"Christmas in July" for big oil companies

Exxon spends more money on its Chief Executive Officer than it does on energy research, according to Senate Democratic Conference Vice Chairman Charles Schumer (D-N.Y.). Schumer said that he was not surprised with the profits oil companies are making but rather, he was surprised about how oil companies are spending their profits. According to Schumer, oil companies are using the profits to buy back their own stock and increase their share prices.

House Democratic Caucus Chairman Rahm Emanuel (D-Ill.) said that the government must stop subsidizing big oil companies and demand that the companies divert more resources into increased domestic production. Emanuel said that American taxpayers are spending billions of dollars for handouts to big oil companies and are also being forced to pay record prices at the pump. According to Emanuel, big oil companies are spending $180 billion on stock buy-backs but only spending $10 billion on research and development.

House Select Committee on Energy Independence and Global Warming Chairman Ed Markey (D-Mass.) said that BP now stands for Bloated Profits. Markey also doled out statistics regarding big oil companies' profits. According to Markey, big oil companies made $40.6 billion profits in 2007 and spent $32 billion on stock buy-backs. Markey emphasized that big oil companies had only spent $10 million on renewable energy.

Protesting profits

Demonstrators on Capitol Hill protest profits of oil companies and call for investment in renewable energy on a day where gas prices have reached a national average of $3.29 per gallon.

Congress grills oil executives over profits, subsidies, and global warming

Members of the House Select Energy Independence and Global Warming Committee held a hearing called “Drilling for Answers: Oil Company Profits, Runaway Prices and the Pursuit of Alternatives” with five representatives from top oil companies including Chevron, Exxon, Shell, BP America, and ConocoPhillips.

Chairman Markey opened the hearing with an acknowledgment that the national gas price reached a record high of $3.29 yesterday, and said that Americans are hoping to be told on April Fools’ Day that skyrocketing prices are a massive hoax. He said that the poorest 20 percent of Americans are now spending approximately 10 percent of their income on gas, while oil company profits have nearly quadrupled. Markey said he hoped the oil companies would explain this disparity and divulge plans to invest these massive profits in research for renewable energy, and claimed that Americans “shouldn’t have to break the bank to fill the tank.”

Congressional representatives expressed personal and constituent dissatisfaction with the current oil situation. Rep. John Shadegg (R-AZ) said that US oil dependency forces America to rely on nations who are not its allies. Rep. Candice Miller (R-MI) said that the oil companies should expect to see a major backlash from Congress, shareholders, and the American people as a result of big oil executives profiting instead of investing in clean energy alternatives. Rep. Emanuel Cleaver (D-MO) said that his constituents are losing jobs because they can no longer afford to drive to them. Rep. Blackburn (R-TN) emphasized that America does have the capacity to be energy independent, but questioned if it has the will to take steps towards implementation.

The oil company executives expressed a need for fewer restrictions against domestic drilling, and highlighted other factors independent of oil companies that contribute to rise in oil prices. John Hofmeister, President of Shell Oil, claimed that price increases are not controlled by oil companies but rather result from relentlessly rising demand, obstructions to accessing domestic oil, shortened capacity, and other external factors.

Peter Robertson, Vice Chairman for Chevron Corporation, called on Congress to “help to open up the 85 percent of the Outer Continental Shelf that is off limits” and claimed that America cannot “expect other countries to expand their resource developments to meet our needs as we limit our development without good reason.”

John Lowe, Executive Vice President of ConocoPhillips, said that America needs to continue to develop all kinds of energy and cannot expect alternate energy to replace fossil fuel in a few short decades. He speculated that based on the current situation, fossil fuels must still supply two-thirds of American energy in 2030. Lowe also expressed a need for utilization of domestic fossil fuel reserves, and suggested that there is huge potential for drilling in Canada. As for development of alternate energy, Lowe said that ConocoPhillips is the largest blender of ethanol fuel and has formed a relationship with Tyson foods to create fuel out of animal fat products.

Robert Malone, Chairman and President of BP America, said that the United States will consume more oil in 2030 than it does today. He emphasized that taxing one form of energy to increase research for another will be harmful to production and the economy.