Oil Executives Defend Profits to Congress
Oil Executives Defend Profits to Congress
As the price of gasoline rises toward $4 per gallon, top oil executives explain to a House panel why they need $18 billion in subsidies when their companies rake in huge profits. Democrats want to end the tax breaks and spend the money on renewable sources of energy like wind and solar power.
ROBERT SIEGEL, host:
From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.
MICHELE NORRIS, host:
And I'm Michele Norris.
On Capitol Hill today, executives from the country's five biggest oil companies were in the hot seat. They tried to defend their record-high profits in front of a panel of skeptical lawmakers.
These days, gas prices nationwide are averaging $3.29 a gallon. Most of the oil executives emphasized that their companies are working to develop other sources of energy. But they insisted they still need $18 billion in tax breaks over the next decade.
NPR's David Welna has this report.
DAVID WELNA: This is not the first time a congressional committee grilled big oil company executives on soaring profits. Two and a half years ago when Congress was also considering pulling the plug on tax breaks for those firms, here's what Exxon Mobil's Lee Raymond had to say.
Mr. LEE RAYMOND (Chief Executive Officer, Exxon Mobil): History teaches us that punitive measures hastily crafted in reaction to short-term market fluctuations will likely have unintended negative consequences.
WELNA: Raymond has since left Exxon Mobil with a $400-million retirement package. And the price of oil has soared from around $60 a barrel then to $100 or more this week.
Ed Markey is the Democrat who chaired today's hearing at the House Energy Independence and Global Warming Committee.
Representative EDWARD MARKEY (Democrat, Massachusetts): So, on April Fool's Day, the biggest joke of all is being played on American families by big oil while using every trick in the book to keep billions in federal tax subsidies even as they wreck rake in record profits.
WELNA: Some of the executives responded, expressing sympathy for their customers.
Here's Chevron's Vice Chairman Peter Robertson.
Mr. PETER ROBERTSON (Vice Chairman, Chevron Corporation): All Americans feel the pain of $100-oil. And it's not just in the pump - everything is more expensive. People are concerned about rising costs and rightly so.
WELNA: But Exxon Mobil Vice President Stephen Simon fiercely defended his company's profits.
Mr. STEPHEN SIMON (Vice President, Exxon Mobil): Our earnings, although high and absolute terms, need to be viewed in the context of the scale and cyclical long-term nature of our industry.
WELNA: Chairman Markey shot back at Simon that other oil companies are investing billions of dollars in alternative energy.
Rep. MARKEY: How much money are you putting into that.
Mr. SIMON: About $100 million dollar in
Rep. MARKEY: A hundred million dollars, but you made $40 billion last year.
Mr. SIMON: Mr. Chairman, putting more money into something does not necessarily equal progress.
Rep. MARKEY: Well, Shell is putting money into wind. BP is putting money into renewables. And we're not talking about 100 million over 10 years; we're talking about billions of dollars which are being invested. Why is Exxon Mobil resisting the renewable revolution?
WELNA: The president of BP America, Robert Malone, said it's true. His company invested $750 million just last year in alternative energy.
Mr. ROBERT MALONE (President, BP America): But the hard truth is that even the major improvements in energy efficiency with the rapid growth of solar, wind, and biofuels, the United States will consume more oil, more natural gas and coal in 2030 than it does today.
WELNA: Still, the oil executives were left with a stern warning from Michigan Republican Candice Miller.
Representative CANDICE MILLER (Republican, Michigan): If you refuse to change with America, then I believe you're going to see a backlash from your customers - the American people who are sick and tired of paying huge prices at the pump only to see your company swimming on their money. And you're going to see a backlash from other industries that are being decimated by high fuel prices. And because of that, you will also see a backlash from this Congress that could go further than just the elimination of tax breaks.
WELNA: The House has already voted to end those tax breaks.
David Welna, NPR News, the Capitol.
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