 billion in profits this year …

I know what you are thinking: Surely, Big Oil will take those staggeringly immense and almost immoral profits from the suspiciously fast rise in oil prices — along with the $33 billion in taxpayer-funded subsidies you’re going to give those politically powerful and remarkably greedy companies over the next five years (see here) — and invest in both new drilling and new energy technology. No it won’t, no it won’t, and stop calling me Shirley.

In fact, the AP reports:

The five biggest international oil companies plowed about 55 percent of the cash they made from their businesses into stock buybacks and dividends last year, up from 30 percent in 2000 and just 1 percent in 1993 …

Hmm, 55 percent of $120 billion is a staggering $66 billion used to pump up their own stock price.

But some critics say Big Oil focuses too much on boosting stock prices, in an industry that sometimes ties executive pay to stock price.

“Some critics”? “Sometimes ties executive pay to stock price”? Don’t forget that the industry always gives mega-stock options to executives.

The percentage they spend to find new deposits of fossil fuels has remained flat for years, in the mid-single digits …

What about R&D?

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This figure was in a recent Financial Times article. Let’s forget Schlumberger, “the world’s largest oil services company” that obviously has a motivation to develop new oil exploration technology. And the semi-public Petrobras, which is “is the world’s leader in development of advanced technology from deep-water and ultra-deep water oil production.”

All those other embarrassingly profitable oil companies, invest 0.4 percent of sales (or less!) on R&D. The implications are painfully obvious:

And in focusing on buybacks and dividends over exploring for new oil, some critics say, oil companies jeopardize its already dwindling share of world supply.

“If you’re not spending your money finding and developing new oil, then there’s no new oil,” said Amy Myers Jaffe, an energy expert at Rice University who’s studied spending patterns of the major oil companies.

Ending the moratorium on coastal drilling isn’t going to reduce your pain at the pump one penny through 2030. That’s pretty obvious since Congress’s 2006 opening of the Gulf of Mexico to drilling, which has more than twice as much oil as the Outer Continental shelf, was followed by a doubling of oil prices in two years. With 2 percent of the world’s oil reserves and 25 percent of consumption, the main effect of more domestic oil drilling is to enrich the oil companies.

But just because drilling is pointless from an economic point of view, doesn’t mean it’s pointless from a political point of view — a subject I will address tomorrow.

This post was created for ClimateProgress.org, a project of the Center for American Progress Action Fund.