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Exxon-Mobil May Be Going Down the Tubes

2016-10-27

A new Huffington Post article explains that Exxon-Mobil is saddled with excessive debt because of mistakes they have made over the last few years, especially when the price of oil was over $100 a barrel.  The huge oil company made erroneous bets on trying to tap extremely expensive oil in the Arctic, deep under the Gulf of Mexico, and in the tar sands of Canada– attempts which, even when successful, only made available oil which costs more than it is worth to pump.  Now that oil is less than $50 a barrel and likely to remain so for some years, the company is wallowing in red ink.  Recently, they lost their top credit rating at Standard and Poor’s, yet they increased their dividend by 2 cents the next day.

The article goes on to detail Exxon-Mobil’s legal fights, including investigations by some state attorneys general into the charge that the company tried to cover up its knowledge of fossil fuel’s role in exacerbating climate change.  The company has also failed to invest in alternative energy sources and its CEO has mocked the green energy field.

In sum, Exxon-Mobil is in trouble.  In fact, they may be headed the same way as the coal industry, which rates a mention in the article for the bankruptcies of four major coal companies on the heels of China’s 3.7% drop in coal use last year.  It couldn’t happen to a nicer guy.

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