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BIG OIL DRILLED OVER TAX BREAKS

A Senate hearing makes a show of five oil executives, but it won't change the price at the pumps.

WASHINGTON - The hearing was for verbally flogging oil company CEOs, and no senator bothered to pretend it was about making gasoline prices more affordable or helping the economy recover. Republican Sen. Orrin Hatch of Utah set the tone Thursday when he opened with a portrait of a dog sitting on a pony.

Sen. Charles Schumer, D-N.Y., countered with a reference to an unicorn. Sen. Pat Roberts,R-Kan., suggested a rhinoceros. It was a fit opening for a show where the oil executives served as props for politicians needing to show voters that they, too, are angry about $4 a gallon gasoline.

"This is not going to change the price at the gas pump," Finance Committee Chairman Max Baucus admitted as he gaveled the proceedings to a close.

"I grant you," the Montana Democrat added, "we've got to develop an energy policy in this country."

The hearing didn't get Congress any closer to doing that. But it did provide Senate Democrats a televised chance to challenge the nation's five largest oil companies to defend their generous tax breaks amid huge profits. At issue, Democrats said, was a bill by Sen. Robert Menendez, D-N.J., to repeal the tax breaks granted to the five companies testifying. Menendez assailed ConocoPhillips for issuing a news release assailing repeal of the tax breaks as "un-American."

Sen. Ron Wyden, D-Ore., played a video of a 2005 congressional hearing in which oil company executives said they didn't need generous tax breaks because oil was then selling at $55 a barrel. As the hearing commenced, the price per barrel hovered close to $100.

"You all said you didn't need them in 2005," Wyden said. "You seem to be telling a different story today."

Chevron CEO John Watson, sharing the hot seat with executives from Exxon Mobil, Shell, ConocoPhillips and BP America, told senators, "Don't punish our industry for doing its job well."

The oilmen, a familiar sight at congressional grillings when gas prices move upward, argued that scaling back their tax breaks would unfairly single out their industry, hamper their ability to pursue new energy supplies and put jobs at risk.

The elephant in the hearing room was the role that rising gas prices are playing as a pocketbook issue in the early stages of the 2012 elections. House Republicans on Thursday were holding votes on a string of bills to speed up and expand offshore drilling to lessen the country's dependence on foreign oil. President Barack Obama has called for eliminating tax breaks for all oil and gas companies, raising about $44 billion over the next decade.

Thursday's marquee hearing featured the CEOs of Shell Oil, ExxonMobil, ConocoPhillips, BP America and Chevron, which together booked profits totaling nearly $32 billion during the first quarter. The Democrats say that with profits that high, the big oil companies wouldn't miss tax breaks that average $2 billion a year.

Information from McClatchy Newspapers was used in the report.

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Big oil executives serve as props for Senate committee

Thursday's marquee hearing featured the CEOs of Shell Oil, ExxonMobil, ConocoPhillips, BP America and Chevron, five companies that booked profits totaling nearly $32 billion during the first quarter. The Democrats say that with profits that high, the big oil companies wouldn't miss tax breaks that average $2 billion a year.

Chief executive/chairman MARVIN ODUM Shell Oil Co. REX TILLERSON ExxonMobil JAMES MULVA ConocoPhillips H. LAMAR MCKAY BP America JOHN WATSON Chevron Corp.
2010 profit $18.6 billion $30.5 billion $11.4 billion -$3.7 billion* $19 billion
First quarter profit, 2011 $6.3 billion $10.7 billion $3 billion $5.48 billion $6.21 billion
First quarter profit, 2010 $4.8 billion $6.3 billion $2.1 billion $5.60 billion $4.55 billion

* Loss due to charges related to Gulf of Mexico oil spill

Sources: Fortune magazine, Times wires

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