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Rutland Herald (Vermont): ExxonMobil recently reported record 2005 profits of more than $36 billion

Rutland Herald (Vermont) staff writer Bruce Edwards: Although awash in record profits, don't look for other major oil companies to follow the lead of CITGO and make discounted home heating oil available to low-income residents in Vermont and other cold-weather states
CITGO last week delivered its first shipment of home heating oil to Vermont at a 40% discount. It's part of an offer CITGO, the Venezuelan-owned oil company, made in November to sell discounted home heating oil to low-income residents in the US.
Shane Sweet of the Vermont Fuel Dealers Association said so far no other oil company has come forward with a similar offer. “If they did that, we would do what we could to make it go off seamlessly,” said Sweet, the association's executive vice president. “I'm not getting out of the bed in the morning to solicit that.”
Sweet said right now he's too busy working out the logistical details of the CITGO deal. Sweet apparently won't have to worry about another oil company following CITGO's example. Instead, ExxonMobil, the nation's largest oil company, said in an email that it supports full funding of the federal Low Income Home Energy Assistance Program.
Citing a American Petroleum Institute letter sent to US senators in November, ExxonMobil noted that higher prices have substantially increased royalties and income taxes paid by oil and natural gas companies to fully fund LIHEAP.
“ExxonMobil incurred in 2004 more than $11 billion in state and federal taxes (income, excise and other). Our 2005 taxes will reflect higher earnings recorded,” Exxon Mobil spokesman David Gardner said in response to a reporter's question.
Gardner also pointed out that the “industry mounted a major effort to return Gulf Coast facilities to full operation following Hurricanes Katrina and Rita. The Congressional Budget Office estimated that the energy industry sustained between $18 and 31 billion in capital losses from the hurricanes. Restoration costs will be absorbed without government assistance.”
ExxonMobil recently reported record 2005 profits of more than $36 billion.
The response from Shell Oil Company was nearly identical. “It is Shell and Motiva's view that public service funding decisions, such as funding and administering the low-income heating oil assistance program (LIHEAP), are a role and responsibility of the government,” Shell spokeswoman Karyn Leonardi-Cattolica said in an e-mail. “We do, however, appreciate the strain that rising energy prices are putting on the family budget. We are working aggressively to do what we do best, which is to increase supply, directing our efforts to find more energy so that Americans can not only affordably heat and cool their homes, but also fuel their vehicles and power their businesses.”
Shell Oil Company is a 50% owner of Motiva Enterprises LLC, along with Saudi Refining Inc. Motiva distributes heating oil in the Northeast. Shell posted a 2005 profit of $23 billion.
Sunoco, which earned $974 million last year, has no plans to follow CITGO's lead either. But Sunoco spokesman Jeff Peters said for the second consecutive year the company has given away $1 million in home heating oil that's distributed through charitable or nonprofit organizations in New York and Pennsylvania, primarily in the Philadelphia area.
Asked whether given the oil companies' record profits that a $1 million donation was sufficient, Peters said, “If you compare it to overall charitable giving, we think it's a significant investment.”
At the current average New England price of $2.43 a gallon, Sunoco's donation would buy 411,522 gallons of home heating oil. By comparison. CITGO will make available to Vermont alone 2.5 million gallons of fuel oil at a 40% discount, saving Vermonters $2.4 million off the current price.
Vermont is one of several states that has taken CITGO and the Venezuelan government up on their offer.
Last week, Venezuelan Ambassador Bernardo Alvarez joined Rep. Bernard Sanders, I-Vt., as the first shipment of discounted oil was delivered to the John Graham Emergency Service Shelter in Vergennes. Under the deal brokered by Sanders, 2.4 million gallons of heating oil will be sold at a 40% discount to LIHEAP recipients, Crisis Fuel Assistance Program, and the WARMTH Program. The remaining 108,000 gallons will be distributed free of charge to homeless shelters throughout Vermont.
Sanders said that other oil companies should follow CITGO's example, especially with the industry reaping record profits. “It is absolutely outrageous for companies like ExxonMobil, which earned a record-breaking $36 billion this past year, to be raking in obscene profits while millions of Americans are struggling to pay skyrocketing fuel prices,” Sanders said in a statement.
“If ExxonMobil can afford to give their CEO $81.7 million in compensation, they should be able to lower gas and home heating oil prices for consumers. They should also be able to establish programs similar to CITGO that would provide significant discounts to lower-income consumers in need.”
The offer by CITGO and Venezuela has been viewed with skepticism by the Bush administration who view the deal as a gimmick to embarrass the administration. Venezuela President Hugo Chavez is a harsh critic of President Bush.
Bruce Edwards
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