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.

[sjc_1]

I do not think bashing oil execs is helpful, but taking the tax breaks for oil and using them for renewable energy is. There is a consequence for every action. Tax breaks for oil have not led to more exploration success. The replacement numbers are lagging and continue to do so years after all the tax breaks.

[speakinup]

Nothing but lip service by our congress.

When are they going to mandate the use of renewable energy THEMSELVES! You know, like when they forced industry to put emission controls on vehicles.

Industry is NOT going to clean up their act, CONGRESS is the one FAILING here!

[dzapple]

Stan Meyer''s Dune Buggy that ran on water. Hydrogen/Oxygen fuel in an ICE motor. On board electrolysis, no hydrogen tanks, no bombs on-board, just water. (1998) It ran 100 miles per gallon! Stan is the mustard seed of Water Powered Cars!He was a shame to hear that he was poisoned (March 98'') and longer with us. He died in the parking lot of a restaurant in his home town of Grove City, Ohio. Sharks came a week later and stole the the dune buggy and all of his experimental equipment, according to his brother, Steve. Stan said while he was alive, that he was threatened many times and would not sell out to Arab Oil Corp.s The Military was going to use this technology in their tanks, jeeps, etc. He had patents on his invention and was ready for production. Only $1,500 to equip your car! No gasoline, just water. Stanley said he was offered a billion dollars from an Arab to basically shelf his idea. Stan said, "no, this technology is for the people." Who you suppose poisoned Stan? A jealous onlooker? Do you think the Oil Corp.''s are happy to see a converted car running for FREE?? If GW wanted my respect,I''d have inventors like Stan on TV and with me in the White House, discussing how to save this dying planet and break the bonds of ruled corruption and greed. I have read the DOE''s hydrogen & fuel cell technology and they don''t mention making hydrogen from pure water, until the last page. They talk about Hydrogen Gas Stations at how much per gallon?

[payasyougo]

"Between 1981 and 2006, government collected $1.65 trillion in total taxes after adjusting for inflation. That is 65 percent more than the combined earnings of the 16 largest domestic oil companies during the same period." from http://www.taxfoundation.org/blog

And what has congress done with that money?

You can try and grill the oil companies but the real reason we are in this pickle is government regulation and taxes. Open up the coast and Alaska to more drilling, eliminate the winter/summer gas which backs up refineries and has shown NO benefit, mandate higher fuel mileage on automobiles (gee) and most importantly, stop sucking off 40%(?) of profits in taxes so that you can fund your thousand plus earmarks.

Your government is the problem, not the solution.

[rptizzle]

We have got to eliminate the term "oil production" from our vocabulary as it is used in this article. People what these companies are doing is actually OIL EXTRACTION and should be called just that. Oil Production gives the impression these companies are actually producing something, as in growing wheat. Oil does not grow in trees. There''s a limited supply underground and more oil will not be created unless this planet has another period of intense global warming and the right conditions that created oil. We have what we have and these companies just suck it out of the ground. They are not producing anything - what they are doing is oil extraction.

[rle4]

This is an outrage! Congress is grilling the oil companies--not to find out how they serve the American people that put them into office, but to find out why THEY are not getting a piece of the pie. The American people ought to be furious that such a dog and pony show is allowed to go on. In a time when the FEDS are talking recession; the housing market is in shambles and oil prices keep soaring--Congress whats to know why they are getting more money from the oil companies. Just in case anyone has forgotten, excessive profits from war--a large contributor to the rise in crude oil--is called profiteering. I believe that it is still a crime in this country.

[rle4]

This is an outrage! Congress is grilling the oil companies--not to find out how they serve the American people that put them into office, but to find out why THEY are not getting a piece of the pie. The American people ought to be furious that such a dog and pony show is allowed to go on. In a time when the FEDS are talking recession; the housing market is in shambles and oil prices keep soaring--Congress whats to know why they are getting more money from the oil companies. Just in case anyone has forgotten, excessive profits from war--a large contributor to the rise in crude oil--is called profiteering. I believe that it is still a crime in this country.

[ov442]

Sure the price on the stock exchange is manipulated as much as possible by speculators and traders, however, the fact remains that there has not been a shortage of oil in America or internationally this entire period from 2001-2008 (bush''s tenure) when prices began to rise and continue to rise.
So what then to speculators fear that makes them raise prices?
The Spector of a shortage based on thin lines of JIT petroleum production and then forward in the Gas Refining business.
You see, Big OIL runs oil pumping production, and they also run refineries. They LOVE it whenever someone spills oil, or a natural disaster takes place and shuts down facilities, or a terror attack raises new fears from some oil producing 3rd world nation.
Once that happens, they allow production to fall. This causes a theoretical potential shortage and the speculators go nuts.
Then in times where there is little to cause speculators worry, and Fuel and Oil stocks rise just a little bit, they CUT PRODUCTION to allow stocks to drop, thereby hedging their bets on pricing so it never really has the ability to Drop a LOT like it does to Rise A LOT.
This is the industry-wide price controlling and manipulation that the Oil companies have been doing for the last decade.
OPEC is right when they say theres enough oil, because there is.
Why Congress doesnt call them out on this is beyond me.

[lherault]

Gasoline Smasholine, why didn''t congress ask about the high cost of home heating fuel. If big oil is making so much profit, couldn''t they afford to cut the price of heating oil? We can choose not to drive as much, to car pool, use public transportation and more fuel efficient cars but we can''t choose to not heat our homes.

[hungry1968]

This is ENRON ALL OVER AGAIN - Artificially high prices so that the executives can party on private jets on their way to Dubai.

Posted by watcher269 at 02:44 AM : Apr 02, 2008





They should have had Cheney at the hearing too, getting grilled on his "top secret, national security related" energy meetings that he had with these executives.

It was right after those top secret meetings, that the cost of oil went through the roof. If for nothing else, they should all be arrested for insider trading.

[oleander8]

''Congress Hits Big Oil On Renewable Energy''

...with what? cotton-candy? Every time the public starts getting too restless, Congress holds ''hearings''. Well, that and $5 will get you large, fancy coffee.

Make them invest in public transportation so we can get out of our automobiles.

Useless, useless government.

[Gary Kempf]

Meaningless,empty,political dancing in front of the camera. They will do what they do so well, absolutely nothing.........

[payasyougo]

Congress started this ball rolling back when they let Exxon buy Mobil. The oil industry knows how to plan ahead...

[ahrats]

Congrees just talks to the oil companies but does not do anything probably because their pockets are weighed down by the all the money funnelled into to them by said oil companies. The U.S. government could do something but it''s not a crisis yet, like the housing market, and banks are making big profits over the high oil prices set by speculators who have only thier interest and the banks in mind not the people who have to live with them. Most other conuntries the government controls the oil companies not the other way around.

[sistatee-2009]

Congress hits big oil. April Fool''s.

[nonayabiness]

Wonder if/when oil prices will get high enough that it''s no longer favorable to ship lead from China?

[watcher269-2009]

This is ENRON ALL OVER AGAIN - Artificially high prices so that the executives can party on private jets on their way to Dubai.

[caliengineer]

Um... *ahem*... They are overcharging us for our tea.

[popstom1]

why DID GM junk all the EV1''s

[irliberal]

This article''s title is "Congress Hits Big Oil On Renewable Energy"

Precisely what does "hit" mean? Scold? Berate?

Without teeth, this means nothing, therefore congress has done - nothing.