Oil Executives Grilled Over Soaring Prices
RENEE MONTAGNE, host:
It's MORNING EDITION from NPR News. I'm Renee Montagne. Good morning. Executives from the nation's five biggest oil companies were back in the hot seat on Capitol Hill yesterday. The last time they'd been grilled there, it was April Fool's Day, when oil prices hovered around $100 a barrel.
They've since leaped to $133 a barrel, and the price of gasoline has risen more than $.50 a gallon. Members of the Senate Judiciary Committee wanted to know why, and they also wanted to know how much higher those prices will go. NPR's David Welna has this story.
DAVID WELNA: It was as if the top executives from Chevron, ExxonMobil, British Petroleum, ConocoPhillips and Shell Oil had all been called into the principal's office on suspicion of cheating. An indignant Judiciary Committee Chairman Patrick Leahy scolded them for collectively making $36 billion of what he called exorbitant profits during the first three months of this year.
Senator PATRICK LEAHY (Democrat, Vermont): I'd like to know, I'm sure American families, American small businesses would like to know why prices are so disconnected from what normal supply and demand would indicate. Why has the price of oil increased 400 percent since President Bush took office? Why has it nearly doubled in the last year alone?
WELNA: Shell's John Hoffmeister pointed a finger of blame at the U.S. Congress for not lifting environmental protections on huge potential drilling areas.
Mr. JOHN HOFFMEISTER (Shell Oil): In the United States, access to our own oil and gas resources has been limited for the last 30 years, prohibiting companies such as Shell from exploring and developing resources for the benefit of the American people.
WELNA: ConocoPhillips' John Lowe also took aim at Congress. He called the windfall profits taxes on oil companies advocated by some Democrats a bad idea.
Mr. JOHN LOWE (ConocoPhillips): This has been tried before with extremely negative results - reducing supplies, eliminating jobs and resulting in higher prices. The nation cannot afford to make that mistake again.
WELNA: And ExxonMobil's Stephen Simon, whose company made over $40 billion in profits last year, defended such earnings as part of what he called a current up-cycle.
Mr. STEPHEN SIMON (ExxonMobil): When energy prices are high, the urge to point fingers at oil companies is strong.
WELNA: The senators were unmoved. California Democrat Diane Feinstein said all she heard from the oil executives was a litany of complaints, as if they were hapless victims of the system.
Senator DIANE FEINSTEIN (Democrat, California): And yet you rack up record profits, record profits for any corporation in the United States of America, quarter after quarter after quarter, and apparently have no ethical compass about the price of gasoline. You're just victims.
WELNA: And Rhode Island Democrat Sheldon Whitehouse put the question that's on everyone's mind to ExxonMobil's Simon.
Senator SHELDON WHITEHOUSE (Democrat, Rhode Island): What is your view on where the price of gasoline is going to be a month from now, six months from now, a year from now?
Mr. SIMON: The practical fact of the matter is there is no way that we can make that prediction.
WELNA: David Welna, NPR News, The Capitol. Transcript provided by NPR, Copyright NPR.