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Oil executives defend profits to congress Original Source Link: (May no longer be active)
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Oil execs should detail plans to Congress: Bodman
Reuters
WASHINGTON - The top executives of Exxon Mobil and four other major oil companies should detail how they are investing record profits when they testify at a Senate hearing this week, U.S. Energy Secretary Sam Bodman said on Monday.
"I hope the CEOs of the energy companies use that (hearing) as an opportunity to make their case, tell the story of just what it is they are planning on reinvesting in this sector," Bodman said in an interview on CNBC television.
"Our goal here is to call for reinvestment of the funds in productive resources," Bodman said. He reiterated the administration's opposition to a windfall profits tax and proposals that oil companies donate 10 percent of their profits to fund winter heating expenses for low-income Americans.
Lawmakers from both political parties have expressed growing unease about soaring oil company profits and forecasts for record-high winter heating bills for Americans.
The Senate energy and commerce committees will hold a joint hearing Wednesday to hear testimony from Exxon Chief Executive Lee Raymond, BP America Chief Executive Ross Pillari, Royal Dutch Shell's Shell Oil Co. President John Hofmeister, ConocoPhillips Chief Executive Jim Mulva, and Chevron Chief Executive David O'Reilly.
Together, the five companies reported third-quarter profits of more than $30 billion due to high energy prices.
Bodman also repeated that Bush administration opposes a windfall profit tax on oil, endorsed by many Democrats and a growing number of Republicans in recent days.
"There's no way that we would support a windfall profits tax," Bodman said. Such a tax existed in the 1980s and "it proved to be totally ineffective," he said.
Bodman also dismissed a call last week by Republican Charles Grassley, chairman of the Senate Finance Committee, for major oil companies to donate 10 percent of their earnings to help poor Americans pay record-high heating bills this winter.
Democrats in the Senate made a similar proposal to fund the Low Income Home Energy Assistance Program (LIHEAP) last month. The program spent $2.2 billion, and Democrats say funding should be doubled for the coming winter because of forecasts of record-high prices for heating oil and natural gas.
"We're all for charitable giving," Bodman said, but "when it comes to a stipulated amount that is where I have difficulty."
Instead, Bodman said the administration's proper role should be to "encourage the oil companies to invest their significant profits back into the refining sector -- that's what we're very eager to see."
Also testifying on Wednesday will be the chairman of the U.S. Federal Trade Commission and several state attorneys general.
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