Oil executives in the hot seat
Senate hearing on oil pricing, record profits set; will normally friendly 
Republicans turn hostile?
November 8, 2005: 10:10 AM EST By Chris Isidore, CNN/Money senior writer
 
NEW YORK (CNN/Money) - CEOs from the nation's biggest oil companies face a 
grilling in Congress Wednesday before a joint Senate committee hearing on 
energy prices and record industry profits. 

The hearing, before members of both the Senate Energy and Commerce 
committees, will hear from CEO's of the nation's three largest oil 
companies -- Exxon Mobil, Chevron, ConocoPhillips, as well as the heads of 
the U.S. units of BP and Shell Petroleum. 

The five will be forced to defend strong industry profits that followed the 
spike in gasoline prices in recent months. The executives could face 
hostile questioning from Republican lawmakers, who are usually their allies 
on Capitol Hill. 

The profits of the oil and gas companies in the Standard & Poor's 500 index 
rose about 62 percent in the third quarter to about $25.9 billion, 
excluding special items, compared to a year ago, according to earnings 
tracker First Call. Exxon Mobil reported the largest profit in U.S. 
corporate history during the quarter. 

That jump in profits followed year-over-year growth of 42 percent for the 
industry in the second quarter, according to First Call, and full-year 
profit growth forecast to be up 49 percent. And the profits are expected to 
disappear any time soon. Analysts surveyed by First Call expect industry 
earnings to be up another 13 percent in 2006. 

Oil industry stocks have retreated about 11 percent from the highs reached 
in September when oil and gas prices were near record highs. But even with 
that retreat in stock and oil prices, the Amex oil index still shows a 
nearly 40 percent rise for oil stocks over the last 12 months. 

The executives testimony happens as millions of Americans face sharply 
higher home heating bills this winter. One Republican set to hear testimony 
and ask questions, Olympia Snowe of Maine, called on the major oil 
companies to voluntarily contribute to a federal program that helps low-
income families pay part of their winter heating bills. 

"It is deeply concerning and, frankly, outrageous that oil companies are 
boasting record-breaking profits," said a statement from Snowe, a member of 
the Commerce committee. "These large energy companies simply must not 
unfairly and overwhelmingly benefit at the expense of our nation's 
citizens, for whom heating fuel is a basic necessity of life." 

The heating sticker shock will come despite a recent retreat in oil prices 
in world markets. Gasoline prices have also retreated in recent weeks. 

A survey Sunday by analyst Trilby Lundberg found the average price at the 
pump fell to $2.43, about 20 cents a gallon below their pre-Katrina level. 
Oil futures have been hovering near or below the $60 a barrel benchmark in 
recent days. 

The committee will also hear from Federal Trade Commission chairman Deborah 
Platt Majoras, as well as state attorneys general from New Jersey, South 
Carolina and Arizona. 

The AG's from New Jersey and South Carolina, the former a Democrat, the 
latter a Republican, have both brought price gouging suits against oil 
companies and gas station owners since the post-Hurricane Katrina price 
spike. 

Arizona Attorney General Terry Goddard, a Democrat, has proposed an anti-
gouging law in that state. 

Even some Republican leaders have been critical of oil industry profits 
reported in the third quarter, and one, Sen. Judd Gregg of New Hampshire, 
said last month that Congress should consider reinstituting an excess 
profit tax on oil companies, with some of the proceeds going to help 
consumers pay for their higher fuel bills. 

Democrat Byron Dorgan, D-N.D., has proposed such a "windfall profit" tax, 
but so far has yet to get any Republican co-sponsors for his proposal. 

For more on the chances of a windfall profit tax being imposed on the oil 
industry, click here.   
 



On Mon, 7 Nov 2005 09:36:43 -0800, Craig Lalley <[log in to unmask]> wrote:

>--- "Newton, Ernie" <[log in to unmask]> wrote:
>
>> BP - Net profit of 6.5 billion (yes with a B) during that quarter.
>> Exxon/Mobil had the highest profit percentage on record for that
>> quarter...75%.
>>
>
>Ernie,
>
>There is nothing wrong with making a profit.  When it is earned... How 
much money and how much
>risk is involved it making 6.5 billion.   I seem to recall some ship named 
Valdeze?  that cost
>Exxon quite a bit.
>
>Heck they aren't even making the major share of profits... like say the 
government.  So go ahead
>and let them blame it on the Hurricanes, (competition will work it's way 
out).  Just don't let
>some Government offical complain about gouging.
>
>-Craig
>
>
>
>
>
>
>__________________________________
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