Chevron is Losing Money!?!?!?!

Chevron has been running a series of adds lately on the Sunday morning news and business shows in a transparent (at least to me) attempt to bolster their public image. One such add starts with an ostensibly (I would suggest obviously) blue collar guy saying “The oil companies make huge profits. Where does it go?” Then a pretty young lady comes on and says “Every penny and more went into bringing energy to the world.” (These are exact quotes. I played it more than a couple of times to make sure.) Sounds great – Chevron invests LOTS of money to bring energy to the world. But it isn’t exactly true. The guy is asking about “profits.” The girl says “every penny and more” goes into energy production. Really? Every penny of profit “and more” goes into energy production? That would mean that Chevron actually operates at a loss and does not make any profit. But that is not the case. Chevron and the other big four US oil companies are currently making HUGE profits. In part due to the artificially high cost of oil (due to speculation) and in part due to generous tax incentives provided to the oil industry. (Tax breaks that Congress voted to preserve even in these times of financial austerity.) And Chevron is paying dividends to shareholders – money they would not have if they were spending “every penny and more” to produce energy.

Like I said, sounds good – but does Chevron really think all of us are stupid enough to beleive it?

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by Michael Baumer