The current ExxonMobil advertising features the tagline "Taking on the world's toughest energy challenges" as it should since the company is by far the industry leader.
How is ExxonMobil meeting this energy challenge? By pumping more oil.
I expected the ad body copy to speak to ExxonMobil's commitment to fuel innovation and investment in alternative fuels. But no, the ad's headline reads, "as our economy grows, Americans are demanding more gasoline.... and we're producing." This doesn't seem like hard work at all on the part of ExxonMobil.
In fact, I don't think anything is too difficult for ExxonMobil these days. 2006 was a record year in which the company generated $39 billion in net income and $52 billion in operating cash flow. How did ExxonMobil spend this money?
Not on innovation. $25 billion was spent on share repurchases -- making remaining shares more valuable. $8 billion was spent on shareholder dividends. And only $730 million was spent on technology R&D.
So how ExxonMobil is meeting the world's energy challenges is crystal clear. As demand for oil increases and oil reserves decline, ExxonMobil will continue to pump more oil and raise prices at the pump. Profits will be used to buy back shares.
What will happen first-- will we run out of oil or will ExxonMobil go private? Don't expect energy innovation to stand a chance in this race.
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