Congress Hits Big Oil On Renewable Energy
Top Executives Grilled On Steep Gas Prices Vs. Big Profits, Efforts To Invest In Alternative Fuels
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Oil Profits Questioned
Congress will ask oil executives why they're enjoying large profits and doing so little about the fuel crisis. Maggie Rodriguez speaks with Dem. Rep. Ed Markey from Mass.
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Oil Execs Called To Congress
Oil companies are posting record profits while consumers are paying record gas prices. Lawmakers want to know why. Chip Reid reports.
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Oil Execs Defend Prices
Congress grilled top oil execs on the high price of gas and their record high profits. Chip Reid reports.
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Top executives of the five biggest U.S. oil companies testify before Congress on Tuesday, April 1, 2008. (CBS)
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Skeptical lawmakers peppered top executives of the five biggest oil companies with questions about high energy costs and investment in renewable energy sources in Washington, D.C., on Tuesday, April 1, 2008. (CBS)
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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.
© MMVIII, CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.



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See all 337 CommentsCongress looking for media time and sound bytes is more what this is about.
If you REALLY investigated,
You would find Congress wallets
lined with Oil Dollars
and Defense Dollars.
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.
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.
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.
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?
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.
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.
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.
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!!!
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
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
Now it''s time for seperation of state and lobbyists.
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.
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.
Posted by Cbutler69
That''s why Bush is in such a big hurry to get Mexican truckers on US highways.
capitalist pigs
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!
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.
One word! Baloney! $40 billion in PROFIT! That is after exploration and paying off executives their bonuses for ripping off the public!
Get real!
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.
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????
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.
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.
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