Oil execs defend huge profits before Senate

Oil execs defend huge profits before Senate - Oil & energy - MSNBC.com

 

WASHINGTON - Top executives of the five largest oil companies tried to shift anger over high prices to a debate over supplies Wednesday, leading a senator to accuse them of acting like “hapless victims†while racking up record profits.

 

Patrick Leahy, D-Vt., told the executives there’s “a disconnect†between normal supply and demand and the skyrocketing price of oil — surpassing $130 a barrel even as the oil leaders testified — that the industry has yet to explain.

 

J. Stephen Simon, executive vice president of Exxon Mobil Corp., said profits have been huge “in absolute terms†but must be viewed in the context of the massive scale of the industry.†He also said high earnings are needed “in the current up cycle†to pay for investments in the long term when profits will be down.

 

“’Current up cycle,’ that’s a nice term,†replied Leahy with sarcasm, “when people can’t afford to go to work†because gasoline is costing close to $4 a gallon.

 

He asked Simon what his total compensation was at Exxon, a company that made $40 billion last year. Simon replied it was $12.5 million annually.

 

Two other executives, John Lowe, executive vice president of ConocoPhillips Co., said he didn’t recall his total compensations as did Peter Robertson, vice chairman of Chevron Corp. John Hofmeister, president of Shell Oil Co., 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 compensation at “in excess of $2 million.â€

 

Sen. Arlen Specter, R-Pa., said Exxon’s annual profits increased from $11.5 billion to $40.6 billion in the past five years and there was no explanation for “why profits have gone up so high when the consumer is suffering so much.â€

 

The five companies earned $36 billion in the first quarter of this year.

 

The executives, appearing under oath before the Senate Judiciary Committee, said they know high prices are hurting people, but they said the cause is not company profits but global supply and demand. And they sought to use their appearance before Congress to argue against new taxes on their industry

 

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

 

Senate Democrats recently announced an energy package that would tax “windfall†profits of the five companies. That might have public appeal, Lowe told the senators, but oil companies should not be viewed as “a scapegoat†for high prices.

 

That 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.â€

 

“I’m sorry to sound like a victim. I don’t feel like a victim at all,†replied Robertson of Chevron, saying that he was proud of his company’s investments in future supply.

 

Sen. Richard Durbin, D-Ill, accused the corporate executives of ignoring the plight of people suffering because of high energy prices. “Where is your corporate conscience?†he asked them.

 

“The issue is simple,†said Leahy. “People we represent are hurting, the companies you represent are profiting.â€

Thank you for posting this Rachel.

I hope senate gives them enough hell so we can see the prices begin to decline. I seriously doubt it though.

I might be dense here...but it seems like every time this conversation is had, it goes the same way. "It's not our fault prices are so high, we can't help it if our profits are so large...." Doesn't it seem obvious? Cut your profit margin & pass the savings on to the consumer?? I know there is a supply/demand side to this...we as a nation have chosen not to compromise our protected regions by drilling for oil. I suppose we, by default ,accept the consequence of paying higher prices because we must source outside of our own country. Any one have any thoughts??

On a side note I LOVE Leahy! He knows how to fight for what is right...and he is a Vermonter!!!!

But you would think that these execs would be vested in improving the American economy. I mean, I know these companies are BUSINESSES but geez- help the people out that freaking help make your billions. I hope they sleep well at night. But then again, what do we expect when many of our larger American corporations out source their jobs.

Personally I would like us to invest in making an alternative fuel. It would be so nice to cut the Middle East completely out. You know, I just read an article that by 2010 Nissan will begin rolling out electric cars but many fear that if Americans went this route we would strain our electricity grid and causing black outs. So whattagonnado?

What if gas cost $10 a gallon? - MSN Money

at least this is something important and not about stupid professional sports, I get so frustrated why our tax dollars are being spent on pro sports investigations.

As far as gas prices I don't think this will make a difference but its good that the companies are being put on the spot.