Judgment Day: Oil execs face angry Democrats

Five executives from America’s leading oil companies were marched in front of the Senate Finance Committee Thursday morning for a public scolding, and told to defend industry tax breaks while Americans are being charged $4 for a gallon of gas.

In other words, Thursday was judgment day the CEO’s of the country’s five largest oil companies. And because most of the committee’s Republicans were attending a budget meeting at the White House, the executives were left to face a very partisan, very unhappy panel of Democrats.

Representing the scorned oil industry was John Watson of Chevron, Marvin Odum of Shell Oil, James Mulva of ConocoPhillips, H. Lamar McKay of BP America, and Rex Tillerson of ExxonMobil.

The hearing came after the committee’s chairman, Sen. Max Baucus, introduced legislation to repeal $21 billion over ten years in tax credits for oil and natural gas companies. In the House, however, legislation was passed Wednesday to actually expand access to offshore drilling.

Nonetheless, Democrats are on the warpath against record profits and tax breaks for an industry that they say should “share in the sacrifice”.

On the other side, Republicans defend the tax breaks, saying they facilitate increased access for drilling, which ultimately leads to lower costs for production and prices at the pump.

Sen. Orrin Hatch of Utah, the lone Republican in attendance for most of the hearing, argued that cutting the tax breaks would do nothing to ease pain at the pump.

The message brought by the industry execs: no one is asking for special government subsidies, only equitable treatment in the tax system that other industries receive.

“It’s not a subsidy; it’s a legitimate tax deduction,” said Tillerson.

He took it a step further by telling the committee, “It is not simply that they are misinformed and discriminatory. They are counterproductive. By undermining U.S. competitiveness, they would discourage future investment in energy projects in the United States and therefore undercut job creation and economic growth.”

In his opening statement, Watson also made it a point of noting that oil companies pay their fair share of American taxes. “Few businesses pay more taxes than oil and gas companies,” he said.

In their questioning, however, the committee’s Democrats framed the issue around the country’s debt and the need to cut spending overall.

  • glassmaker

    Go to Opensecrets.org and check out who Rockefeller, Schumer, and Baucus took contributions from.

    Nooooo, no conflict of interest here. Move along……

  • virginiagentleman

    I’m wondering why ANY industry is deserving of a ‘subsidy’, ‘tax breaks’ or taxpayers funds of any sort… An industry or a business should operate solely on the talent, private funding, product/s, and, reasonable independance from government meddling….Ethanol ring any bells? Huge corporate farms, hundreds of thousands of acres, getting ‘tax breaks’ and ‘subsidys’ to grow corn. Not for food mind you. Instead, it’s fuel for combustion engines. The manufacturers of these engines say it’s harmful to their engines….But government backs it with our money anyway….Independent family farms are being sold off to giant corporate farms all throughout the sunbelt…. The price of food is rising sharply, less corn for people and animals, but plenty for engines….using taxpayers money….And it takes almost a gal. of an oil based fuel to produce 1/2 gal of ethanol….This is what happens when government gets involved in business; EVERYTHING GETS MORE EXPENSIVE ! End all subsidys and ‘government’ funding to industries.

  • http://www.facebook.com/people/Bill-Sullivan/512796525 Bill Sullivan

    When will the people of New York realize that Schumer is an empty suit wind bag nit-wit, and vote his A– out of office?

  • mundakal

    The CEO’s should have said “Why not tax breaks, you seem to like our PAC contributions Senators? Where do you think that money comes from?” They should have had a list of PAC recipients (WH, Senate & House – both parties) handy for the record in case some of them disputed that assertion. What a hogwash! Grandstanding at best!!

  • loudog

    They’re making a profit this yr of $140 billion and they need a tax break? “Conservatives” cry about reducing the debt but the only thing they seem to be interested in is killing medicare, and they’re even beginning to waffle on that as voters start to figure it out.

    End tax subsidies to industry? nope. Reduce the police the world budget? nope. Raise revenue to start paying for 10 yrs of war? nope. All talk for an election cycle.

  • erick1740

    Democrats are perpetually angry and unhappy. It is the entire of their being.

  • jmk1502

    Anyone that believes for 1 second that the price of oil (gas) is dictated by supply and demand is a complete moron, or being totally dishonest. It truly pains my heart to see those poor oil companies suffering with their record profits. Just reprehensible.

    • glassmaker

      Fine. Ruin the oil companies and see how many unions’ pension funds go belly up. I would laugh and laugh and laugh. Or didn’t you think far enough ahead to realize that stockholders own oil companies and those stockholders are pensioners. Idiot.

      • loudog

        Are you claiming that the only way for industry to survive is with government assistance? $140 billion industry profit this yr isn’t good enough, they need government subsidies to survive?

        • glassmaker

          Is that what I said? No. As usual, you follow your normal m.o. and go to the moon trying to make connections where there are none.

          Demonizing oil companies,as jmk has done over and over, is a slippery slope. They have stockholders that are, more times than not, retired little old union workers, etc. You will never convince me that stripping them of their subsidies will be the end of demonizing them. The democrats will then go after their profits, which, if earned legally, oil companies have every right to make. Give JMK’s ilk an inch and they will take the whole damn thing. I’m just saying – destroy the oil companies and you destroy their stockholders. Is that what you want to do?

          • loudog

            I guess I assumed when you said ending subsidies would “ruin” the oil companies, you didn’t think they’d survive without them.

            advocating the end of government subsidies to private companies isn’t really demonizing them, imo.

          • glassmaker

            loudog, I was talking to jmk, which was really a continuation of an earlier conversation with him.

            “when you said ending subsidies ” I never brought up ending subsidies. Where are you getting that at? I think you’re in the middle of a conversation I was trying to continue with JMK that you don’t understand. I doubt he does either, but I try.

        • glassmaker

          Btw – it isn’t “supply and demand” that’s the problem, it’s power and control. If we drilled here and drilled now, built nuclear plants, etc, we would have control over our own energy instead of giving power to Brazil, as Obama has now promised to do.

          Is that so hard to understand? You’re always stating that we need to quit spending money all over the world on military, yet you’re willing to give “unfunded” money to Brazil to drill for oil when we could be doing it here and providing jobs to pay taxes to FUND the military you complain about?

          • loudog

            I agree with you about becoming energy independent with nuke, solar/wind and natural gas, etc.

            I’m not willing to give anyone more money, including Brazil. This may be shocking to you but Obama doesn’t speak for me. Sometimes I agree, sometimes not, just like GWB.

      • GJPinks

        YES! Let’s go after those oil companies! JFK did a great job doing the same thing with US Steel, I can hardly wait for the days that the US oil industry is as strong as out Steel Industry.
        And YES lets get rid of those sneaky tax subsidies! Especially Solar and Wind! That will fix them!
        And then when we have a third world economy we can eat the rich. Anyone for Soros Parmesan?

  • Bsmooth

    Wow, could this report be anymore wrong? Not one word about how the CEO of Exxon admitted that oil would be down to $50-70 a barrel based on normal supply and demand without speculators driving up the price.
    So by their own admission specualtion has almost doubled the price of a barrel of oil.
    Also nothing mentioned about the GOP fighting to keep new rules on commidities speculation( which affects our fuel and food prices directly) until the end of 2012 after the next election.

  • nmb7401

    Dog and pony show didn’t begin to describe this circus…when they were done they should have made the Senators sit on the other side and explain the taxes the states and feds get from the price of gas which just happens to be way bigger than the profit margin for the oil companies! Also if the guy in the White House would let us drill we COULD bring down the price of gas and oil, but then that’s another dog and pony show!

  • borntoraisehogs

    democRATs will not be satisfied until all energy is state owned and rationed.