The big five oil companies were grilled at a Congressional hearing about their record profits yesterday. Their apparent crime? Making too much money.
Congressional Democrats do not think that oil companies, especially the world's biggest private oil company Exxon Mobil, are investing enough money in renewable fuels. So Rep. Ed Markey (D-Mass.), chairman of the Select Committee on Energy Independence and Global Warming, urged the oil companies to spend ten percent of their profits on developing renewable energy supplies.
As the Houston Chronicle notes:
House Democrats had telegraphed the kind of reception the executives could anticipate with the hearing's title — "Drilling for Answers: Oil Company Profits, Runaway Prices and the Pursuit of Alternatives."
And the hearing lived up to expectations in what proved to be an often-testy exchange.
Markey quickly went after Exxon Mobil, asking why a company that earned more than $40 billion last year — the most ever earned by a U.S. company — has plans to invest only $100 million over 10 years in renewables and alternative energy programs.
Simon said company officials examined a range of alternative energy sources a number of years ago and were unsatisfied with their potential.
Instead, Simon said, company officials want to focus on leapfrogging current technologies and find a breakthrough for the world's energy concerns.
"The current technology does not have any appreciable impact on this challenge," Simon said.
Democrats pointed to the commitments BP and Shell have been making in alternative energy sources.
Markey wants them to do more, though, and invest at least 10 percent of their profits in renewables and alternative energy sources.
But early Tuesday, at Washington's Center for Strategic and International Studies, Jeroen van der Veer, chief executive officer of Netherlands-based Royal Dutch Shell, warned against sinking too much cash on alternatives such as biofuels if they cannot be competitive in the marketplace.
"There is no point to spend billions of dollars on a technology that is too expensive for consumers," van der Veer said.
Mr. Markey also used the occasion to threaten special tax increases, grilling the executives about $18 billion in "subsidies," which are actually a tax deduction that Congress itself extended to all manufacturers, including Big Oil
Interestingly, the Journal also notes that higher gasoline prices is exactly what would happen if Congress enacts proposed global warming policies.
Finally, if Congress wants to blame someone for high oil prices, blame the benighted oil producing countries that have underinvested in oil production for at least a decade. But Congressional grandstanders can't haul the likes of Venezuela's Chavez, Russia's Putin, and Iran's Ahmadinejad to their hearing rooms.
The whole Houston Chronicle article here.
Disclosure: Yes, I'm in thrall to Big Oil to the extent that I still own those 50 shares of Exxon Mobil. And I should also mention that I have this silly belief that the chief business of business is to make profits for shareholders by satisfying the legitimate needs of their customers, not bowing and scraping to the whims of Congresspeople