The Select Committee on Energy Independence and Global Warming of the U.S. House of Representatives was holding a hearing, "Drilling for Answers on Oil and Gas Prices, Profits, and Alternatives." According to the web site of Nanci Pelosi, Speaker of the House, top-level executives from the five largest oil companies were to discuss "the current state of oil and gas prices, oil company profits, and the need for clean, renewable fuels to ease demand for oil and cut global warming pollution. "
"On April Fool's Day, the biggest joke of all is being played on American families by Big Oil," said Rep. Edward Markey, D-Mass., as his committee began hearing from the oil company executives.
Those executives told the members of Congress that their profits are not extreme and their companies are not to blame for the high price of fuel.
Even though critics point out that ExxonMobil reported record profits of $40.6 billion in 2007, J.S. Simon, ExxonMobil's senior vice president, said that was only 8.3 cents per dollar of sales, only a little higher than the Dow Jones Industrial Average for major industries. "Our earnings … need to be viewed in the context of the scale and cyclical, long-term nature of our indsutry as well as the huge investment requirements."
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 measures.
"These companies are defending billions of federal subsidies … while reaping over a hundred billion dollars in profits in just the last year alone," Markey said.
The House recently passed the Renewable Energy and Energy Conservation Tax Act of 2008, which promises to "end unnecessary subsidies to Big Oil companies and invest in clean, renewable energy and energy efficiency. It will extend and expand tax incentives for renewable electricity, energy and fuel, as well as for plug-in hybrid cars, and energy efficient homes, buildings, and appliances," according to the Pelosi web site, The Gavel.
The oil industry, however, has argued that the tax breaks are needed to assure continued investment in exploration, production and refinery expansions. President Bush has promised to veto any such bill.