High Oil Prices Good for Exxon Mobil and Environment?

Peak oil may or may not be a reality, but a lack of new supply to meet growing world demand isn't hurting oil companies bottom lines. The world's largest--Exxon Mobil--beats its own record for profits set in 2005 by $1.1 billion. For 2007, Exxon Mobil raked in $40.6 billion in profits overall thanks to oil prices around $90 a barrel.

Exxon Mobil only produces 3 percent of the world's oil--a percentage that dropped last year due to the Venezuelan government's nationalization of the company's assets there--but much higher prices buoyed the company's profits to nearly $21 for every barrel of oil it produces.

Other oil companies are sharing in the wealth; Chevron, the nation's second largest oil company, also saw its profits rise from $3.8 billion to $4.9 billion. Overall, oil companies have seen profits triple since 2002. And there is no end in sight, the Organization of the Petroleum Exporting Countries announced no plans to increase production anytime soon at its meeting yesterday.

But high oil prices may only hasten the day when alternatives, such as electric cars or biofuels, supplant the fossil fuel. In the meantime, expect to pay at the pump.

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