Teddy Roosevelt,whither art thou?

Oil Company Execs Defend Huge Profits

By H. JOSEF HEBERT, Associated Press Writer 1 hour, 25 minutes ago

WASHINGTON - The chiefs of five major oil companies defended the industry's huge profits Wednesday at a Senate hearing where they were exhorted to explain prices and assure customers they're not being gouged.
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There is a "growing suspicion that oil companies are taking unfair advantage," Sen. Pete Domenici (news, bio, voting record), R-N.M., said, opening the hearing in a packed committee room.

"The oil companies owe the American people an explanation," he declared.

Lee Raymond, chairman of Exxon Mobil Corp., said he recognizes that high gasoline prices "have put a strain on Americans' household budgets" but he defended his company's huge profits, saying petroleum earnings "go up and down" from year to year.

ExxonMobil, the worlds' largest privately owned oil company, earned nearly $10 billion in the third quarter. Raymond was joined at the witness table by the chief executives of Chevron, ConocoPhillips, BPAmerica and Shell Oil USA.

Together the companies earned more than $25 billion in profits in the July-September quarter as the price of crude oil hit $70 a barrel and gasoline surged to record levels after the disruptions of Hurricanes Katrina and Rita.

Raymond said the profits are in line with other industries when earnings are compared to the industry's enormous revenues.

But senators pressed Raymond to explain why in the aftermath of Hurricane Katrina some ExxonMobil gas station operators complained the company had raised the wholesale price of its gas by 24 cents a gallon in 24 hours. Is that not price gouging? they asked.

Raymond said he could not confirm the specific price increase, but that ExxonMobil had issued a directive in response to the storm disruptions "to minimize the increase in price while at the same time recognizing if we kept the price too low we would quickly run out (of fuel) at the service stations."

"It was a tough balancing act," said Raymond, who said it was not price gouging.

Democrats had wanted the executives to testify under oath, but Republicans rejected the idea. "If I were a witness I would demand to be put under oath," said Sen. Daniel Inouye (news, bio, voting record), D-Hawaii. The soaring prices have sent shivers through a Congress worried about political fallout.

Sen. Barbara Boxer (news, bio, voting record), D-Calif., made the issue personal, noting that the executives were reaping multimillion-dollar bonuses on top of multimillion-dollar salaries as "working people struggle" to pay for gasoline and face the specter of soaring home heating bills this winter. "Your sacrifice appears to be nothing," Boxer told the executives.

The head of the
National Association of Manufacturers, former Michigan Gov. John Engler, criticized lawmakers for the way they handled the hearing.

"Demagoguery and demonization will not reduce energy prices or solve supply problems in the long run," he said. "Our energy supply and infrastructure have suffered from 25 years of increasingly restrictive government policies that have made it almost impossible to access and refine the resources we have. The Senate should dispense with the theatrics and get serious about Americas energy supply."

The White House said that
President Bush, too, is concerned about energy prices.

"Energy prices have been too high and energy companies have realized significant increases in profits," said spokesman Scott McClellan. "It's important that the private sector be good corporate citizens and invest in the energy infrastructure and support those who are in need."

A number of Democrats, joined by a few Republicans, have called for a windfall profits tax on oil companies.

Domenici said he opposes such a move, saying "it didn't work before and probably won't work again." The government imposed taxes on oil company windfall profits in the 1970s, resulting in a drop in investment in oil development.

The executives hoped to dampen any further momentum for calls for taxing windfall oil company profits, something still viewed as a longshot but also no longer out of the question. Such a tax could inhibit investment in refineries or oil exploration and production, the industry argues.

James Mulva, chairman of ConocoPhillips, said "we are ready open our records" to dispute allegations of price gouging. ConocoPhillips earned $3.8 billion in the third quarter, an 89 percent increase over a year earlier. But he said that represents only a 7.7 percent profit margin for every dollar of sales. "We do not consider that a windfall," said Mulva.

Raymond cautioned against Congress imposing "punitive measures, hastily crafted" — an apparent reference to windfall profits taxes — and suggested that they would inhibit investment in domestic energy projects. Both Republicans and Democrats have urged the companies to use more of their profits to build refineries and other energy projects.

David O'Reilly, chairman of Chevron, attributed the high energy prices to tight supplies even before the Gulf hurricanes hit and said his company is "investing aggressively in the development of new energy supplies."

The oil executives said their companies spend tens of billions of dollars in investments.

Shell earned $9 billion in the third quarter, said John Hofmeister, president of Shell Oil Co., but he said over the last five years the company's investment in U.S. operations was equal to its income from U.S. sales.

The oil industry's record third-quarter profits — at a time when motorists were reeling from unprecedentedly high gasoline costs and warned of huge heating bills this winter — have caught the attention of both Republicans and Democrats in Congress. Some analysts predict the 29 largest oil companies will earn $96 billion this year.

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Dammit, don't those senators know we live in a free market economy? Those companies can charge whatever they want for their products and consumers are totally free to purchase at their price or not. Did these senators skip Capitalist Economics 101?

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1977 300d 70k--sold 08
1985 300TD 185k+
1984 307d 126k--sold 8/03
1985 409d 65k--sold 06
1984 300SD 315k--daughter's car
1979 300SD 122k--sold 2/11
1999 Fuso FG Expedition Camper
1993 GMC Sierra 6.5 TD 4x4
1982 Bluebird Wanderlodge CAT 3208--Sold 2/13

That, my wise and coherent confrere is precisely the problem.

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Ida Tarbell is rolling out of her grave. I feel like such a sucker for filling up at those prices. Should have pulled a John Denver.

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-Marty

1986 300E 220,000 miles+ transmission impossible
(Now waiting under a bridge in order to become one)

Reading your M103 duty cycle:
http://www.peachparts.com/shopforum/831799-post13.html
http://www.peachparts.com/shopforum/831807-post14.html

Crash your private plane?

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Proud owner of ....
1971 280SE W108
1979 300SD W116
1983 300D W123
1975 Ironhead Sportster chopper
1987 GMC 3/4 ton 4X4 Diesel
1989 Honda Civic (Heavily modified)
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Section 609 MVAC Certified
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"He who fights with monsters might take care lest he thereby become a monster. And if you gaze for long into an abyss, the abyss gazes also into you." - Friedrich Nietzsche

Horde gas.

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-Marty

1986 300E 220,000 miles+ transmission impossible
(Now waiting under a bridge in order to become one)

Reading your M103 duty cycle:
http://www.peachparts.com/shopforum/831799-post13.html
http://www.peachparts.com/shopforum/831807-post14.html

So is Eugene V.Debs,Norman Thomas,Big Bill Heywood,John Reed,Theodore Dreiser,Carlo Tresca and thousands of other socialists.

Few flames burn in the land of bloat and greed.

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There's nothing wrong with legal profits. It's good for the economy, it's good for business and good for the shareholders who risked their money in those companies. That being said, those sucessful companies should not be lining up for "corporate welfare" in the form of tax breaks, subsidies and "incentives" when they are seriously flush with cash.

Economic darwinism as opposed to "intelligent economics",eh?


The word "legal",sort of leaves me in doubt,though.................

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So the answer is to conficate the "excess" profits and allow the wise government to spend it.
How about when you sell your house, we have the government confiscate all profit in excess of the inflation rate as "excess"? You don't need that money.

Where does government stop its incesant appetite for money?

What is the 5 year rate of return on all the billions that the oil companies have invested?

They don't really control the price of oil, the cartel does.

Tax their excess profits, then you should rebate their excess losses.

If they tax the Oil companies excess profits, what next. Sell your house, make over 5% / give it to the gov ?????


DON'T GIVE OUR SENATE/CONGRESS MORE MORE, FOR EVERY $1 EXTRA THEY GET THEY SPEND $1.20, OF WHICH .4 IS WASTED. Probably .8, but I'm in a good mood today.


Ever notice the goverment NEVER talks about cutting back or conserving, for every hour they spend figuring out how to save money, they spend Days figuring out how to increase revenue.

Even Bush, "We don't need to conserve gas, we need to build more refineries" same mentality. And don't just blame Bush, I'm not supporting him, I'm not a fan either, but just lump all politicians into that pile PERIOD.

And in Fine Goverment form as ususal they are a day late and a dollar short, if they would have done things to increase production / conservation 5/10 years ago half this problem would not exist. Like blowing off CAFE standard increases, and making them tiny in the first place.

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KLK, MCSE

1990 500SL

I was always taught to respect my elders.
I don't have to respect too many people anymore.

If there were price controls and profit ceilings in effect there would not be any worry about "excess profits"and how to disburse them.

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If there was price-fixing or intentional manipulation of the market, as was the case in the California energy price frauds, then prosecute, convict and levy. But absent wrongdoing, why should there be "windfall taxes" levied against not just the company, but literally against the individual and institutional investors of the company? Drug and technology companies also get "windfall" profits, but have you seen the owners of Google getting called up to Congress?

UNFORTUNATELY NOT

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Well I can't stay out of this one. When I was drilling oil South Texas just 8 years ago I drilled for oil as low as $10.00 and gas for .80 a thousand. No one was there to hold my hand. The "Seven Sisters", now four I think and thatincludes Exxon/Mobile has always had the U. S. Military to hold theirs, now I an't saying they dont need it or should not have it, but the fact is they have it and I do not see anything wrong from placeing a "preminum" or a fee or a tax for the necessary additional military operations currently going on in the mid east to keep their stockholders in the game. We have much to lose but for sure they have more to lose. A 20% windfall profits tax on imported oil on a price above $35. is a well deserved tax if I ever heard.