The hearing focused on one key question: Why should the oil companies continue to receive substantial tax breaks from the Federal government and make so much money? According to MSNBC, the domestic oil industry made $123 billion last year. ExxonMobil alone made a record $40 billion in the last 12 months. However, the oil companies countered that they already pay enough in taxes. ExxonMobil Senior Vice President J.S. Simon claimed that over the last five years his company’s taxes had exceeded its U.S. earnings by $19 billion.
At times, the tone of the hearing grew contentious. Rep. Edward Markey (D-Massachusetts) commented on the appropriateness of the date. “On April Fool’s Day, the biggest joke of all is being played on American families by Big Oil.” He continued to deride the oil companies: “These companies are defending billions of federal subsidies ... while reaping over a hundred billion dollars in profits in just the last year alone.”
Another member of the house, Emanuel Cleaver (D-Missouri) commented to them on the growing public hatred of the oil companies. “Your approval rating is lower than ours, and that means you’re down low,” he said. Cleaver noted that on a recent trip back to his home state during the Congressional recess he had seen that people were beginning to get desperate. He warned the executives that “the anger level is rising significantly.”
The executives acknowledged that prices were high but responded by saying they had no choice but to charge more for oil. Simon claimed, “We depend on high earnings during the up cycle to sustain ... investment over the long-term, including the down cycles.”
Congress also questioned the executives about why their companies were not investing more in renewable energy sources, such as solar, wind or biofuel. ExxonMobil was questioned the most on this issue. Simon responded by claiming that the company had spent more than $100 million on the renewable energy programs at Stanford University. However, Rep. Markey pointed out that between the four of them, the other companies had invested more than $3.5 billion in renewable energy sources.
The oil executives were quick to point the finger of blame away from them and back at the Federal government. Robert Malone, Chairman of BP America, complained that 85 percent of U.S. coastal waters are off-limits to oil drilling. “We need access to all kinds of energy supply,” he said.
So is a change coming? No, probably not, MSNBC points out that Congress has hauled in the executives for questioning several times over the last few years. In 2005, they claimed that oil prices were bound to drop soon – when oil was $60 a barrel. The executives were questioned again six months later when the price of oil had jumped to $75 a barrel. On both occasions, while Congress threatened to punish the oil companies, nothing was done.
Rep. Markey ended the hearing by challenging the oil companies to give up subsidies and to invest in renewable energy. The executives quickly rejected the calls to give up Federal subsidies. They claimed they already pay a record amount in taxes and said that it would prevent them from investing in technology that would lower the price of fuels. With the price of fuel continuing to rise and with no relief in sight, it seems the painful experience at the pump will continue for the foreseeable future.
