Congress Grills Oil Execs on Pump Prices

By Reuters - Print this article Print

Executives from the largest oil companies in the U.S. went before Congress today to discuss rising gas prices at the pump.  

WASHINGTON (Reuters) - Five U.S. oil company executives appeared on Capitol Hill on Tuesday to explain why they were not to blame for record-high gasoline pump prices even as they reported $123 billion in profits in 2007.

U.S. average pump prices have risen steadily since the beginning of 2008 and on Monday hit a new record of $3.29 a gallon, heaping yet more pressure on a U.S. economy beleaguered by an imploding housing market and recession fears.

Rep. Ed Markey of Massachusetts, a long-time oil industry critic and chairman of the House Select Committee on Energy Independence and Global Warming, called the hearing entitled "Drilling for Answers: Oil Company Profits, Runaway Prices and the Pursuit of Alternatives."

Markey supports legislation that would strip about $18 billion in tax breaks from the five biggest U.S. oil companies and put them toward planet-friendly energy alternatives like wind and solar. Such legislation has passed the House of Representatives twice, but has stalled in the Senate.

"The American people deserve answers and it is time for Big Oil to go on the record about these record prices," Markey said.

Executives from Exxon Mobil Corp, Chevron Corp, ConocoPhillips, BP Plc and Royal Dutch Shell, said factors beyond their control had driven prices up -- mainly crude oil prices that have leapt over five-fold since 2002 to a record $111.80 a barrel last month.

"Given that the largest contributor to the cost of gasoline is crude oil, this has translated into record-high gasoline prices," Peter Robertson, vice chairman of Chevron, the second-biggest U.S. oil company behind Exxon, said in testimony.

Stephen Simon, senior vice president of Exxon Mobil, said punitive measures against U.S. oil companies would only strain supplies further.

"Imposing punitive taxes on American energy companies ... will discourage the sustained investments needed to continue safeguarding U.S. energy security," Simon said in testimony.

(Reporting by Chris Baltimore; editing by Jim Marshall)

This article was originally published on 2008-04-01
eWeek eWeek

Have the latest technology news and resources emailed to you everyday.