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., Shell Oil Co., BP America Inc., Chevron Corp. 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.
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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."
Press; By H. JOSEF HEBERT]
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