Gold9472
05-25-2008, 10:21 AM
Senators Sharply Question Oil Officials
http://www.nytimes.com/2008/05/22/business/22oil.html?hp
By DAVID M. HERSZENHORN
Published: May 22, 2008
WASHINGTON — Democrats on the Senate Judiciary Committee vented their fury over high gasoline prices at executives of the nation’s five largest oil companies on Wednesday, grilling the oilmen over their multimillion-dollar pay packages and warning them that Congress was intent on taking action that could include a new tax on so-called windfall profits.
A woman protested oil prices while executives from the energy companies testified before a Senate panel. The executives have called on Congress to allow more drilling for domestic oil.
Senator Arlen Specter, left, and Senator Patrick J. Leahy at the Judiciary Committee hearing. Mr. Leahy asked the oil company executives to tell him the size of their pay packages.
Such showdowns between lawmakers and oil titans have become a familiar routine on Capitol Hill. But with gas prices nearing $4 a gallon, and lawmakers headed home for a weeklong Memorial Day recess where they expect to get an earful from angry constituents, there is added urgency for Congress to appear active.
But while momentum is building for several measures, including a bill that would allow the Organization of the Petroleum Exporting Countries to be sued in American courts under antitrust laws, there is little sign that any of the proposals would do much, if anything, to lower prices quickly.
And the oil executives warned that government intervention might only make things worse. Instead, they called on Congress to allow more drilling and exploration for domestic oil, both in the Arctic National Wildlife Refuge, and offshore in the Atlantic and Pacific Oceans and in the eastern Gulf of Mexico.
The increasing urgency to seem aggressive about gasoline prices was apparent on Tuesday when the House voted by an overwhelming 324 to 84 to approve the bill, commonly referred to as Nopec, which classifies OPEC as a monopoly in violation of the Sherman Antitrust Act.
Senate Democrats have included that measure as part of a package of legislation intended to address the high price of gasoline, along with the tax on windfall profits and a measure to tamp down speculation in the oil futures market that many lawmakers think is contributing to the run-up in prices.
On Monday, President Bush signed a bill temporarily suspending the purchase of crude oil for the nation’s Strategic Petroleum Reserve. Mr. Bush had initially opposed such action but relented after the House and Senate approved the bill by wide margins.
Oil prices, meanwhile, climbed to yet another record high on Wednesday, settling at $133.17 a barrel.
At the Judiciary Committee hearing, Democratic senators struggled to have the executives explain how oil prices had risen so high. The senators expressed doubt that basic laws of supply and demand were at work and suggested instead a more sinister combination of monopolistic behavior by oil-producing countries, speculation in the futures markets and sheer corporate greed.
Senator Richard J. Durbin, Democrat of Illinois and a strong supporter of Senator Barack Obama’s presidential bid, made a particularly pointed attack, in which he seemed to warn the oil executives that they would soon no longer have such a good friend in the White House.
He also suggested that Mr. Bush should be doing more to press the oil companies to help lower prices at the pump, while acknowledging that it would be difficult to pass a windfall profits tax while Mr. Bush was still in office.
“It strikes me that this is the right situation for a president to step in, for a president of the United States to step in,” Mr. Durbin said. “I think the president should be calling you all before his little meeting place, the White House, and talking about what you are doing to the American economy.”
Mr. Durbin added: “Does it trouble any of you when you see what you are doing to us, the profits that you are taking, the costs that you are imposing on working families, small businesses, truckers, farmers?”
The executives pushed back, suggesting that Democrats in Congress were at fault for not allowing more drilling and exploration for domestic oil and insisting that global economic conditions outside their control were mostly responsible for the high prices.
“As repetitive and uninteresting as it may sound, the fundamental laws of supply and demand are at work,” said John Hofmeister, the president of Shell Oil Company. “Oil exporting nations, as has been said, are managing their natural resource development and production to supply their local and global markets in their own self-interest.”
At every turn, though, they encountered hostile Democratic interrogators. Senator Patrick J. Leahy, Democrat of Vermont, the chairman of the Judiciary Committee, demanded that the executives tell him the amount of their pay packages and then ridiculed those who said they did not know exactly how much they earned.
“I wish I made enough money that I didn’t even have to know how much I make,” Mr. Leahy told John E. Lowe, the executive vice president of ConocoPhillips.
Two of the five executives — Mr. Hofmeister of Shell and Robert A. Malone, the chairman and president of BP America — noted that their pay was not a matter of public record because they were not among the five highest-paid employees at their companies. Still, they volunteered that they had earned in excess of $2 million last year.
Senator Dianne Feinstein, Democrat of California, derisively accused the executives of trying to portray themselves and their companies as victims.
“To me it was just a litany of complaints that you are all just hapless victims of a system, you blame one thing or another, which most people would say is just simply the cost of doing business,” Ms. Feinstein said. “Yet you rack up record profits, record profits, quarter after quarter after quarter, and apparently have no ethical compass about the price of gasoline.”
Peter J. Robertson, the vice chairman of Chevron, replied: “I don’t feel like a victim at all.”
“I feel very proud of the fact that we are investing all of our earnings,” he said. “We invest in future supplies for the world, so I am very proud of that.”
In the House, Representative Edward J. Markey, Democrat of Massachusetts and chairman of the Select Committee on Energy Independence and Global Warming, released a scathing report on Wednesday about how oil companies had used record profits in recent years to increase executive pay and buy back their own shares.
http://www.nytimes.com/2008/05/22/business/22oil.html?hp
By DAVID M. HERSZENHORN
Published: May 22, 2008
WASHINGTON — Democrats on the Senate Judiciary Committee vented their fury over high gasoline prices at executives of the nation’s five largest oil companies on Wednesday, grilling the oilmen over their multimillion-dollar pay packages and warning them that Congress was intent on taking action that could include a new tax on so-called windfall profits.
A woman protested oil prices while executives from the energy companies testified before a Senate panel. The executives have called on Congress to allow more drilling for domestic oil.
Senator Arlen Specter, left, and Senator Patrick J. Leahy at the Judiciary Committee hearing. Mr. Leahy asked the oil company executives to tell him the size of their pay packages.
Such showdowns between lawmakers and oil titans have become a familiar routine on Capitol Hill. But with gas prices nearing $4 a gallon, and lawmakers headed home for a weeklong Memorial Day recess where they expect to get an earful from angry constituents, there is added urgency for Congress to appear active.
But while momentum is building for several measures, including a bill that would allow the Organization of the Petroleum Exporting Countries to be sued in American courts under antitrust laws, there is little sign that any of the proposals would do much, if anything, to lower prices quickly.
And the oil executives warned that government intervention might only make things worse. Instead, they called on Congress to allow more drilling and exploration for domestic oil, both in the Arctic National Wildlife Refuge, and offshore in the Atlantic and Pacific Oceans and in the eastern Gulf of Mexico.
The increasing urgency to seem aggressive about gasoline prices was apparent on Tuesday when the House voted by an overwhelming 324 to 84 to approve the bill, commonly referred to as Nopec, which classifies OPEC as a monopoly in violation of the Sherman Antitrust Act.
Senate Democrats have included that measure as part of a package of legislation intended to address the high price of gasoline, along with the tax on windfall profits and a measure to tamp down speculation in the oil futures market that many lawmakers think is contributing to the run-up in prices.
On Monday, President Bush signed a bill temporarily suspending the purchase of crude oil for the nation’s Strategic Petroleum Reserve. Mr. Bush had initially opposed such action but relented after the House and Senate approved the bill by wide margins.
Oil prices, meanwhile, climbed to yet another record high on Wednesday, settling at $133.17 a barrel.
At the Judiciary Committee hearing, Democratic senators struggled to have the executives explain how oil prices had risen so high. The senators expressed doubt that basic laws of supply and demand were at work and suggested instead a more sinister combination of monopolistic behavior by oil-producing countries, speculation in the futures markets and sheer corporate greed.
Senator Richard J. Durbin, Democrat of Illinois and a strong supporter of Senator Barack Obama’s presidential bid, made a particularly pointed attack, in which he seemed to warn the oil executives that they would soon no longer have such a good friend in the White House.
He also suggested that Mr. Bush should be doing more to press the oil companies to help lower prices at the pump, while acknowledging that it would be difficult to pass a windfall profits tax while Mr. Bush was still in office.
“It strikes me that this is the right situation for a president to step in, for a president of the United States to step in,” Mr. Durbin said. “I think the president should be calling you all before his little meeting place, the White House, and talking about what you are doing to the American economy.”
Mr. Durbin added: “Does it trouble any of you when you see what you are doing to us, the profits that you are taking, the costs that you are imposing on working families, small businesses, truckers, farmers?”
The executives pushed back, suggesting that Democrats in Congress were at fault for not allowing more drilling and exploration for domestic oil and insisting that global economic conditions outside their control were mostly responsible for the high prices.
“As repetitive and uninteresting as it may sound, the fundamental laws of supply and demand are at work,” said John Hofmeister, the president of Shell Oil Company. “Oil exporting nations, as has been said, are managing their natural resource development and production to supply their local and global markets in their own self-interest.”
At every turn, though, they encountered hostile Democratic interrogators. Senator Patrick J. Leahy, Democrat of Vermont, the chairman of the Judiciary Committee, demanded that the executives tell him the amount of their pay packages and then ridiculed those who said they did not know exactly how much they earned.
“I wish I made enough money that I didn’t even have to know how much I make,” Mr. Leahy told John E. Lowe, the executive vice president of ConocoPhillips.
Two of the five executives — Mr. Hofmeister of Shell and Robert A. Malone, the chairman and president of BP America — noted that their pay was not a matter of public record because they were not among the five highest-paid employees at their companies. Still, they volunteered that they had earned in excess of $2 million last year.
Senator Dianne Feinstein, Democrat of California, derisively accused the executives of trying to portray themselves and their companies as victims.
“To me it was just a litany of complaints that you are all just hapless victims of a system, you blame one thing or another, which most people would say is just simply the cost of doing business,” Ms. Feinstein said. “Yet you rack up record profits, record profits, quarter after quarter after quarter, and apparently have no ethical compass about the price of gasoline.”
Peter J. Robertson, the vice chairman of Chevron, replied: “I don’t feel like a victim at all.”
“I feel very proud of the fact that we are investing all of our earnings,” he said. “We invest in future supplies for the world, so I am very proud of that.”
In the House, Representative Edward J. Markey, Democrat of Massachusetts and chairman of the Select Committee on Energy Independence and Global Warming, released a scathing report on Wednesday about how oil companies had used record profits in recent years to increase executive pay and buy back their own shares.