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Not a Bad Time to be Exxon (Not a Good Time to Be Anyone Else)

It won’t come as a surprise to anyone who’s filled the station wagon recently, but ExxonMobil announced today that its 2007 net earnings totaled $40.6 billion — the single largest annual profit, not only in the company’s history, but in the country’s. (That $40.6 billion is not income, mind you, but profits after all expenses and taxes have been paid out.)

In the fourth quarter alone, the company made $11.6 billion — up 14 percent from 2006.

And the figures are no recent trend. U.S. oil company profits, which totaled $33.7 billion in 2002, had jumped to $119.6 billion in 2006.

In the understatement of the year, ExxonMobil Chairman Rex W. Tillerson said the latest figures reflect “strong results in all business segments.” Rex failed to mention that a gallon of gas, which ran $1.46 in 2002, averaged $3.07 this month.

These profits are made possible, of course, with the help of federal subsidies, which total anywhere between $15 billion and $35 billion a year, according to independent estimates. (In 2005, President Bush — himself a former oilman — signed into law an energy bill which, by itself, granted more than $14 billion in tax breaks and incentives to the industry.)

Total subsidies are difficult to pin down because they take so many different forms. For example, Washington props up the industry by issuing tax-free or low interest construction bonds, assuming the legal risk for development projects, or lending money to international institutions like the World Bank, which in turn subsidize international oil production.

Aiming to reverse the trend, House Democrats last year proposed to repeal $14 billion in oil subsidies over 10 years. But the idea didn’t fly with Senate Republicans, who threatened a filibuster, nor with the White House, which threatened a veto. The language was stripped from the energy bill Bush signed in December.

Environmental groups are already pushing Democrats to return to the issue this year. But with thin majorities in both chambers, and Bush still hovering with his veto pen, they have little chance of succeeding.

Meanwhile, we can all sleep well knowing that Rex Tillerson is paying the rent OK — and probably steering Exxon to another record-breaking year.

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