May 21, 2008

Senate Judiciary Committee Hears from Oil Companies About Rising Costs at the Pump

Big Oil Executives Defend Record Profits in Spite of Consumers Getting Pinched

Washington, D.C. – As crude oil prices reached a new all-time high of $132.08 per barrel and Rhode Islanders paid more than $3.85 a gallon at the pump, the Senate Judiciary Committee today heard testimony from top executives of America’s biggest oil companies in an effort to get an explanation for record-breaking oil prices. U.S. Senator Sheldon Whitehouse helped to chair the hearing.

Executives of BP America Inc., Shell Oil Company, Chevron Corporation, ConocoPhillips Company, and Exxon Mobil Corporation defended the current price of crude oil as a natural phenomenon that was dictated by market forces – even though John Hofmeister, president of Shell Oil Company, said his company could still turn a profit if crude oil prices were closer to $35 to $65 a barrel.

“While consumers in Rhode Island and throughout the country pay nearly $4 a gallon for gas, oil companies continue to defend their obscene profits and act as if nothing’s wrong,” Whitehouse said. “It’s time for Big Oil to start sharing the load by lowering their prices and investing in increased capacity and alternative fuels.”

Whitehouse spoke yesterday on the Senate floor about the impact of high fuel costs in Rhode Island, and called on Congress to take action to ease the burden on consumers.

Last week, Congress passed a bill cosponsored by Whitehouse to suspend oil purchases for the Strategic Petroleum Reserve (SPR), a massive stockpile of crude oil owned by the federal government and maintained in the event of a disruption in fuel supplies or other emergency. The President signed that measure this week.

Whitehouse has also cosponsored the Consumer First Energy Act (S. 2991), new legislation that tackles the root causes of higher prices. The bill, introduced by Senate Majority Leader Harry Reid (D-NV), would cut down on market speculation, give the government stronger authority to combat price gouging during energy emergencies, empower the Justice Department to take action against countries that collude to fix oil prices, and levy a windfall profits tax on oil companies that refuse to reinvest in increased capacity and renewable energy sources.


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