Oil execs at Congress today: Defending tax breaks, explaining oil prices
Posted by: in Products and ServicesFiled under: International markets, Products and services, Management, Insiders, Industry, Law, Consumer experience, Exxon Mobil (XOM), Scandals, Chevron Corp (CVX), ConocoPhillips (COP), BP p.l.c. ADS (BP), Politics, Oil
U.S. lawmakers are going to get their chance this day to ask executives from five of the world’s largest oil companies what their take is on current gasoline prices.
Executives from the top three American oil companies — Exxon Mobil (NYSE: XOM), Chevron (NYSE: CVX) and ConocoPhillips (NYSE: COP) — will be present at today’s hearing, as well as executives from BP (NYSE: BP) and Royal Dutch Shell (NYSE: RDS.A). While the executives are predictably going to blame the current high gasoline prices on surging oil, it will still be interesting to see just how hard lawmakers hit the executives.
For the executives, it can’t be a good feeling to be walking into today’s hearing. The hearing is being called “Drilling for Answers: Oil Company Profits, Runaway Prices and the Pursuit of Alternatives.” The hearings will be chaired by Rep. Ed Markey of Massachusetts, who in the past has been a vocal critic of the oil industry.
While it is easy to point the finger at large oil when we get hit hard at the gasoline pumps, they do have some ground for defense this time with oil prices shooting up as high as they have over the past few years. Can you remember reading about $20 oil? I can, but just barely; then again, it was not all that long ago. We’ve become used to reading and hearing about $100 oil, but when you pause to remember, it was only in 2002 that oil prices were under the $20 mark. That’s a pretty rapid growth over just a small six-year period to rise to over $110 a barrel earlier this month.
Gasoline prices are not the only scheduled topic this day. The executives will discuss their positions on moving towards alternative fuel sources as well. Congress has been looking to reduce tax breaks on huge oil by $18 billion, which could then be used to explore alternative energy. But oil companies have naturally been very vocal in their opposition to such a move.
According to Markey, “These companies are defending billions in federal subsidies needed for renewable fuels and clean energy while reaping over a hundred billion dollars in profits in just the last year alone.” It is definitely going to be tough for large oil to dispute that claim. Consider that Exxon Mobil alone earned a record of $40.6 billion in 2007.
It should definitely prove to be an interesting day on Capitol Hill. I am not sure what exactly will come out of the hearings, but at least lawmakers will get their opportunity to grill the people that we all curse under our breath as we spend $50 or $60 to fill up our gas tanks.
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