Appearing before a House committee, the 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.Clever and substantive. Or not.
"On April Fool's Day, the biggest joke of all is being played on American families by Big Oil," Rep. Edward Markey, D-Mass., said, aiming his remarks at the five executives sitting shoulder-to-shoulder in a congressional hearing room.
What would bring lower prices? asked Rep. James Sensenbrenner of Wisconsin, the committee's ranking RepublicanOK. Let's see, OIL companies deal in OIL and make their profits from OIL, so they invest primarily in OIL technologies. I suppose Markey wasn't informed that these were OIL executives that he was going to lecture on how to run a successful business while handing out their product for free. I'd also conjecture that their investments in alternative energy has a fairly low return compared to, oh say, OIL.
"We need access to all kinds of energy supply," replied Robert Malone, chairman of BP America, adding that 85 percent 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.
"We face a new reality, volatility, high prices, greater competition for resources," said Peter Robertson, vice president of Chevron Corp., adding that he understands that "Americans see the pain" of $100-a-barrel oil.I always enjoy discussions of raising taxes on a highly profitable industry. Not that those taxes in the end aren't passed on to those that buy the product. But demanding that they invest in alternative energy isn't going to get you anywhere.
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.
They responded that their companies already are spending on alternative energy projects and argued that new taxes would dampen investment and could lead to even higher prices.
"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," said Simon. He said over the past five years Exxon Mobil's U.S. tax bill exceeded its U.S. earnings by $19 billion.
Markey was not impressed.
"These companies are defending billions of federal subsidies ... while reaping over a hundred billion dollars in profits in just the last year alone," he said. The companies are reaping "a windfall of revenue" while poor people have to choose between heating and eating because of high energy prices.
He did make one point there surprisingly. Oil subsidies with record profits just doesn't make any sense at all. Increasing their taxes just to hand that money back to them is silly. Even worse is taking my taxes and giving to the oilers to stabilize their profits is insulting.