Big Oil Defends Profits Before Irate Senators

[Etta Place]

Big Oil defends profits before irate senators
By H. JOSEF HEBERT, Associated Press Writer
Wed May 21, 9:08 PM ET



On a day oil prices leaped to unheard-of highs, senators lined up Big Oil's biggest executives and pummeled them with complaints that they're pretending to be "hapless victims" while raking in record profits.

"Where is the corporate conscience?" Sen. Dick Durbin, D-Ill., asked the top executives of the five largest U.S. oil companies.

It's all about economics, came the reply. Supply and demand. The company leaders tried to shift attention from motorists' anger over $4-a-gallon gasoline to a debate over new areas for drilling.

But senators at the Judiciary Committee hearing weren't having any of that. They wanted to press the executives about public anguish over paying $60 or more to fill up a car's gas tank.

"People we represent are hurting, the companies you represent are profiting," Sen. Patrick Leahy, D-Vt., told the executives. He said there's a "disconnect" between legitimate supply issues and the oil and gasoline prices motorists are seeing.

The executives, sitting shoulder to shoulder in the hearing room, said they understood people were hurting, but they tried to blunt the emotion with economic analysis.

Profits have been huge "in absolute terms," conceded J. Stephen Simon, executive vice president of Exxon Mobil Corp., but they "must be viewed in the context of the massive scale of our industry." And high earnings "in the current up cycle" are needed for investments in the long term, including when profits will be down.

"'Current up cycle,' that's a nice term when people can't afford to go to work" because gasoline is costing so much, replied Leahy with sarcasm.

"The fundamental laws of supply and demand are at work," said John Hofmeister, chairman of Shell Oil Co., acknowledging it is something the oil industry has been saying for some time and that the explanation may sound "repetitive and uninteresting."

Hofmeister was joined by executives of Exxon Mobil Corp., Chevron Corp., BP America Inc. and ConocoPhilips Co. Together the five companies earned $36 billion during the first three months of this year.

As the executives sought to explain their profits and why prices are so high, the global oil markets were moving into new, uncharted highs, touching $133 a barrel for the first time. The national average price of a gallon of gasoline hit $3.80, with $4 showing up in more places. Crude prices increased even more in late electronic trading Wednesday hitting $134 for the first time.

It was the second time this year the executives had been summoned to testify before Congress. When they came in early April oil cost about $98 a barrel.

This time the exchanges got personal.

Simon was asked what his total compensation was at Exxon, a company that made $40.6 billion last year. Simon replied it was $12.5 million.

John Lowe, executive vice president of ConocoPhillips Co., said he didn't recall his total compensations. So did Peter Robertson, vice chairman of Chevron Corp. Hofmeister said his was "about $2.2 million" but was not among the top five salaries at his company's international parent. Robert Malone, chairman of BP America Inc., put his "in excess of $2 million."

Sen. Arlen Specter, R-Pa., noting that Exxon's profits had nearly quadrupled from $11.5 billion in 2002, said he had heard nothing from the oilmen that would explain "why profits have gone up so high when the consumer is suffering so much."

The executives, appearing under oath, cited tight global supplies with scant spare production capacity and the fact that large areas of land and offshore waters remain offlimits to drilling. And they said they're worried Congress was talking of requiring the five companies to pay more taxes.

"I urge you to resist these punitive policies," said Hofmeister.

It was not what many senators wanted to hear.

You have "just a litany of complaints that you're all just hapless victims of a system," Sen. Dianne Feinstein, D-Calif., told the executives. "Yet you rack up record profits ... quarter after quarter after quarter."

One senator after another cited the pain that high energy prices are causing farmers, small businesses and people trying to find a way to afford a vacation trip this summer.

"Is there anybody here that has any concerns about what you're doing to this country with the prices that you're charging and the profits that you're taking?" Durbin asked.

The titans of America's oil industry sat quietly for a moment.

"Senator," replied Exxon's Simon, "We have a lot of concern about that. And we're doing all we can to put downward pressure on prices."

Big Oil defends profits before irate senators - Yahoo! News


These oil guys sound like a bunch of lame-os when trying to defend their profits, but sure aren't lame when it comes to making huge salaries.

[afmo]

"Senator," replied Exxon's Simon, "We have a lot of concern about that. And we're doing all we can to put downward pressure on prices."

just as long as they can still make 17billion a quarter....

[XDConvert9mm]

Originally Posted by Etta Place

Big Oil defends profits before irate senators - Yahoo! News


These oil guys sound like a bunch of lame-os when trying to defend their profits, but sure aren't lame when it comes to making huge salaries.

Al Gore makes more than they do. So, he's much worse, right?

These guys keep telling Congress the same things every time they're called up because it is accurate. Our energy policy, such as it exists, sucks and Congress and the Executive branch past and present are to blame for this mess. I watched this today on CNBC and it was nothing but a CYA, pose for the camera fest from people like Durbin and the rest during an election year.

We have the Oil right here on our own shores. Free them up to go get it. Give an ironclad guarantee that new refineries will not be held up by lawsuits and injunctions and they will be built. Get rid of this freaking disaster of an Ethanol program. Give much greater tax incentives for Wind, Solar and other alternative energy sources (currently, I believe, in limbo).

It gets awfully old watching the same Capitol Hill blowhards ask the same uninformed, inflammatory questions to these guys for the cameras when the credit for current conditions goes right back to the career Hill hacks.

[Etta Place]

Originally Posted by XDConvert9mm

Al Gore makes more than they do. So, he's much worse, right?

These guys keep telling Congress the same things every time they're called up because it is accurate. Our energy policy, such as it exists, sucks and Congress and the Executive branch past and present are to blame for this mess. I watched this today on CNBC and it was nothing but a CYA, pose for the camera fest from people like Durbin and the rest during an election year.

We have the Oil right here on our own shores. Free them up to go get it. Give an ironclad guarantee that new refineries will not be held up by lawsuits and injunctions and they will be built. Get rid of this freaking disaster of an Ethanol program. Give much greater tax incentives for Wind, Solar and other alternative energy sources (currently, I believe, in limbo).

It gets awfully old watching the same Capitol Hill blowhards ask the same uninformed, inflammatory questions to these guys for the cameras when the credit for current conditions goes right back to the career Hill hacks.

Al Gore makes $12.5 million a year?

[XDConvert9mm]

Originally Posted by Etta Place

Al Gore makes $12.5 million a year?

One executive makes that. Hasn't ole Al gone from 1 million net worth to about 100 million plus in 8 years? Doesn't that roughly equal $12.5M/year?

And, hows about the rest of the post Etta?

[KEVWYO]

Originally Posted by afmo

"Senator," replied Exxon's Simon, "We have a lot of concern about that. And we're doing all we can to put downward pressure on prices."

They aren't doing jack crap. Who are they trying to kid.

[KEVWYO]

Originally Posted by XDConvert9mm

Al Gore makes more than they do. So, he's much worse, right?

These guys keep telling Congress the same things every time they're called up because it is accurate. Our energy policy, such as it exists, sucks and Congress and the Executive branch past and present are to blame for this mess. I watched this today on CNBC and it was nothing but a CYA, pose for the camera fest from people like Durbin and the rest during an election year.

We have the Oil right here on our own shores. Free them up to go get it. Give an ironclad guarantee that new refineries will not be held up by lawsuits and injunctions and they will be built. Get rid of this freaking disaster of an Ethanol program. Give much greater tax incentives for Wind, Solar and other alternative energy sources (currently, I believe, in limbo).

It gets awfully old watching the same Capitol Hill blowhards ask the same uninformed, inflammatory questions to these guys for the cameras when the credit for current conditions goes right back to the career Hill hacks.

Seems the enviromental lobby has the country by the nuts. Seems there could be a balance between being as enviromentally friendly as is reasonably possible and still finding ways to become at least a little more less dependent on foreign oil.

While I want clean air, water, food, etc there has to be a balance. Seems the enviromentalists don't care. Any new exploration, any new refineries, and new oil platforms will be immediately tied up in court. Big oil is making big profits because they don't want to waste them in the court room. I can't blame them to be honest.

[XDConvert9mm]

Originally Posted by KEVWYO

They aren't doing jack crap. Who are they trying to kid.

How do you back that up Kev? If they could get their hands on more Oil cheaply and put out more gas a little less expensively right now don't you think they would do it?

[KEVWYO]

Originally Posted by XDConvert9mm

How do you back that up Kev? If they could get their hands on more Oil cheaply and put out more gas a little less expensively right now don't you think they would do it?

Let me answer that with a question: what is big oil doing to find cheaper oil? Some of my answer is in my second post.

[XDConvert9mm]

Originally Posted by KEVWYO

Let me answer that with a question: what is big oil doing to find cheaper oil? Some of my answer is in my second post.

See my first post. Everyone knows where the cheaper Oil is in this country. Oil shales area, ANWR, Gulf, both Coasts offshore, etc. They have been regulated out of drilling for it. Right?

Edit: I think I was responding to your first post while you were responding to mine. Who's on first?