Congress Hits Big Oil On Renewable Energy

Top Executives Grilled On Steep Gas Prices Vs. Big Profits, Efforts To Invest In Alternative Fuels

(CBS/AP)  Top executives of the five biggest U.S. oil companies were pressed Tuesday to explain the soaring fuel prices amid huge industry profits and why they were not investing more to develop renewable energy sources such as wind and solar power.

The executives, peppered with questions from skeptical lawmakers, said they understood that high energy costs are hurting consumers, but deflected blame, arguing that their profits - $123 billion last year - were in line with other industries.

"On April Fool's Day, the biggest joke of all is being played on American families by Big Oil," Rep. Edward Markey, a Democrat, said as his committee began hearing from the oil company executives.

With motorists paying a national average of $3.29 a gallon at the pump and global oil prices remaining above $100 a barrel, the executives were hard pressed by lawmakers to defend their profits.

"The anger level is rising significantly," said Rep. Emanuel Cleaver, a Democrat, relating what he had heard in his district during the recent two-week congressional recess.

Irving-based Exxon Mobil and Houston-based Shell, BP America and Conoco-Phillipsjoined California-based Chevron in earning a combined $123 billion last year because of rising prices.

Exxon Mobil made a record $40.7 billion last year alone, reports CBS News correspondent Chip Reid.

Alluding to the fact that congressmen often do not rate very high in opinion polls, Cleaver told the executives: "Your approval rating is lower than ours and that means you're down low."

"I heard what you are hearing. Americans are very worried about the rising price of energy," said John Hofmeister, president of Shell Oil Co., echoing remarks by the other four executives from Exxon Mobil Corp., BP America Inc., Chevron Corp., and ConocoPhillips.

But the executives rejected claims that their companies' earnings are out of step with other industries and said that while they earn tens of billions of dollars, they also invest tens of billions in exploration and oil production activities.

"Our earnings, though high in absolute terms, need to be viewed in the context of the scale and cyclical, long-term nature of our industry as well as the huge investment requirements," said J.S. Simon, Exxon Mobil's senior vice president.

But Markey asked Simon why Exxon Mobil hasn't followed the other companies in investing in alternative energy. The four other companies reported spending as much as $3.5 billion in recent years on solar, wind, biodiesel and other renewable projects.

"Why is Exxon Mobil resisting the renewable revolution," asked Markey.

Simon said his company, which earned $40 billion last year, had provided $100 million on research into climate change at Stanford University, but that current alternative energy technologies "just do not have an appreciable impact" in addressing "the challenge we're trying to meet."

Executives from the largest U.S oil companies have been frequent targets of lawmakers, frustrated at not being able to do much to counter soaring oil and gasoline costs.

In November, 2005, Hofmeister and the top executives of the same companies represented Tuesday sat in a Senate hearing room to explain high prices and their huge profits.

The prices are of concern, Hofmeister said at the time, adding a note of optimism: "Our industry is extremely cyclical and what goes up almost always comes down," he told the skeptical senators on a day when oil cost $60 a barrel.

About six months later, when the cost of the same barrel reached $75, the executives were grilled again in Congress on their spending and investment priorities.

Recently oil prices reached a peak of $111 a barrel. While declining a bit in recent days, the price remains over $100.

Markey challenged the executives to pledge to invest 10 percent of their profits to develop renewable energy and give up $18 billion in tax breaks over 10 years so money could be funneled to support other energy and conservation.

The executives said the companies already are spending billions of dollars - more than $3.5 billion over the last five years - on renewable fuels such as wind energy and biodiesel, but rejected any tax increases.

"Imposing punitive taxes on American energy companies, which already pay record taxes, will discourage the sustained investment needed to continue safeguarding U.S. energy security," Simon insisted.

"These companies are defending billions of federal subsidies ... while reaping over a hundred billion dollars in profits in just the last year alone," complained Markey, chairman of the Select Committee on Energy Independence and Global Warming.

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.

[jjp735i]

What again? Why does Congress waste it''s time on this? Congress NEVER finds anyone did anything wrong, not ever. Hearing after hearing after hearing, the results are always the same. The oil companies have done nothing wrong.

Congress looking for media time and sound bytes is more what this is about.

[samrensho]

What a joke. They''ll get a few softball questions and that''s it. Congress is on their payroll so don''t expect anything important. The guvment doesn''t give a tinkers dam about the public. They just want their payoff''s.

[harp1963]

If they are concerned about appearing before Congress, I wonder what they will be thinking when they are standing before Jesus some day and they really understand what powerless specks of dust they really are?

[omega39-2009]

Last time they faced a "grilling" Senator Ted Stevens (R) wouldn''t let the oil executives be placed under oath, allowed only certain questions, and actively controlled the length of questioning by fellow senators.In other words, a total sham. I hope we see something more substantive today.

[quepdds]

CONGRESS NEEDS TO ASK WHAT PART THE OIL COMPANIES ARE PLAYING IN DRIVING SPECULATION OF OIL FUTURES. THESE PRICES ARE ARTIFICIALLY INFLATED AND HAVE NO BASIS IN THE SUPPLY-DEMAND THEORY OF ECONOMICS. IF SOMEONE IN SAUDI ARABIA SNEEZES; THE SPECULATORS(OIL COMPANIES) DRIVE UP THE PRICE BY $2.00 A BARREL.

[racam_us]

This is nothing but a show for the media. Congress could care less about oil prices. They just want the people that elected them to think they are concerned. I doubt that the average person in congress could tell us the price of a gallon of gas or the price of a gallon of diesel fuel. They are not there to watch out for the people who elected them, they are there to protect the Grand Old Party that they serve. I just watched a segment on the Today Show that showed the shattered life of a soldier that was paralyzed from the chest down in Iraq, a war that he called unjust, and even though 70% of the people call that war unjust it does not change anything. How do these people in Congress sleep at night? How does the current administration sleep at night? How do the people who keep holding onto Bush''s failed policies sleep at night?

[tomanyt]

Why??? Didn''t congress do this already? What a complete waste of time.

[inventagod]

If you REALLY investigated,

You would find Congress wallets

lined with Oil Dollars

and Defense Dollars.

[pollroller1]

Yep, they are going to give them a good talking to. LOL

[infe5]

If you want gas prices to come down and oil company profits to shrink, there is a simple solution: Buy less gas. Big oil is raking in profits because of one reason; an ever increasing demand for gas. These companies don''t make profit off of the increase in crude prices because they have to absorb those increased costs as well (these companies refine crude). So the only reason they charge this much is because...guess what? WE ARE WILLING TO BUY AT THIS PRICE! Reduce demand, price comes down. Simple as that.

[quetzal0666]

theyre trying the wrong people, this is just a pony show, the real culprits are the Refineries..

[shuggie55]

who voted for bush? shame on you - he''s best friends with these guys.

[sumarongi]

Oh, I get it. Congress has decided to throw a barbecue to celebrate the increase in dividends from their oil investments. I bet it''s being paid for by our tax dollars.

[lochlan-2009]

Congress should do an investigation into the ties between the oil industry and themselves. Of course, every American would expect the results we got from the CIA internal investigation on drug trafficing.

It''s never going to end until the masses make a list of corrupt representatives and start stringing these crooks up and chase them in world wide hunts to catch them as they flee.

No American seems to have that kind of commitment and love for their country anymore, or their families.

Freedom isn''t free.

[future_watch]

We know what some of the oil companies did with their profits...they supported Presidential candidate Barack Obama according to a Newsweek story at http://www.newsweek.com/id/129895. This is despite Senator Obama''s contention in his current political t.v. ads that he doesn''t take money from oil/energy companies.

[pollroller1]

These congressional hearing are like monday night wrestling. We know it''s fake but we still like to watch.

[jdlenner-2009]

The reason oil prices are so high is that oil is priced in dollars. These jokers in Washington prosecute massively expensive wars in the middle east while implementing wreckless fiscal policy at home thus greatly devaluing our currency and driving up the price of oil (for Americans). If you were buying oil in Euros, you wouldn''t have noticed much of a change. But if you are buying ANYTHING in dollars, you''ve noticed a HUGE difference over the past several years. EVERYTHING is way more expensive if you are buying in dollars. Don''t believe me? Take a vacation in Europe or anywhere else for that matter.

I lived abroad for the past 10 years and our money became so worthless during that time that I had to move back to the US because I couldn''t afford to live in a third world country any longer! What kind of sense does that make?

Congress should grill itself about how it is bankrupting the whole country. If they got the value of the dollar back to parity with the Euro, oil and gas prices would take care of themselves.

[rowdytexan2]

While they''re up there, they should ask these guy how much their salaries and bonuses were before reporting those profits and point out how well paid they are for ripping off the public.

How can they be paying over $100 a barrel for oil and still be making record profits? You have to understand that this is profit! We need an accounting of what they actually spent on exploration and development before those profits were made. Sounds like they''re not doing a *** thing except upping the price of gas at the pump.

[x32792]

After a little chit-chat, members of Congress and Oil Executives then had an expensive lunch together. Am I the only one fed up with the best special interests fluffing, non-representative government money can buy?

[redbds]

Here we go with another show for the public. Congress is just wasting time so they can look like they are doing something and point their liberal fingers at the administration for doing nothing all while they fill their pockets and campaign coffers with big oil dollars. It is also high time the the tax breaks for big oil come to an end. Give the tax breaks to companies that truely invest in renewable energy so we can get off of our addiction to oil.

[sumarongi]

Congress Has Big Questions for Big Oil

Yeah, like how big a donation can we expect this time?
Or
What''s the increase in our stock dividends?
Or
What more can we do for you?

[dogband]

When we elected a oil man puppet for big oil and big business, were we too STUPID to think we would not be in this exact situation?

The people who voted in our last two elections have got to be the most STUPID people on the planet.

I''m guessing there is a good chance many of them will vote again.

Hopeless.

[rowdytexan2]

In a new ad, Obama says, "I don''t take money from oil companies."

Technically, that''s true, since a law that has been on the books for more than a century prohibits corporations from giving money directly to any federal candidate. But that doesn''t distinguish Obama from his rivals in the race.

We find the statement misleading:

Obama has accepted more than $213,000 from individuals who work for companies in the oil and gas industry and their spouses.

Two of Obama''s bundlers are top executives at oil companies and are listed on his Web site as raising between $50,000 and $100,000 for the presidential hopeful.

Good find, Future_Watch, seems like the oil execs are using their fine salaries and bonuses to support an incompetent who will just go along with whatever legislation is passed.

[omega39-2009]

These companies don''''t make profit off of the increase in crude prices because they have to absorb those increased costs as well (these companies refine crude). So the only reason they charge this much is because...guess what? WE ARE WILLING TO BUY AT THIS PRICE! Reduce demand, price comes down. Simple as that.

Posted by infe5

Infe5, while I agree that in an ideal world reducing demand would increase supply and result in falling prices, I don''t believe we live in an ideal world. Enron has proven how companies can collude and manipulate supply by scheduling concurrent maintenance at several refineries for instance.

[lilvinnyb]

Every time oil prices go up, congress calls in the executives for show. What was buried in the news a couple of months ago is that the GAO found that the oil companies were doing NOTHING WRONG. This a result of an investigation called for by Charles Shumer.

If I were the execs I would ask congress...

Why is the US the ONLY country that IS NOT exploring for new sources of oil? Mexico just found one of the largest deposits just off their shores.

Why does it take 20 years to build a new refinery because of liberal environmentalists? Build new refineries in Michigan where they have lost manufacturing jobs and create thousands of jobs.

Why do we let millions of barrels of crude sit in wildlife refuges when technology has changed to where it can be extracted environmentally friendly?

Why do the kennedys oppose a wind farm off the coast of Nantucket?

Why are food prices increasing? Ethanol is corn based, the demand for ethanol is increasing, causing the price of corn (which is a basis for MANY food products) to increase.

Oil fills our trucks, planes, trains, and every other part of our economy. Green power will NEVER be able to drive an industrial economy.

Growing countries are competing for the same oil we need, combine this with a lack of refining capacity and speculation, prices are bound to increase.

Ignorant liberal clowns....can never see the forest for the trees, unless of course you decide to cut them down!!!

[joyous88]

it''s called greed stupid,

it has been glorified by the evangelical right

and the neocon trash that runs the current administration,

as something like a virtue, I heard a faux news spinner say that greed is a good thing on TV,

Our president is a greed driven criminal so why not

the oil companies that bush is in bed with

[joyous88]

the republicon addicition to big oil is as flagrant

and obvious as global warming, which they deny to keep

their profits up

capitalism and neo conservatism =two sides of the same

greed driven coin

[sumarongi]

We have seperation of church and state.
Now it''s time for seperation of state and lobbyists.

[omega39-2009]

Posted by lilvinnyb

Of course the real story behind oil prices is a weak dollar policy pursued by this administration and a speculative "terror tax" again caused by the foreign policy of this administration. You can keep blaming the evil libs though.

[Markus]

GREED KILLS

[walker1209]

While I think that gas prices are extremely high in this country, they are just as high in other developed countries and have been that way for some time. Americans scream about the price of gas but I can stand at any bus stop in my city and count the number of gas guzzlers that pass me in 1/2 hour on any given day. We have a right to buy any kind of vehicle we please, just be prepared to pay the price for the fuel to make it run.

There are many problems with the oil companies and their shoddy practices but the same holds true for all energy companies in this country. I find most people don''t mind paying their fair share, but this is getting to be too much. I have a four room apartment and my average utility bill is $310.00 - folks we are all getting screwed by these people.

Why is Congress wasting our time with these bogus hearings?, its not like anything is going to change.

[cbutler69]

Its called GREED and I think we need to get rid of all these lobbyists as well. If they can make that kind of profits then they sure dont need to get subsidies from the tax payers to line their pockets. Its time they opened some of these capped wells they have around the US and get some oil flowing to the people. To bad the truckers cant afford to shut down for a week, it would bring everything to a stand still and maybe then congress would pay attenttion to the people and our plight.

[omega39-2009]

To bad the truckers cant afford to shut down for a week, it would bring everything to a stand still and maybe then congress would pay attenttion to the people and our plight.

Posted by Cbutler69

That''s why Bush is in such a big hurry to get Mexican truckers on US highways.

[joyous88]

these guys pay lower taxes and their companies pay lower taxes than you and I do.

capitalist pigs

[andrew0120]

Exxon only had a 10% profit margin last year. That means that they spent $.90 of every $1 on costs of exploration, development and operations for their industry. They are not jacking up prices. It is just the sheer volume of product that they are supplying. Most companies would not be able to survive on a 10% profit margin. I don''t hear anyone complaining about industries that have a 200% profit margin. Exxon is a HUGE company. Walmart is the only company ranked above it with Fortune 100 companies. Gas prices in Europe are double what they are here. Everyday I see huge SUVs and Pick up trucks driving around. If gas prices were such a problem people would stop buying those things.

[stn_sage]

Looky folks! These Congressional hearings are nothing but ''shows'' to dupe the public! These congressmen and women take ''contributions'' from oil companies reps, execs, supporters, staff, relatives, etc.---then, turn around and pretend to be tough on them at these hearings.

This is supposed to convince you that your congressmen/women are hard at work protecting your interest! They are then relieved of any responsibility of looking into and/or acting to control rising prices.

If they REALLY wanted to, they could take action to do away with tax breaks. But, they don''t! That tells you what you REALLY need to know!

Prices won''t go down until the middle class is as broke as the lower class and no one but upper income earners can afford to buy gas!

[newmar3]

You have to get rid of the idiot in the White House first. Anything that hurts his oil buddies is automatically bad, and our elected officals don''t have the cajones or good sense to come together for their constituents back home. They are just on a free trip to DC.

[antoniof123]

Posted by Andrew0120 at 10:35 AM : Apr 01, 2008

Actually your 10 percent is not quite correct. That is what only one part of the profit is they are veritcally intergrated which means they control the entire process from beginnig to end. They pump the oil and make a profit sell it to there processing plants and make a profit, then sell it to their stores and make a profit, then the stores pay a fee for being part of their distrubuiton network.

As always the neo con party uses shreads of truth. While it is true that each industry makes only 10 percent profit after taxes and that is very high. Look at how much most indusrites make. Grocery stores less than 0.01 per $100.00 so that said the oil industry is making a lot of money off of us.

[rowdytexan2]

Posted by Andrew0120 at 10:35 AM : Apr 01, 2008

One word! Baloney! $40 billion in PROFIT! That is after exploration and paying off executives their bonuses for ripping off the public!

Get real!

[mjvw2]

The companies that make women''s (and some of you nice fellas) make-up make 21 percent on the dollar. Where is the Congressional investigation.

[enriquecaliente]

What needs to be addressed is their BLOATED salaries. And why the Senior management at the Bank''s that have caused this credit crunch and this mortgage crises still are not in jail and or have a job. Oh pardon me, I forget that, they''re Bushy buddies.

Where are the WMD''s.?

Have we found Bin Laden yet.?

Why are the people who outed a CIA agent, still walking free.?

McCain was deionized by the same people who say, he''s the CONS best bet. What happened.? After 8 years, he''s better now.?

Hey can we look at that intelligence again.

[wize2u]

Last year they asked 6 of the oil companies how they justified having the biggest profits of any companies, ever...the excuses and bull flowed, but the answer that shut up the congressman asking the questions was: well we are making huge profits, yes, but we are paying more taxes than ever. So it''s ok to be a war profiteer as long as the government gets its cut. George W. may have started this war to make his oil buddies (in saudi arabia as well as texas) rich.

[sdcjd1]

Even if Congress passes legislation taking away the oil companies tax breaks, their buddy Bush will keep it from passing.

[fstop100]

Congress is a bunch low life scum. You think they are going to help the average consumer? In your dreams!

[fstop100]

We need to regulate officers salaries too. These guys make way more than 300 times the salries of average employees.

[walt1944-2009]

The Great Emperor Bush II cannot understand why Congress wants to "grill" BIG OIL CEO''s about the huge profits BIG OIL has been making the past 7 years!

The Great Emperor sees nothing wrong with this as it fits in with his philosphy and that of the neocon Fascist Nazi Republicans concerning the pursuit and growth of "Ferengi" economics. This states that the rich get richer and corporate profits are maintained and increased no matter who gets hurt further down the ladder!

The Great Emperor Bush II firmly believes as do the neocon Fascist Nazis that the "good life", belongs to those who can afford it and if you can''t, then TOO BAD!!! This includes such items as food, clothing, medical care, utilities, and of course HOUSING!!!

SIG HEIL, BUSH!!!!
sig heil, (more of the same) McCain????

[mlh5112]

Truckers and working consumers cannot afford to boycott gas stations for a week but what if all disabled and retired and any form of unemployed people were to boycott for a week or two or more. They could still do neccessary things like go to doctor appointments or go to the store but knock off all absolutely neccessary fuel useage. I think that would begin to get our message accross to the oil companies and their buddy on the mountain top.

[videoamerica]

The congress should regulate the oil industry as a public utility.

Homeowners who heat their homes with electricity get their service form a company that is regulated as public utility. Those who purchase natural gas that is piped into their homes, have the protection of dealing with a public utility.

Companies that are regulated as a public utility are usually allowed a reasonable profit by the government such as 10%. That should be enough for the oil companies.

[mjvw2]

Did anyone take Econ 101. Companies don''t pay taxes; people do. Companies collect taxes.

[ioweign]

Did anyone take Econ 101. Companies don''''t pay taxes; people do. Companies collect taxes.

Posted by mjvw2 at 11:24 AM : Apr 01, 2008

Maybe you should take Reading 101 over. If Companies don''t pay taxes then why do they get tax breaks...


From the article above:

The House Select Committee on Energy Independence and Global Warming wants to know why, with such big profits, the oil industry is trying to hold on to $18 billion in tax breaks.