Congress Pushes for Some Answers From Oil Execs

Five US Oil Execs faced the Congressional Committee on Committee on Energy Independence and Global Warming, chaired by Rep. Ed Markey (D-Mass) on why gas prices have climbed even as oil profits have increased and demand has lowered. (Watch the meeting live).

Source: Congress grills oil execs on pump prices | Reuters

"Given that the largest contributor to the cost of gasoline is crude oil, this has translated into record-high gasoline prices," Peter Robertson, vice chairman of Chevron, the second-biggest U.S. oil company behind Exxon, said in testimony.

Stephen Simon, senior vice president of Exxon Mobil, said punitive measures against U.S. oil companies would only strain supplies further.

"Imposing punitive taxes on American energy companies ... will discourage the sustained investments needed to continue safeguarding U.S. energy security," Simon said in testimony.

Meanwhile, Consumer Watchdog (formerly the Foundation for Taxpayer and Consumer Rights) accused oil companies on squeezing refinery output in order to increase prices for profits.

"Even the big oil states of Louisiana and Texas, both rich in refineries, hit new price records today," said Judy Dugan, research director of the nonprofit, nonpartisan Consumer Watchdog and its OilWatchdog.org project. "Oil companies that have made record profits on oil at over $100 a barrel are now cutting gasoline output at the refinery level to push up their profits on the making of gasoline."

Markey called the hearing: "Drilling for Answers: Oil Company Profits, Runaway Prices and the Pursuit of Alternatives." Markey has supported removing $18 billion in tax breaks, and instead pushing for alternative energy sources such as wind or solar.

According to Markey, the House recently passed the Renewable Energy and Energy Conservation Tax Act of 2008, but President Bush and the top oil companies are currently fighting to defeat the measure in the Senate.

"This new gas price record is a perfect example of why we need these oil companies to go on the record with the American people to discuss our dangerous dependence on oil," said Markey. "These companies are defending billions in federal subsidies needed for renewable fuels and clean energy while reaping over a hundred billion dollars in profits in just the last year alone."