Oil Company Executives Defend Profits

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  • Hardrock69
    DIAMOND STATUS
    • Feb 2005
    • 21834

    Oil Company Executives Defend Profits





    By H. JOSEF HEBERT, Associated Press Writer 1 hour, 3 minutes ago

    WASHINGTON - The chiefs of five major oil companies defended the industry's huge profits Wednesday at a Senate hearing where lawmakers said they should explain prices and assure people they're not being gouged.

    There is a "growing suspicion that oil companies are taking unfair advantage," Sen. Pete Domenici (news, bio, voting record), R-N.M., said as the hearing opened in a packed Senate committee room.

    "The oil companies owe the country an explanation," he said.

    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 companies 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 profits are compared to the industry's enormous revenues.

    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.

    The White House said
    President Bush was 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 opposed 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 Mulla, 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.

    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 $B!=(B at a time when motorists were reeling from unprecedentedly high gasoline costs and warned of huge heating bills this winter $B!=(B 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.

    "Consumers need relief from high energy prices," Sen. Byron Dorgan (news, bio, voting record), D-N.D., said, reiterating his call for a windfall profits tax on oil companies. "Talk is cheap. The price of energy is not. Congress needs to act."

    By most accounts, the hearing Wednesday was to have much rhetoric and result in little action.

    Lawmakers, especially on the Republican side, "need some cover in the face of record-breaking profits," said Christine Tezak, an energy analyst for Stanford Washington Research Group. "Expect a lot of criticism ... but there is far more rhetoric than votes in support of windfall profits taxes."

    The industry argues that the run-up of gasoline prices, which began earlier in the year, stems from high global crude oil costs and growing demand for gasoline this past summer, followed by a disruption of gasoline supplies when the hurricanes shut down more than a dozen refineries on the Gulf Coast.

    Prices since have retreated from more than $3 a gallon to an average nationwide last week of $2.37, according to the Energy Department.

    While the loudest calls for action against oil companies have come from Democrats, some Republicans have expressed similar frustrations.

    "They are unhappy with the behavior of the oil companies," said Republican pollster David Winston, who advises GOP congressional leaders. "These are free market guys. They believe the market works. But in this case they are concerned that the consumer was clearly taken advantage of ... and they're pretty angry about it."
  • ELVIS
    Banned
    • Dec 2003
    • 44120

    #2
    Originally posted by Hardrock69

    The industry argues that the run-up of gasoline prices, which began earlier in the year, stems from high global crude oil costs and growing demand for gasoline this past summer, followed by a disruption of gasoline supplies when the hurricanes shut down more than a dozen refineries on the Gulf Coast.


    That's true...

    let's see...

    The oil industry profit is about nine cents per gallon...

    Federal tax is about fourty nine cents per gallon...


    Hmmm...


    Comment

    • FORD
      ROTH ARMY MODERATOR

      • Jan 2004
      • 58754

      #3
      Originally posted by ELVIS
      That's true...

      let's see...

      The oil industry profit is about nine cents per gallon...

      Federal tax is about fourty nine cents per gallon...


      Hmmm...


      Yeah right.... these assholes are pocketing RECORD PROFITS every month on nine cents a gallon. Where the HELL did you get that number?
      Eat Us And Smile

      Cenk For America 2024!!

      Justice Democrats


      "If the American people had ever known the truth about what we (the BCE) have done to this nation, we would be chased down in the streets and lynched." - Poppy Bush, 1992

      Comment

      • ELVIS
        Banned
        • Dec 2003
        • 44120

        #4
        Several places...

        Here is one...


        An industry-wide study in the late 1990s showed that oil industry profits amounted to an estimated 7.3 cents on each gallon sold.1 More recently, ConocoPhillips reported that during the third quarter of 2005 earnings from its U.S. refining and marketing operations amounted to 9 cents per gallon, out of industry average retail price of $2.60 per gallon during the quarter.


        Comment

        • Nickdfresh
          SUPER MODERATOR

          • Oct 2004
          • 49125

          #5
          Originally posted by ELVIS
          Several places...

          Here is one...


          An industry-wide study in the late 1990s showed that oil industry profits amounted to an estimated 7.3 cents on each gallon sold.1 More recently, ConocoPhillips reported that during the third quarter of 2005 earnings from its U.S. refining and marketing operations amounted to 9 cents per gallon, out of industry average retail price of $2.60 per gallon during the quarter.


          Ohhhh, is that what Conoco-Philips said? I suppose they said they weren't cooking the books either?

          Comment

          • ELVIS
            Banned
            • Dec 2003
            • 44120

            #6
            It's all a conspiracy...

            Comment

            • Nickdfresh
              SUPER MODERATOR

              • Oct 2004
              • 49125

              #7
              Originally posted by ELVIS
              It's all a conspiracy...
              Oh no ELVIS, major multi-national corporations NEVER use accountants to cook their books or to find favorable tax shelters....

              Yeah, let's put on a tin-foil beanie over that (sucker).

              Comment

              • ELVIS
                Banned
                • Dec 2003
                • 44120

                #8
                Ok, you show me how oil profits work...

                That's not the only source I researched...

                Today in 2005, oil companies make roughly nine cents per gallon of gasoline sold...

                Prove me wrong...

                Comment

                • Warham
                  DIAMOND STATUS
                  • Mar 2004
                  • 14587

                  #9
                  He can't.

                  I heard the same information on the radio.

                  When somebody insists that oil companies are making record profits, what it usually means is that they went from making 9 cents a gallon to more like 14 cents a gallon. That would be a 50% increase in profits. It sounds outrageous, huh?

                  Comment

                  • ODShowtime
                    ROCKSTAR

                    • Jun 2004
                    • 5812

                    #10
                    The arbitrary amount of 9 cents a gallon means nothing. They obviously control the world
                    gnaw on it

                    Comment

                    • Warham
                      DIAMOND STATUS
                      • Mar 2004
                      • 14587

                      #11
                      Actually, Congress controls them.

                      If you really want to know who's responsible for high gas prices, look no further than your Representative to the House.

                      Comment

                      • Hardrock69
                        DIAMOND STATUS
                        • Feb 2005
                        • 21834

                        #12
                        Who is receiving major campaign contributions from Big Oil.

                        Who int eh fuck do you think has been controlling the world for the past century?

                        It REALLY became obvious by the late 40s when LBJ BLATANTLY stole a Senate seat in an election fraud, and it only got more obvious as time went on.

                        Comment

                        • ELVIS
                          Banned
                          • Dec 2003
                          • 44120

                          #13
                          Notice the lack of interest from the conspiracy freaks when facts are involved...

                          No, I don't believe the biggest industry in the world is "cooking the books" when all eyes are on them...

                          Like Warpig indicated, it's congress, along with frederal and state government who are responsible for the high gas prices...


                          Comment

                          • Hardrock69
                            DIAMOND STATUS
                            • Feb 2005
                            • 21834

                            #14
                            The Oil industry does not HAVE to cook the books.

                            They are making so much money that if they need some kinda loophole to avoid paying corporate taxes, they just buy Tom DeLay or somebody to fix it for them.

                            They can throw some money at his campaign, and make millions down the road.

                            Comment

                            • ELVIS
                              Banned
                              • Dec 2003
                              • 44120

                              #15
                              Shame on the oil companies for making nine cents per gallon...

                              Comment

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