Oil profits fuel consumer outrage

Anne Thompson Chief environmental correspondent • Profile

NEW YORK - In a summer marked by hurricanes and $3 gasoline, the oil companies struck gold.

Friday, Chevron joined the eye-popping profits parade. The nation's No. 2 oil company reported earnings of $3.6 billion. The totals only get bigger: Conoco Phillips made $3.8 billion, BP made $6.5 billion, Royal Dutch Shell made $9 billion and Exxon Mobil raked in a whopping $9.9 billion in just three months.

“Exxon made more than any other company, as a matter of fact,” says Howard Silverblatt, a market equity analyst with Standard & Poor's. “Their profits by themselves were more than 492 companies made for the entire year within the S&P 500.”

The profits are fueling outrage from Burbank...

“I just think it's ridiculous,” says one driver. “It costs me anywhere from $65-75 to fill up the vehicle.”

To Chicago...

“It's sad that they're profiting off hurricanes and disasters and things like that,” says another.

The frustration is so great that even top Republicans like Senate Majority Leader Bill Frist, R-Tenn., are demanding answers from Big Oil.

“We need to make sure that there's no abuse in the current system,” he said. “We need to make sure there's full transparency, and if there's any price gouging, we need to cut it out.”

These companies produce oil and refine gasoline — and sell both. They say they made so much money because an increasing demand for oil worldwide sent the price near $70 a barrel and a shortage of gasoline when the hurricanes damaged refineries.

“Our earnings are a function of how well we manage our business,” says the American Petroleum Institute's chief economist, John Felmy. “We're also producing record amounts of product, we're selling record amounts and we cut our cost dramatically. So that really affects the bottom line as much as anything else.”

Senate Democrats want a temporary windfall profits tax, and some consumer groups say the profits should go to build new refineries. But most drivers just want the prices to come down, so they don't have to shell out wads of money to feed the profits that have America fuming.

“I feel cheated,” says one man. “We're all getting cheated.”

MORE FROM NIGHTLY NEWS

Nightly News Section Front

Dow drops another 684 points; some call it 'slow crash'   World finance ministers to convene in Washington   Obama throws hardball as McCain runs behind   Banking boomtown loses one of its biggest players   McCain keeps squeaky clean earmark record   Safe haven law has unintended consequences   Chicago sheriff takes a stand against foreclosures Nightly News Section Front   Add Nightly News headlines to your news reader: