WASHINGTON -- Top executives of the country's five biggest oil companies said Tuesday they know record fuel prices are hurting consumers, but they argued that it is not their fault, and that their profits are in line with other industries, said the Associated Press.
Appearing before the Select Committee on Energy Independence & Global Warming, the oil company executives were pressed to explain why they should continue to get billions of dollars in tax breaks when they made $123 billion last year and motorists are paying record gasoline prices at the pump.
''On April Fools' Day, [image-nocss] the biggest joke of all is being played on American families by Big Oil,'' said Representative Edward Markey (D-Mass.).
''Our earnings, although 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, senior vice president of Exxon Mobil Corp., which made a record $40 billion last year. ''We depend on high earnings during the up cycle to sustain…investment over the long term, including the down cycles."
The up cycle has been going on too long, suggested Rep. Emanuel Cleaver (D-Mo.). ''The anger level is rising significantly.''
And it was visible along highways across the country Tuesday, as many independent truckers parked their rigs and others slowed to a crawl to protest high fuel prices. Long lines of trucks were moving at about 20 mph on the New Jersey Turnpike, and three drivers were ticketed for impeding traffic on Interstate 55 outside Chicago, driving three abreast at low speeds.
Congress often doesn't rate very high in opinion polls, Cleaver told the executives: ''Your approval rating is lower than ours, and that means you're down low.''
Several lawmakers noted the rising price of gasoline at the pump, now averaging $3.29 a gallon amid talk of $4 a gallon this summer.
''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 including representatives of BP.
While Democrats hammered the executives for their profits and demanded they do more to develop alternative energy sources such as wind, solar and biofuels, Republican lawmakers called for opening more areas for drilling to boost domestic production of oil and gas.
Rep. James Sensenbrenner (R-Wis.), the committee's ranking Republican, asked what would bring lower prices. ''We need access to all kinds of energy supply,'' replied Robert Malone, chairman of BP America, adding that 85% of the country's coastal waters are off limits to drilling.
But Markey wanted to know why the companies aren't investing more in energy projects other than oil and gas—or giving up some tax breaks so the money could be directed to promote renewable fuels and conservation and take pressure off oil and gas supplies. ''Why is Exxon Mobil resisting the renewable revolution?'' asked Markey, noting that the other four companies together have invested $3.5 billion in solar, wind and biodiesel projects.
Exxon is spending $100 million on research into climate change at Stanford University, replied Simon, but current alternative energy technologies ''just do not have an appreciable impact'' in addressing ''the challenge we're trying to meet.''
Click hereto read the full statements of Markey and the oil executives, as well as to view video of the hearing.
Meanwhile, the Senate Energy & Natural Resources Committee is scheduled to hear testimony on Thursday about the cause and effect of higher gasoline and oil prices, including testimony from the National Association of Convenience Stores (NACS), the group said.
NACS Vice President of Government Relations John Eichberger is one of six scheduled witnesses that will participate in the Thursday, April 3, hearing scheduled to begin at 9:30 a.m. EDT. The hearing will be available for viewing on the committee's website (click here).
Other scheduled witnesses include Sean Cota, PMAA northeast regional chairman of the Petroleum Marketers Association of America (PMAA); Jeffrey Harris, chief economist of the Commodity Futures Trading Commission; Sarah Emerson, managing director of Energy Security Analysis Inc.; Kevin Book, senior analyst and senior vice president at Friedman Billings Ramsey & Co. Inc.; and Jim Burkhard, managing director of the oil and gas group for Cambridge Energy Research Associates (CERA).
NACS said Eichberger will address retailer concerns and the context related to motor fuels retailing, including the impact of low margins and high credit card fees on an industry that is almost exclusively made up of independent retailers.
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