Oil chiefs say high prices not our fault

By H. JOSEF HEBERT, Associated Press Writer 1 minute ago

WASHINGTON - Don't blame us, oil industry chiefs told a skeptical
Congress. Top executives of the country's five biggest oil companies
said Tuesday they know record fuel prices are hurting people, but they
argued it's not their fault and their huge profits are in line with
other industries.
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Appearing before a House committee, the executives were pressed to
explain why they should continue to get billions of dollars in tax
breaks when they made $123 billion last year and motorists are paying
record gasoline prices at the pump.

"On April Fool's Day, the biggest joke of all is being played on
American families by Big Oil," Rep. Edward Markey, D-Mass., said,
aiming his remarks at the five executives sitting shoulder-to-shoulder
in a congressional hearing room.

"Our earnings, although 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, senior vice president of Exxon Mobil Corp., which made a record
$40 billion last year.

"We depend on high earnings during the up cycle to sustain ...
investment over the long term, including the down cycles," he
continued.

The up cycle has been going on too long, suggested Rep. Emanuel
Cleaver, D-Mo. "The anger level is rising significantly."

Alluding to the fact that Congress often doesn't rate very high in
opinion polls, Cleaver told the executives: "Your approval rating is
lower than ours, and that means you're down low."

Several lawmakers noted the rising price of gasoline at the pump, now
averaging $3.29 a gallon amid talk of $4 a gallon this summer.

"I heard what you are hearing. Americans are very worried about the
rising price of energy," said John Hofmeister, president of Shell Oil
Co., echoing remarks by the other four executives including
representatives of BP America Inc., Chevron Corp. and ConocoPhillips.

While Democrats hammered the executives for their profits and demanded
they do more to develop alternative energy sources such as wind, solar
and biofuels, Republican lawmakers called for opening more areas for
drilling to boost domestic production of oil and gas.

What would bring lower prices? asked Rep. James Sensenbrenner of
Wisconsin, the committee's ranking Republican

"We need access to all kinds of energy supply," replied Robert Malone,
chairman of BP America, adding that 85 percent of the country's
coastal waters are off limits to drilling.

But Markey wanted to know why the companies aren't investing more in
energy projects other than oil and gas -- or giving up some tax breaks
so the money could be directed to promote renewable fuels and
conservation and take pressure off oil and gas supplies.

"Why is Exxon Mobil resisting the renewable revolution," asked Markey,
noting that the other four companies together have invested $3.5
billion in solar, wind and biodiesel projects.

Exxon is spending $100 million on research into climate change at
Stanford University, replied Simon, but current alternative energy
technologies "just do not have an appreciable impact" in addressing
"the challenge we're trying to meet."

The appearance Tuesday before the Select Committee on Energy
Independence and Global Warming was not the first time that oil
executives had faced the harsh words of a lawmakers frustrated over
their inability to do anything about soaring oil and gasoline costs.

In November 2005, executives of the same companies sought to explain
high energy costs at a Senate hearing at which Hofmeister emphasized
the cyclical nature of his industry. "What goes up almost always comes
down," he told the senators on a day when oil cost $60 a barrel.

About six months later, the executives were grilled again on Capitol
Hill when a barrel of oil cost $75. As the three-hour House hearing
came to a close Tuesday, the price of oil settled at just over $100 a
barrel on the New York exchange.

"We face a new reality, volatility, high prices, greater competition
for resources," said Peter Robertson, vice president of Chevron Corp.,
adding that he understands that "Americans see the pain" of $100-a-
barrel oil.

Markey challenged the executives to pledge to invest 10 percent of
their profits to develop renewable energy and give up $18 billion in
tax breaks over 10 years so money could be funneled to support other
energy and conservation.

They responded that their companies already are spending on
alternative energy projects and argued that new taxes would dampen
investment and could lead to even higher prices.

"Imposing punitive taxes on American energy companies, which already
pay record taxes, will discourage the sustained investment needed to
continue safeguarding U.S. energy security," said Simon. He said over
the past five years Exxon Mobil's U.S. tax bill exceeded its U.S.
earnings by $19 billion.

Markey was not impressed.

"These companies are defending billions of federal subsidies ... while
reaping over a hundred billion dollars in profits in just the last
year alone," he said. The companies are reaping "a windfall of
revenue" while poor people have to choose between heating and eating
because of high energy prices.

Elsewhere on Tuesday, many independent truckers parked their rigs and
others slowed to a crawl on highways to protest high fuel prices. The
demonstrations were only scattered, but long lines of trucks were
moving at about 20 mph on the New Jersey Turnpike, and three drivers
were ticketed for impeding traffic on Interstate 55 outside Chicago,
driving three abreast at low speeds.