Posted on 02/01/2006 9:32:23 AM PST by GeneD
WASHINGTON (Reuters) - The chairman of the U.S. Senate Judiciary Committee said on Wednesday that Congress would attempt to address growing concerns about rising fuel prices and soaring oil industry profits. "We intend to do something about" rising prices to consumers, Chairman Arlen Specter said at a hearing into whether oil industry mergers in recent years have made gasoline more expensive at the pump.
Specter, a Pennsylvania Republican, said he was shocked by the size of oil company profits, adding, "It just may be time to legislate in this field."
After the hearing, Specter raised the possibility of modifying federal antitrust laws to impose tougher oversight on mergers in the industry and crack down on any abuse of market power.
Further investigation was needed before reaching any final conclusions, Specter told reporters, but the number of mergers in recent years has been "excessive on its face."
"There are a lot of red flags out there," he said, referring to rising prices and record industry profits.
Exxon Mobil Corp. said Monday it earned $10.7 billion in the fourth quarter of last year and $36.1 billion for all of 2005 -- bigger than the economies of 125 countries.
Some industry critics have called for an excess profits tax.
Sen. Mike DeWine, chairman of the committee's antitrust subcommittee, said the biggest reason for the spike in fuel prices to consumers was rising crude oil prices.
DeWine, a Republican from Ohio, called for conservation measures and use of alternative fuels. "Try as we might, we simply can't drill our way out of this crisis," he told the hearing.
President George W. Bush said the United States was "addicted to oil" in his State of the Union speech on Tuesday, and called for developing alternative energy sources, such as ethanol-blended gasoline and hydrogen fuel cells.
Officials from six major oil companies refused to testify at the hearing. Specter criticized their failure to appear and said he might seek subpoenas to compel their testimony.
The Judiciary Committee had asked representatives from Exxon Mobil, Chevron Corp., ConocoPhillips, Valero Energy Corp. and the U.S. units of BP Plc and Royal Dutch Shell Plc to tell their side of the story.
William Kovacic, a member of the U.S. Federal Trade Commission, told the hearing that most sectors of the petroleum industry remained unconcentrated or moderately concentrated.
The FTC is investigating whether oil companies manipulated gasoline prices and oil refining production levels. The agency plans to finish its probe and send its findings to Congress this May.
And with the government, that return is on zero investment or producing revenue. Technically, that is a return of 0% due to the multiplier being a 0. I like to think of it as the same return a theif makes after a score.
BTTT
Higher taxes help no one but the government. And price controls help no one at all. Take down the barriers to refinery building, and break up the conglomerate through anti-trust action when solid evidence of collusion is discovered.
Why, they profited! We can't have profits!
Bingo. Well put.
Specter is trying to save the republican party. All this talk about free market capitalism vs communism isn't going to mean much if the dems sweep everything in 06 and 08 because people are pissed at oil companies.
I was really shocked by the size of Republican Specter's war chest for election. Millions kept in the pot to keep Specter on office for life. No politician should be able to keep that much money aside for himself. There should be an investigation. Many of us think Specter hid his illness last election. That was really ugly.
Also, if the company maintains the same profit margin their profit goes up as well.
If Company A has expenses of $1MM to produce their product and has a 10% profit margin, they profited $100K. Now due to market conditions, the expense to produce the same product goes to $2MM and they maintain their 10% profit margin, their profit is now $200K.
Hopefully Specter is just talking, to placate the idiots. Just as long as he doesn't do anything, fine.
The real problem, of course, is that if they cripple the American oil companies, we will be stuck with really corrupt foreign oil companies run from Europe or Russia. Without Exxon Mobil and the other American companies, we'd really be in trouble.
Well with just about every job in construction now being done by ILLEGAL ALIENS what is the size of profits builders are making off of LEGAL Americans.
Put all together it's probably more than our LEGAL OIL comps.
If these jerk politicians had their way we'd all be driving around in little Yugos with the trunk and back seat loaded down with batteries. We'd have to stop and plug in to recharge after 40 miles. You won't see these mutts reduce the tax on the fuel though and they won't stop using their chauffeur driven SUV's.
Exactly!
And how about doing some legislating where it would do some good, like allowing drilling where we know there is more oil, like ANWR and off the Calipooia and Western Florida coasts?
And how about allowing the construction of some more refineries? Or standardizing the fuel blends so that there can be more sharing between the states when something like a hurricane happens?
NO NO NO NO NO. Government rugulation of business's never ever ever works -- Can't these morons get that through their thick skulls.
Typical Reuters - and Snarlin Spectre - B.S.
How about legislating in anwr? Drill more oil. Greater supply, lower prices.
Pleeeeze. Specter and the Dems are so yesterday.
Doesn't Specter have some trunk murderer to defend?
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