Gas pushing $4-gallon: Oil's not well on Capitol Hill: The Swamp
 
The Swamp
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Posted April 1, 2008 9:00 AM
The Swamp

by Mark Silva

With gasoline approaching $4 per gallon, the top-five oil executives have dates with a congressional committee today.

"These companies are defending billions of federal subsidies ... while reaping over a hundred billion dollars in profits in just the last year alone," complains Rep. Edward Markey (D-Mass.)

Top executives of Exxon Mobil Corp., Shell Oil Co., BP America Inc., Chevron Corp. and ConocoPhillips – which earned a combined $123 billion last year – are set to testify before the Select Committee on Energy Independence and Global Warming.

Markey, chairman, wants to ask why, with such profits, the oil industry is fighting to keep $18 billion in tax breaks, stretched over 10 years. Executives will be asked to explain how they can get energy prices down in the short run and "in the long run what are they going to do to shift the focus to a renewable energy agenda."

"We have to move beyond this oil economy," Markey said today on CBS News' The Early Show. "We have to move to a renewable energy economy. ... We can never get out of this trap as long as the oil companies want to hold us hostage to this old agenda."

The House last year and again on Feb. 27 approved legislation to end 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.

The oil industry has argued that the tax breaks assure continuing investment in exploration, production and refinery expansions.

President Bush has promised to veto any bill eliminating the exemptions, arguing that the oil companies should not be singled out.

The threat of $4-a-gallon gasoline, perhaps this summer, and oil selling at over $100 per barrel, is making political waves, even as lawmakers conced there is little that Congress can do to bring prices down.

Some have called on the administration to release oil from the government's emergency reserve to put more supply on the market. The White House rejects use of the oil in the federal Strategic Petroleum Reserve to influence prices.

Congressional hearings are nothing new.

In May 2006, the top executives of the same companies appearing today were grilled on spending and investment priorities in light of soaring oil prices.

The cost of a barrel of oil then: $75.

In February, at a press conference, the president was asked about his advice for the average American “facing the prospect of $4 a gallon gasoline….

“Wait, what did you just say?’’ Bush asked. “You're predicting $4 a gallon gasoline?

“A number of analysts are predicting…’’ the reporter replied.

“That's interesting,’’ Bush said. “I hadn't heard that.’’

The White House may be hearing about it this summer. And voters may be hearing about it on the campaign trail.

The Associated Press contributed to this report

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Comments

Markey's a flannel-mouthed buffoon, trying to evade Congress's responsibility for higher gas prices by demonizing private business.

If Congress really wants to do something abut high gas prices, they can reduce or eliminate the federal gas taxes.

That's about the only thing they CAN do that would help. But they won't.


I note that diesel is $4.06 at the pump in my neck of the woods. Glad I have a 4cyl gas sipper.

I like the 'folks' that buy a huge duelie diesel truck to pull around a 35 foot bi-level on wheels, and call it 'camping'.


The solution to the pump prices is to let the US drill for more oil in the US and Canada and to build more refineries.

Apparently, this is too difficult an idea for Democrats to understand.

Canada has the worlds second largest oil reserves, at over 170 billion (yes BILLION) barrels, but environmentalists and other leftists fight every opportunity to make the US and Canada self sufficient in oil.


Well for our conservative friends who post here.

Please look at George Will's comments this Sunday. He wanted Will's law.

Paraphrasing. Any oil company, pharmaceutical company, finance company, etc. that gets money from the Federal Government would be subject to Will's law. It would say that while they are getting Federal money, no executive of their company could be paid more than a GS-15 in the government. That's about $150,000.00/year.

Works for me.


Illinois could do something about the gas situation also. They could switch from a percentage tax to a flat amount. Make it mandatory for all the other taxing bodies.

Why should the state get a back door tax increase when the price of gasoline increases?


I get a kick out of this. "President Bush has promised to veto any bill eliminating the exemptions, arguing that the oil companies should not be singled out." I wonder if this has to do with Bush having his hand in the oil industry. Who ever voted him in should be ashamed of themselves.


The fact that diesel is more costly is so bass-ackwards from where things should be, in terms of influencing energy policy!

Granted, there are few diesel sedans now being sold, however many more are coming for the '09 and 10 model years and they get far higher mileage than do similar gasoline sedan models, close to hybrid levels.

Diesel use and more efficient petrol engine & hybrid models should be encouraged -- and the oil companies should now lose their damn needless taxpayer subsidies!


The solution to the pump prices is to let the US drill for more oil in the US and Canada and to build more refineries.

Apparently, this is too difficult an idea for Democrats to understand.

Canada has the worlds second largest oil reserves, at over 170 billion (yes BILLION) barrels, but environmentalists and other leftists fight every opportunity to make the US and Canada self sufficient in oil.

Posted by: Dan C | April 1, 2008 10:09 AM

It's all about you and your right to drive a gas guzzler as you deem need, Dan. I don't blame you for being so short-sighted and self-centered. After all, we're all going to be dead sooner or later anyway, so why spoil the party worrying about future generations. Me me me me me me me me me me me me me me -- it's all about Glorious Me!


The only body making a "windfall profit" out of gas sales is the federal government.

Anyone who thinks otherwsie should be ashamed of themselves.


If Markey really believes that the U.S. should be run on a "renewable energy economy," then he should not be upset that gas prices are so high. He should be upset that they are not higher. Pricing oil out of the market is the only way to really drive Americans away from petroleum and to alternative energy sources. Yes, it will hurt the poor. But just about any ripple in the economy will hurt the poor more than anyone else, because they have the least cushion to absorb any buffeting. So the question is: How can you wean Americans off of oil and to solve the problem for "future generations?" Drive up the price of gas. Get people to drive less. Make alternative energy sources more cost-competitive. Save the planet. And then, sit back and enjoy the benefits. You cannot be in favor of low gas prices and believe that oil destroys the world. They are mutually exclusive positions.


This is Nancy Pelosi's dream to stick it to oil industry just like she'll stick it to us with a $2.4 trillion tax increase.
A blinkin you and all the environmental wackos don't want us to drive SUVS I thought America was a free country.
This stick it to the oil companies will just stick it to all consumers at the pump.
The oil companies have to drill for oil and be stopped by wackos like the Sierra Club and Al Gore and his nonsensical Global Warming. Then, they have to refine it and distribute it across America in tank trucks and pipelines and keep it coming daily.
The federal and state governemnt don't do anything for their tax money they just confiscate it or you could say steal it for they have no costs involved other than to grow their bureaucracy which is Gore's idea just make government bigger.
As President Reagan used to say I'm from the government and I'm hear to help you to paraphrase his joke about government.
If we want to live better lives we don't need liberal Democrat socialists regulating our lives and taxing us even when were dead. The Death Tax is called taxation without resperation.
We need oil companies and gas companies to explore for more oil not less and don't rely on corn which just raises the price of food.
Forget about hybrid vehicles they are ugly. Just drive and live a decent life wihout parasites wanting to take away our rights or or our liberties.
Tell Congress to watch out they are stealing at the pump. Jerry White, Springfield, IL


The only body making a "windfall profit" out of gas sales is the federal government.

Anyone who thinks otherwsie should be ashamed of themselves.

Posted by: Alice Palmer | April 1, 2008 11:17 AM

RNC Bruce is crossdressing again.

PS I use facts to conclude that oil companies have made RECORD PROFITS in the past few years. I don't base my understandings on preconceived partisan opinions you robot.


Dan C

You are aware of the fact that the US consumes almost 1/4 of the oil supply for the ENTIRE world?

If we've got anyone to blame for high oil prices it's ourselves.

Any type of oil conservation would be a step in the right direction for this country.

More drilling? How about we just tell the rest of the world that they can't use any oil? It's all for us.


State and local governments add 50 cents a gallon tax to our gas for doing nothing, and want to punish the oil companies for making too much money doing all the work.
Obama is touting his windfall profits tax, when it has already been tried and doesnt work:

http://www.taxfoundation.org/news/show/1168.html


So, Alice--How do you propose to pay for roads and infrastructure?


Where's the Clean Renewable Energy and Green Jobs? Can anyone say "Monopoly"?


Anyone who defends the oil companies as the poison our planet and rob us at the pumps is a complete moron who should be shipped to Iraq to fight for their share of oil


Alice must a Ron Paul Libertarian; They will all pay for and repair just the roads they use.


Dog,

Let me introduce you to the ways of the world. If as you and George Will suggested that a cap of $150K be put on the salaries of a company that got subsidies from the gov't - one of two things would happen. First, these companies would lose out on the talent war or second these executives would become "independent contractors" and be hired by the companies.

Would that salary cap also apply to the educational buraecracies that have administrators, principals, and even teachers making more than $150K?

The main reason oil is so high, is that China and India (you know those other countries that can'y use oil) are using mor oil now that their economies are becoming industrialized.

John,

Oil companies have made record profits; however, they have paid record taxes - over twice as much as they earned in net income (not including gasoline taxes). So who earns, sorry receives, more from the labor of the oil companies?


"The oil industry has argued that the tax breaks assure continuing investment in exploration, production and refinery expansions." - Mark Silva on April 1, 2008 9:00 AM

I realize that there is no better target in America than an oil company, at present, as the futures traders continue to bid up the price of oil. If you will, try to understand that the "tax breaks" that are referred to here are directly tied to NEW INVESTMENTS. No NEW INVESTMENTS, NO tax breaks.

The idea is to push the financial criteria for investing $$$ in a raggedy 50-75 year old refinery (as one possible example), in the direction of making that investment to upgrade an asset that is well within its' twilight years. Otherwise, THAT investment would NOT necessarily be made. There are always alternate investments like non-energy related areas (chemicals) or various financial securities. This certainly is not something exclusively unique to just the business of Oil.

The intent is to encourage investment in a specific energy area. It is NOT a straight-up subsidy transfer payment, as it will surely be portrayed by the honorable Rep. Markey (D). The government is not directly sponsoring the oil companies to gouge you, the consumer. It is intended to be an energy investment incentive, not unlike some made available on the individual tax payer level in recent years.

O.K., just a point of some bearing, I would think, for anyone out there that cares to try and understand these sort of things at more than a superficial level. I am personally for ALL forms of safe energy, conservation as much as possible. A part of my Freedom Equation is mobility. Unfortunately, my 2005 Sebring did not come with a sail mast.

Well, resume your Fire. I love this country.


It's amazing how these meatheads are blathering about all this supposed oil in the US. WAKE UP FOLKS! there is not that much good oil left. For those who are capable of reading charts I suggest doing some research on your own and stop listening to the TV or all the moronic talk show hosts.


Angry Beef,

How does 21 billion barrels of PROVED oil reserves sound?

http://www.eia.doe.gov/pub/oil_gas/natural_gas/data_publications/crude_oil_natural_gas_reserves/current/pdf/ch3.pdf

You can be like the dem Congress and just put your head in the sand and think somehow that oil will not be like any other commodity and defy the law of supply and demand - but I tend to bet if the supply soesn't increase, the price will.


I think we should ALL STOP going a specific gas station like Exxon across the country. If everyone just stopped going to one gas station eventually I think they would lower their prices to induce us to come back and maybe it will start a war of who has the "lower" price instead of who can "make the most money from all of us by raising their prices knowing we all need gas". It has gotten so out of control and won't get better until it gets worse and we need a plan to stop them before none of us can go to work or even leave our houses. NOW is the time. Let's all ban together and stop going to a gas station for a month or more and see what happens. Let's do it!!


I think we should ALL STOP going a specific gas station like Exxon across the country. If everyone just stopped going to one gas station eventually I think they would lower their prices to induce us to come back and maybe it will start a war of who has the "lower" price instead of who can "make the most money from all of us by raising their prices knowing we all need gas". It has gotten so out of control and won't get better until it gets worse and we need a plan to stop them before none of us can go to work or even leave our houses. NOW is the time. Let's all ban together and stop going to a gas station for a month or more and see what happens. Let's do it!!


I think we should ALL STOP going to a specific gas station like Exxon across the country. If everyone just stopped going to one gas station eventually I think they would lower their prices to induce us to come back and maybe it will start a war of who has the "lower" price instead of who can "make the most money from all of us by raising their prices knowing we all need gas". It has gotten so out of control and won't get better until it gets worse and we need a plan to stop them before none of us can go to work or even leave our houses. NOW is the time. Let's all ban together and stop going to a gas station for a month or more and see what happens. Let's do it!!


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