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The joint hearing of the US Senate’s Energy and Commerce committees
on oil profits Wednesday had its comical side. Republican and Democratic lawmakers,
many of them millionaires themselves and recipients of fat campaign contributions
from the oil companies, feigned dismay and even outrage over the vast sums that
have poured into the coffers of big oil—and the pockets of its CEOs—as
a result of soaring fuel costs over the past several months.
The exercise recalled nothing so much as the scene from the film “Casablanca”
in which Inspector Renault—himself on the take—declares that he
is “shocked, shocked to find that gambling is going on here.”
There is a “growing suspicion that oil companies are taking unfair advantage,”
blustered Senator Pete Domenici (Republican of New Mexico), “The oil companies
owe this country an explanation.” His constituents, he added, think that
“they are getting ripped off.”
Among those promoting the hearings were the Senate’s multi-millionaire
Majority Leader Bill Frist and House Speaker Dennis Hastert, who himself has
taken in some $20,000 in campaign contributions from the oil industry PACs so
far this year.
“We expect oil companies to do their part to help ease the pain American
families are feeling from high energy prices,” Hastert declared.
Even the White House got in on the act. Bush’s press spokesman Scott
McClellan told reporters, “Energy prices have been too high and energy
companies have realized significant increases in profits. It’s important
that the private sector be good corporate citizens and invest in the energy
infrastructure and support those in need.”
This from an administration that is effectively run by the former Halliburton
CEO Dick Cheney and that counted Enron and its CEO Kenneth Lay as among its
closest supporters.
One Republican at Wednesday’s hearing summoned up genuine anger. “I
must tell you, it’s not terribly fun defending you,” declared Sen.
Larry Craig of Idaho. It may be a dirty job, but at least it pays well. Craig
took in close to $100,000 in contributions from oil and gas companies between
1999 and 2004.
Senator Barbara Boxer (Democrat of California) escalated the rhetorical offensive.
She exhibited a chart detailing the multi-million-dollar pay packages going
to each of the CEOs. Then, in what must qualify as the understatement of the
session, she declared heatedly, “Your sacrifice appears to be nothing.”
Indeed, Lee Raymond, chairman of Exxon Mobil, boasted $38 million in total
compensation in 2004, a figure that could be construed as modest in relation
to the $9.92 billion quarterly profits racked up by the company recently—a
record in the history of world capitalism—and the $96 billion in profits
that the industry as a whole is expected to reap in earnings for this year.
Exxon’s total revenues for the third quarter topped $100 billion. On an
annualized basis, this is slightly less than the total earnings of Australia.
Raymond and the four other big oil CEOs—Chevron, ConocoPhillips, BPAmerica
and Shell Oil USA—called to testify at the hearing were hardly contrite
about the massive amounts of money that they took in from soaring gas prices
and as a result of the disasters suffered by millions in Hurricanes Katrina
and Rita. Speculation and profiteering at the expense of the American people
is their business and it has been a very good one.
The hearing began with a dispute over whether the five CEOs would be made to
rise, raise their right hands and swear to tell the truth. The ritual—associated
in the public consciousness with mobsters and people hauled before Congress
accused as Communists—was required of tobacco industry executives at Senate
hearings on the effects of smoking in the 1990s.
Certainly, there is an unassailable argument to be made that the oil monopolies
have inflicted far greater harm upon the people of the US and the world than
the tobacco bosses.
A war is being fought in Iraq—at the cost in lives of over 2,050 US soldiers
and more than 100,000 Iraqi civilians—to secure for these companies preeminent
control over the second largest oil reserves in the world. Moreover, they have
been the driving force behind a US policy to deny the threat of global warming
and continue on a path that threatens the destruction of life on the planet.
Nonetheless, they were not asked to stand and swear to tell the truth. Republican
committee leaders intervened to spare them the indignity. All those campaign
contributions have to count for something.
In his testimony, Raymond defended Exxon’s gargantuan profits, asserting
that they only made up for the oil giant’s lean years. Petroleum earnings,
he declared “go up and down” from year to year. This year, of course,
Exxon’s third-quarter earnings went up by an astonishing 75 percent from
a year ago.
He went so far as to acknowledge that rising gas prices “have put a strain
on Americans’ household budgets.” For a man who took home $38 million
last year, this is merely a theoretical proposition. For millions of American
working people, however, it is a question of having to choose between filling
up the gas tank and heating the home or providing food and other basic necessities
for themselves and their families.
The government has warned that natural gas prices in the Midwest will skyrocket
by 61 percent this winter and home heating oil in the Northeast will likely
soar by over 30 percent. The inevitable result will be deepening poverty and
deaths from the cold.
A rather modest proposal that the oil companies divert a portion of their windfall
profits into the Low Income Heating Assistance Program—a program repeatedly
slashed by the Senate itself—got a frigid reception from the big oil CEOs.
“As an industry we feel it is not a good precedent to fund a government
program,” ConocoPhillips chairman James Mulva, told the Senate panel.
He warned that giving money to the poor would only divert it from the quest
for new oil to exploit.
As for threats of windfall profit taxes or anti-gouging legislation, the oil
executives responded by threatening that any such measures would only produce
shortages and higher prices, while driving away investment in new refineries.
That the oil industry has not built a single new refinery in the US for 29 years
was not something they bothered to mention.
All of the industry’s arguments about the “free market” setting
prices is so much hogwash. The soaring cost of energy can be traced in large
part to the ever greater monopolization of the oil industry. The process of
mergers and acquisitions within the industry that began in the 1990s was driven
by the Wall Street’s demands for profits, not energy needs. And the industry’s
decisions remain a matter of producing quarterly profits for investors.
That such methods are incapable of assuring rational distribution of energy
supplies has become obvious. Even more evident is the inability of this system
to confront the profound dangers posed by global warming, caused by dependence
upon fossil fuels.
For the oil companies, the Senate hearing was an opportunity to press for even
greater concessions from the government. Chief among them is environmental deregulation.
They want Alaska’s Arctic National Wildlife Refuge as well as the continental
shelves opened to unfettered drilling. They also want the Clean Air Act gutted
to make refining cheaper and further boost profits.
There is no prospect of any legislation that will curb energy prices or the
profit drive of the oil monopolies emerging from the US Senate. Wednesday’s
hearing merely served as a stage for members of both parties to pose as critics
of the energy industry. That they felt the need to do so is indicative of the
growing anxiety within US ruling circles that the connection between soaring
corporate profits, on the one hand, and the deepening social crisis confronting
the majority of the population, on the other, is becoming dangerously apparent.
While the pretense of the Senate in holding the hearing was farcical, the testimony
that was elicited made a strong case for a necessary measure that neither Democrats
or Republicans will advocate, much less carry out: the nationalization of the
energy industry so that it can be run under public ownership and control in
the interest of the entire population.