The major oil companies are once again being questioned about rising cost of gasoline.
Senior executives of Exxon Mobil Corp., Shell Oil Co., BP America Inc., Chevron Corp. and ConocoPhillips, are scheduled to testify before a congressional committee Tuesday. They will likely find that the lawmakers questions will go straight to the point.
The five companies together earned about $123 billion last year due to the rising oil and gasoline prices.
"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.
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.
Oil Industry: Tax Breaks Needed
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.
Lawmakers have acknowledged there is almost nothing that Congress can do to bring prices down. Industry insiders say the nation may be paying four dollars per gallon for gasoline this summer. They say the price of oil may stabilize around $100-a-barrel.
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 refused to use the oil in the federal Strategic Petroleum Reserve to influence prices.
The American Petroleum Institute, the lobbyist for the large oil companies in Washington, tried to get its message out ahead of the congressional hearing on Monday.
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.
Source: The Associated Press