By Bruce Edwards
Soaring energy prices and record oil company profits are again eliciting calls for measures to rein in how much profit oil companies keep.
Last week, Exxon Mobil reported a record 2007 profit of $40.6 billion. Chevron also reported a record profit as did European oil company, Royal Dutch Shell.
Calls to curb oil company profits are coming from consumer advocates and members of Congress, including Vermont's three-member congressional delegation, which issued statements critical of the latest earnings reports.
"It is absurd for oil companies like Exxon Mobil to be raking in obscene profits while millions of Americans are struggling to pay skyrocketing gas and home heating oil prices," Sen. Bernard Sanders, I-Vt., said.
Sanders wants a windfall profits tax with the proceeds targeted to repair the nation's crumbling infrastructure.
He also urged the Bush administration to file a complaint with the World Trade Organization against OPEC for conspiring to hike crude oil prices. Sanders would also place a freeze on large oil company merg-ers and said there should be serious consideration given to breaking up some of the biggest U.S. oil companies.
Sen. Patrick Leahy, D-Vt., also favors a windfall profits tax, saying "the Bush White House instead has been more interested in finding even more tax breaks to help the oil companies."
He said the Bush administration also refuses to apply U.S. antitrust laws to the OPEC cartel.
"Congress needs to watch closely for price gouging, because the Bush Administration will not," said Leahy, chairman of the Senate Judiciary Committee.
Rep. Peter Welch, D-Vt., called for a repeal of President Bush's tax breaks for oil companies and the adoption of a sensible energy policy. He also repeated his call to close the Enron Loophole "which would prevent energy speculators from driving up fuel costs through excessive manipulation of the market."
A spokeswoman for the oil industry said Monday calls for a windfall profits tax are misguided.
"If you look at the earnings of these companies, they're right in line with other companies who are manufacturing on the Standard and Poor's," said Sara Banaszak, an economist with the American Petroleum Institute. "It's only within the last year or two that the average earnings of these companies has just slightly performed better than the rest of the Standard and Poor's Industrials."
She said for most of the 1980s and 1990s, oil companies underperformed the S&P index.
"The misunderstanding originates in the fact companies in the oil and gas industry are large so when you report the earnings as a pure dollar number it's a very large number," Banaszak said, "but their investments are also large."
Banaszak said oil companies pay their fair share of corporate taxes and she said the industry spends billions of dollars on oil exploration and invests heavily in cleaner burning fuels and renewable energy.
Sanders, however, disputed the industry's commitment to the environment and to renewables, alleging that since 2001, the oil industry "has earned more than half a trillion dollars in profits, but devoted less than a penny per gallon to produce clean and affordable renewable fuels in this country to reduce Americans' dependency on oil."
By Bruce Edwards
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