November 09, 2005

Oil Company Executives Tell Wyden: We Don't Need Government Incentives for Energy Exploration

Wyden plans to offer amendment to repeal tax break in energy billfor energy company exploration in the face of record high oil company profits

WASHINGTON, D.C. - Five oil company executives told U.S. Senator Ron Wyden (D-Ore.) today that they do not need tax incentives included in this year's Energy bill for additional energy exploration in the face of record gas prices and oil company profits. The executives today told Wyden that they agreed with a statement by President Bush earlier this year that when the price of oil exceeds $55 a barrel, the oil companies do not need additional incentives for oil and gas exploration. The price of crude oil is currently at $60 a barrel. In response, Wyden said he intends to offer an amendment to tax reconciliation legislation to repeal an incentive originally included in the Energy bill (H.R. 6) enacted earlier this year. Wyden questioned the chief executives of Exxon-Mobil, Chevron, ConocoPhillips, BPAmerica and Shell Oil USA today during a joint hearing of the Senate Committee on Energy and Natural Resources and the Senate Commerce Committee on energy pricing and profits. Recent reports have shown that the five companies earned more than $25 billion in profits during the most recent quarter. "Your companies have been charging record prices and getting record profits, but also getting record tax breaks. Now, the President says they aren't needed and you just told me they aren't needed. But Congress just a couple of months ago gave you several billion dollars in new tax breaks on top of the tax breaks you already get. Why shouldn't Congress take back the billions of dollars in brand new tax breaks, breaks you just told me aren't needed, and use that money to help people who are hurting in our country?," asked Wyden of the executives at today's hearing. None of the executives today said they would be opposed to Wyden's efforts. He plans to seek the repeal of a tax break for oil companies expenses relating to oil and gas exploration. Also at today's hearing Lee Raymond, the chairman of Exxon-Mobil, declined to support efforts to rein in oil commodity speculators, whose trading affects the price of oil. Raymond said that speculation is simply part of the energy market. Raymond has previously said that speculation on oil prices accounts for about $20 of the current per-barrel cost of oil. Wyden also questioned whether the executives would halt anti-competitive practices such as zone pricing and redlining, which have hurt energy consumers particularly on the West Coast. As the hearing was drawing to a close, he asked that his questions and the executives' answers be submitted for the record in a timely fashion.