This week ExxonMobil again announced strong earnings, with record quarterly profits of over $10 billion, or 36 percent higher than this quarter last year. But at a time when easy-to-reach oil is running out, and new techniques are needed to find more oil, make the best use of existing oil fields, and produce oil from nontraditional sources such as oil sands, the company continues to spend only a tiny fraction of its profits on research and development.
Figures for research and development were not available in the quarterly report, but in its annual statement earlier this year, the company revealed that it spent $712 million dollars on R&D last year. While that’s a lot of money, it’s only about 0.2 percent of last year’s astonishing revenues of $359 billion.
“If you look at the percentages of dollars that go into R&D in the oil industry compared to other industries, it’s minuscule,” says Dan Burns, research scientist at MIT’s earth resources laboratory, who says drug companies might spend about 15 percent of their revenues on R&D. Pfizer, for example, spent $7.4 billion in R&D last year. That’s 14.5 percent of its $51 billion in revenues. And it’s 10 times what ExxonMobil spends, even though the oil giant brings in far more money. –By Kevin Bullis