Big Oil hit pay dirt with the energy legislation passed last week. Companies like ExxonMobil can now collect a bevy of new tax breaks, subsidies, and other incentives despite rising oil and gasoline prices and record profits. This bill allows Big Oil to plunder the federal Treasury and stomp on states’ rights.

Between April and June 2005, BP recorded profits of $5 billion; ConocoPhillips earned $3.1 billion in profits for the same time period. U.S. oil and gas producer Kerr-McGee Corp. reported that its second-quarter earnings more than tripled from a year ago. ExxonMobil’s second quarter profits of almost $8 billion shattered records, giving the company more than $15 billion in profits in the first half of 2005 alone. This is on top of the company’s record $24 billion in profits in 2004.

Does this sound like an industry that needs government subsidies? The energy bill that passed the House on July 28, 2005 and the Senate on July 29, 2005 includes at least $4 billion in subsidies and tax breaks for the oil industry. At the same time, this new energy law allows Big Oil to plunder the federal treasury by paying even less in taxes and royalties for publicly-owned resources. The final energy policy also weakens environmental protections while doing nothing to reduce America’s dependence on oil or relieve consumers at the pump. Finally, the bill allows ExxonMobil and other oil companies to trample on states’ rights when it comes to siting dangerous Liquefied Natural Gas (LNG) facilities and pipelines.

The new energy law preempts state authority in the siting and construction of liquefied natural gas (LNG) facilities, which pose legitimate safety concerns best addressed by states and local communities. Energy companies have proposed several new LNG terminals across the country. State governments have a huge stake in decisions to site new LNG terminals on- or off-shore. LNG terminals located near highly populated areas pose legitimate safety concerns. In a 2004 report, Sandia National Laboratories examined several possible worst-case scenarios for an attack on an LNG terminal. The study concluded that a terrorist attack on an LNG tanker could create a hole between 16 and 39 feet in diameter. If a spill from a 16-foot hole were ignited, it would create a thermal blast that would set buildings on fire and melt steel up to one-quarter mile away. People would suffer second-degree burns more than three-quarters of a mile away.

The law also weakens states’ rights under the Clean Water Act and the Clean Air Act in the permitting of LNG facilities and natural gas pipelines. ExxonMobil and Qatar Petroleum have plans to deliver 15.6 million tons a year of LNG from Qatar to the U.S. ExxonMobil is working to build onshore LNG receiving terminals near Corpus Christi and Port Arthur, Texas and potentially more. The new energy law will make it easier for ExxonMobil to win approval for these and future LNG facilities even if the states or local communities object.

Even though ExxonMobil stands to benefit a great deal from this energy law, the company has the power to direct the oil industry and American decision-makers toward a new energy future. As the largest independent energy company in the world, ExxonMobil’s decisions can affect the rest of the industry over the long term. With daily production of more than four million barrels of oil and gas, ExxonMobil pumps more crude oil than Kuwait. In the words of Art Smith, who heads up John S. Herold Inc., an independent energy-consulting firm, “Exxon sets the standard” for the oil industry.

A dozen environmental and public interest organizations have launched the “Exxpose Exxon” campaign, calling on ExxonMobil to use its leadership position to craft a new energy strategy that goes beyond drilling to the last drop at any cost.

For more information on the Exxpose Exxon Campaign go to: www.ExxposeExxon.com

Click here to read Big Money to Big Oil: How ExxonMobil and the Oil Industry Benefit from the 2005 Energy Bill.