Tuesday, April 01, 2008

$3.29 / Gallon = $123 Billion Profit

Top executives of the five biggest U.S. oil companies were pressed Tuesday to explain the soaring fuel prices amid huge industry profits and why they weren’t investing more to develop renewable energy source such as wind and solar.

The executives, peppered with questions from skeptical lawmakers, said they understood that high energy costs are hurting consumers, but deflected blame, arguing that their profits — $123 billion last year — were in line with other industries...

With motorists paying a national average of $3.29 a gallon at the pump and global oil prices remaining above $100 a barrel, the executives were hard pressed by lawmakers to defend their profits.

“The anger level is rising significantly,” said Rep. Emanuel Cleaver, D-Mo., relating what he had heard in his district during the recent two-week congressional recess...

“Our earnings, though high in absolute terms, need to be viewed in the context of the scale and cyclical, long-term nature of our industry as well as the huge investment requirements,” said J.S. Simon, Exxon Mobil’s senior vice president...

“These companies are defending billions of federal subsidies ... while reaping over a hundred billion dollars in profits in just the last year alone,” complained Markey, chairman of the Select Committee on Energy Independence and Global Warming.

The House last year and again on Feb. 27 approved legislation that would have ended the tax breaks for the oil giants, while using the revenue to support wind, solar and other renewable fuels and incentives for energy conservation. The measure has not passed the Senate.

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