TPT May 2008

From the AmericaS

totaled $3.4 billion in the first two months of this year, down 2.8 per cent from $3.5 billion in the same period of 2007. The bank said that it expects little or no growth in such remittances this year after a 1 per cent rise to a record $23.98 billion in 2007. Remittances from abroad constitute Mexico’s second-largest source of foreign currency inflows, after oil exports. Oil and gas Oil companies are challenged on high profits, low investment in alternative energy “On April Fools’ Day, the biggest joke of all is being played on American families by Big Oil, who are using every trick in the book to keep billions in federal tax subsidies, even as they rake in record profits.” The accuser was Rep Edward Markey, chairman of the House Select Committee on Energy Independence and Global Warming and a longtime critic of the US oil industry. The occasion was a congressional hearing on the topic ‘Drilling for answers: oil company profits, runaway prices, and the pursuit of alternatives.’ Writing in the Houston Chronicle , David Ivanovich of the paper’s Washington Bureau reported that the energy executives invited by the committee tried to defuse some of Mr Markey’s outrage over industry profits – tallied by the Massachusetts Democrat at $123 billion in 2007 – at a time when many Americans are struggling to

find the cash to top up the fuel in their tanks. J Stephen Simon, the senior vice president of Exxon Mobil Corp, and Robert A Malone, president of BP America, cited figures they said suggest the industry’s profits last year were not out of line. Mr Ivanovich wrote, “Oil and gas companies, the executives said, earned an average of 8.3 cents per dollar of sales, compared with 7.8 cents per dollar for [companies in the Dow Jones Industrial Average] – which include Exxon Mobil and Chevron.” ( ‘Profits realistic, oil execs insist,’ 1 April). Mr Simon said that Exxon Mobil’s effective tax rate in 2007 was 44 per cent, compared with 30 per cent on average for 80 US companies surveyed by Tax Notes, a print and online news service covering tax issues. He also asserted that, over the last five years, Exxon Mobil’s US tax bill has exceeded the company’s US earnings by $19 billion. But the ensuing ‘intense exchanges’ observed by Mr Ivanovich had the oil executives on the defensive. Mr Markey quickly bored into Exxon Mobil, asking why a company that earned more than $40 billion in 2007 – the most ever earned by a US company in a single year – has plans to invest only $100 million over 10 years in renewables and alternative energy programmes. Mr Simon replied that officials of his company had examined a range of alternative energy sources and were unsatisfied with their potential: they want instead to focus on leapfrogging current technologies and find a breakthrough for the world’s energy concerns. As for Exxon Mobil, Mr Simon said, “The

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