Facing members of Congress unhappy about the soaring price of petroleum, executives from five giant oil companies today sought to portray themselves as part of the energy solution and not the energy problem.
But lawmakers seeking a way to deal with rising concern among motorists took aim at the oil companies and the record profits they registered last year amid record oil prices.
"I believe the laws of supply and demand when it comes to oil and gas are broken and completely malfunctioning," said Rep. John B. Larson (D-Conn.).
"Your approval ratings are down lower than ours and that means you are down low," said Rep. Emanuel Cleaver II (D-Mo.), who said that conversations with his constituents during the spring recess suggested that "the anger level is rising significantly."
Rep. Edward J. Markey (D-Mass.), chairman of the Select Committee on Energy Independence and Global Warming, said before the hearing: "Yesterday, Americans saw that the price of gas hit a record high price. Today, on April Fool's Day, consumers all over America are hoping that the top executives from the five largest oil companies will tell us that these soaring gas prices are just part of some elaborate hoax."
The criticism was bipartisan. Rep. Candice S. Miller (R-Mich.) said big oil companies have "to do the right thing" with their profits or face a backlash from "customers who are sick and tired of paying high prices."
But the oil executives turned some of the blame back on Congress, complaining that Congress and past administrations had barred oil companies from drilling in much of the Outer Continental Shelf.
John Hofmeister, president of Shell Oil Co., noted that U.S. oil and gas production has been dropping steadily for two decades. "Why?" he said, "Because government policies place domestic oil and gas resources off-limits."
The oil executives also criticized a tax package passed by the House that would extend tax breaks for solar and wind projects and pay for that by eliminating a tax break for the five biggest international oil companies.
"Raising taxes on oil and gas production to subsidize alternatives will likely lead to less energy production not more," said J. Stephen Simon, senior vice president at Exxon Mobil Corp.
The House bill would not alter tax rates on oil and gas production, but would prevent oil firms from sharing a small cut in income tax rates given in 2004 to U.S. manufacturers.Markey quarreled with Simon over Exxon Mobil's lack of investment in alternative energy projects. Simon said Exxon Mobil is giving Stanford University $100 million over 10 years to research "breakthrough" technologies.
"OPEC has us over a barrel, and you're saying you're going to study the issue," Markey retorted.
Markey defended the House energy tax package that is still awaiting action in the Senate. "You can't have it both ways Mr. Simon," Markey said. "You can't be nickel-and-diming renewables at Exxon Mobil and simultaneously fighting our efforts to move over the resources to renewables to help this country break its dependence on foreign oil."
The executives said they focused on meeting rising U.S. demand for petroleum products.
"We're working darn hard. We have a challenge to meet," said Peter J. Robertson, vice chairman of Chevron Corp. "So life is not easy."
Rep. Cleaver cited the companies' high share prices on the stock market and said it didn't sound like much of a struggle.
"I didn't say it was a struggle," Robertson said. "I said we're working hard to solve a problem."
"With all the work on alternative energy," said Robert A. Malone, head of BP's North America operations, "the United States will consume more natural gas, oil and coal in 2030 than it does today."
