Big Oil Called Onto Congress Carpet Today For Answers
WASHINGTON - Big Oil is once again being called on the carpet. Senior executives of the five largest U.S. oil companies were to appear before a congressional committee Tuesday where they were likely to find frustrated lawmakers in no mood for small talk.
“These companies are defending billions of federal subsidies … while reaping over a hundred billion dollars in profits in just the last year alone,” complained Rep. Edward Markey, D-Mass., in previewing the hearing.
The lawmakers were scheduled to hear from top executives of Exxon Mobil Corp. (XOM), Shell Oil Co., BP America Inc., Chevron Corp. (CVX) and ConocoPhillips, which together earned about $123 billion last year because of soaring oil and gasoline prices.
Markey, chairman of the Select Committee on Energy Independence and Global Warming, said he wants to know why, with such profits, the oil industry is steadfastly fighting to keep $18 billion in tax breaks, stretched over 10 years.
The House last year and again on Feb. 27 approved legislation that would have ended the tax breaks for the oil giants, while using the revenue to support wind, solar and other renewable fuels and incentives for energy conservation. The measure has not passed the Senate.
The oil industry has argued on Capitol Hill and at the White House that the tax breaks are needed to assure continued investment in exploration, production and refinery expansions. President Bush has promised to veto any such bill, saying that the oil companies should not be singled out.
The threat of nationwide $4-a-gallon gasoline, perhaps this summer, and $100-a-barrel oil is producing strong political reverberations, even as lawmakers acknowledged there is little that Congress can do to bring prices down.
On Monday, Rep. Neil Abercrombie, D-Hawaii, said that the president should release oil from the government’s emergency reserve to put more supplies on the market, saying, “We are quite clearly in the midst of an energy emergency.” He noted the bankruptcy of Aloha Airlines, blamed in part on high jet-fuel costs.
The White House has repeatedly rejected use of the oil in the federal Strategic Petroleum Reserve to influence prices.
The American Petroleum Institute, which represents the large oil companies in Washington, sought Monday to get its message out ahead of the congressional hearing.
Oil company profits in total dollar amounts are huge because the companies are huge and must be so to go up against giant multinational competitors in a global market, API President Red Cavaney said during a conference call with reporters.
In terms of return on investment, “we make an acceptable return” but one in line with other industries, Cavaney argued.
Congressional hearings and the probing of skeptical, frustrated senators and congressmen are nothing new to executives of the biggest oil companies.
In May 2006, the top executives of the same companies to be represented Tuesday were grilled on their spending and investment priorities in light of soaring oil prices. The cost of a barrel of oil at the time was $75.
Two months earlier, executives of many of the same companies were brought before the Senate Judiciary Committee and questioned about the “merger mania” that some senators argued was behind the high oil prices.
In November 2005, the chief executives of the five largest U.S. oil companies sat shoulder to shoulder at a Senate witness table and sought to justify their profits. At the time, Sen. Pete Domenici, R-N.M., reflected the views of many of his colleagues when he talked of “a growing suspicion that oil companies are taking unfair advantage.”
(AP)
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Why doesn’t the House Select Committee on Energy Independence and Global Warming call itself on the carpet for preventing expanded drilling offshore and in Anwar and elsewhere, no building of refineries or nuclear plants or coal fired plants in the US for 30 years? We are competing with India (whose TaTa Industries recently bought Jaguar Motors from American Ford Motors) and China for oil. We don’t have any supplies of our own, so we pay the world market price. Get it?
April 1st, 2008 at 8:34 amStats: There are only 5 major oil companies operating in the US. They dictate prices down to the local gas station. How is this not a monopoly?
Oh, and lets make sure we don’t drill for oil or build refineries in this country due to Al Gore’s BS claim on global warming.
April 1st, 2008 at 8:42 amim totally for a companys right to make profits. i think the fact that gas is so expensive in this country is our governments fault in not standing up to environmentalists. or in alot of cases its their fault for not standing up to fellow lawmakers who are in the pocket of environmentalists.
we need new refineries, we need to drill in Alaska and to have the ability to put oil platforms offshore in more places. we would be doing fine right now but a new refinery hasnt been built since the 1970s.
but on the other hand i believe that in some cases we are being screwed by the oil industry or possibly gas stations themselves. have you ever noticed how when there is good news it takes a long time to reach the pump? but when there is bad news it takes no time and gas prices rise.
April 1st, 2008 at 9:00 amTotally absurd. Big oil dictates nothing. The price of oil is determined by the World Market not by oil companies. Maybe Congress or the fed should be called on the carpet for all the taxes that they levy on a gal of gas….in some states those taxes are as much as .60 cents a gallon.
Or maybe the Fed could explain why it is that big oil has to make 53 blends of fuel..each costing more to produce…instead of one…not to mention the strain some blends place on the refineries to produce (added maintenance costs and more breakdowns)?
And why is it we can’t drill in our own country for more oil. Like ANWAR? Huh. Is all this talk about going green some sort of scam? Of course it is.
And why does the fed insist on Ethanol, since it takes more oil to produce a gallon of Ethanol, than a gallon of oil. What Federal dipshit came up with that plan? Why not use cane sugar instead of corn? Since cane sugar is less expensive to produce fuel from than corn?
Where are our new refineries? Congress hasn’t allowed a new one to be built in 30 years?
So is all of this talk about weaning ourselves off of ME oil just a shuck-and-jive campaign? Oh hell yes.
And what about nuclear power. Can’t build anymore of those. Funny thing they don’t use oil!!!
If Congress had a fucking brain they’d be dangerous. If the dickheads want to bitch about oil prices, then go tell it to OPEC and the rest of the ME taliban. Or better still, why is it every time an oil producing country has internal conflicts, such as Venusuela, or Nigeria, the oil market prices go up?
So how about dragging in the Saudis, Kuwatis, Quartis, Venezuelans, Mexico and the rest of the oil producing nations and asking them the same fucking questions…dumb asses.
April 1st, 2008 at 9:20 amI am sick of these politicians pontificating and calling US businesses “on the carpet” when they are not following the Marxist business management principles that the libtards think should control the free world.
Has anyone ever checked out how much state and federal governments TAX each gallon of gas??
The taxes levied probably far outweigh the profits that the oil companies make - so who are the real greedy bastards?? 
And, where do all these tax dollars go? Why doesn’t the government underwrite all of these pathetic environmentalist “alternatives” to “fossil” fuels, instead of forcing legitimate businesses to invest in this nonsense?
Fact is, most of these “alternatives” will not survive in the free market, and have to be forced down the throat of business by government legislation just to keep the environmentalists happy.
Al Gore and his tree-hugging, birkenstock wearing nut jobs want to enslave us in a similar manner to the terrorists - take away our freedom to make our own choices and carry on commerce unhindered - as well as sign us up to their new “religion” of earth worship and protection.
Go find your own planet, Al
April 1st, 2008 at 9:22 amTrue, we have not built any ‘new’ refineries, but there is a loophole for ‘expansions’. I know, I’m working on an expansion project that is going to provide 325,000 barrels a day.
The Indians are doing what it takes to develop their oil industry as a matter of national pride and importance whereas our politicians are merely looking out for themselves in every conceivable way.
I don’t know how much the oil companies control prices when there are commodity brokers that are setting prices on the international market. Everyone is paying more, not just us.
April 1st, 2008 at 9:22 amRidiculous. Current price fluctuations have more to do with the declining value of the dollar than anything. With American demand flat-lining and supply inventories clearly able to keep up (I don’t see any lines waiting for fuel), a lot of recent day to day fluctuations have to deal with the value of the dollar. I have a feeling that if all other things being equal, that if we used the power of 2003 dollars to buy oil in today’s market, it would be back around 60 bucks a barrel.
April 1st, 2008 at 9:30 amIf we want cheaper fuel then here are some suggestions:
1. Extract oil from coal. We have 1/3 of the world’s coal on our land. Why not extract oil from it to replcace disel oil imports?
2. Extract energy from abandoned trash dumps which produce as a by-product of rotting and deterioring garbage….natural gas…
3. Extract energy from old tires. You can drive a turbine with the heat energy produced by such burning.
4. More nuclear power. We have the safest nuclear technology on the planet. The reason why Three Mile Island didn’t become a Chernobl is because of those saftey factors.
BTW, nuclear power is the greenest burning fuel on the planet.
Changing light bulbs to some other kind of bulb is no long-term fix for energy conservation. It’s just more green party bullshit. The long-term goal should be to get completely off of ME oil, which is what Jimmah Kohtair talked about 30 years ago…and we’ve done zip to do that.
5. Make one blend of oil for every city. You put a starin on refineries with some of these blends. It costs more money, more downtime for maintenance and causes more fires, because of the extreme heating required to produce some blends of oil.
6. Solar, wind and water power are also viable alternatives. Hey and while we’re at it, why not ask Nasti Peloski and Fast Teddy Kennedy why it is that they continue to block the building of wind power utilities on Martha’s Vinyard and SF Bay? Hmmmm?????? Fucking hypocrates.
April 1st, 2008 at 10:51 amRemember “Atlas Shrugged” when Government became too much burden the producers just quit and disappeared. Wyatt set his oil fields afire before he walked away.
Who’s to keep a producer working when he’s made his pile and want’s to stop?
April 1st, 2008 at 11:13 amHigh gas and oil prices are the result of Democratic Party policy and the fact World consumption is about 5 million barrels a day more than what is produced. We are at the mercy of Opec and Chavez.
April 1st, 2008 at 11:20 amAnother point Congress misses. How much of US pension money is tied up in oil shares? Mutual funds? When Congress fucks the oil companies, Congress ends up fucking American investors, IRA’s and other pensioners instead.
Stupid fucks.
April 1st, 2008 at 12:18 pm