Why Exxon Won't Produce More Oil

If you want to understand it, listen in to ExxonMobil's presentation to analysts in New York City in early March. Halfway through the three-hour meeting, Exxon management flashed a chart that showed the company's worldwide oil production staying flat through 2012.

Ponder that for a minute. Exxon is the largest publicly traded company in the energy business. In fact, it's the most profitable company in the history of capitalism, earning a record $40.6 billion last year on sales of $404 billion. Yet even with crude oil prices near all-time highs, Exxon isn't planning on producing any more oil four years from now than it did last year.

What if Steve Jobs said Apple wasn't going to sell any more iPhones than it did in 2007? What if Howard Schultz said latte production at Starbucks would stagnate, at least until the next U.S. president embarked on his or her re-election campaign? Shares of both companies would plummet.

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This kind of crap has been going on for a long time now. Corporate America has been playing this game for years. It's all about the bottom line, with no real concern for the effect it has on the rest of the economy. Big oil did the same thing in the 1970's oil crisis. Everyone cried that they would never let this kind of outrage ever happen again. Then we elected Bush and all his oil cronies to lead our country. Everyone knew who they were voting for the first term, and then they went and did it again. Perhaps, but not likely, we will learn our lesson from all this.

It would be easy to think that this kind of corporate plundering is only happening in the realm of big oil companies, but the fact is this kind of profiteering is happening in other sectors as well. This type of activity is all too apparent in the financial sector as well. Banks, mortgage companies and Wall Street all knew the risks of shady lending practices should have outweighed the lure of huge profits, but when they saw the dollar signs, they ignored the fact that this behavior would decimate our economy and took the easy money. Now they want the government to bail them out. It makes one yearn for the much simpler days of Enron and Worldcom.

It's not easy to not see the writing on the wall here. As the economy tanks, and energy demands decline, soon big oil will be lobbying Congress to give them tax breaks. They'll cry about Opec and countries like Venezuela flooding the market with cheap oil, coupled with the high costs of producing alternative fuels, as the reason for their shrinking bottom line. When in reality, the bottom line was artificialy inflated (by them) in the first place. If this sounds familiar, it's because it is a very similar equation to the one that has led us to the current housing/mortgage crisis.

Why Exxon won't produce more oil - MSN Money