| (Archived Report) May 22, 2007 -
WASHINGTON,
D.C. – Although Americans are paying increasingly high
gas prices and the oil industry is making record profits, the
nation’s top oil companies are not adequately investing
their windfall into projects to help consumers or to ease the
nation’s addiction to oil, instead, the companies’ largest capital expenditure
in 2006 was in stock buybacks and dividend payments. |
| Tyson Slocum, director of
the Energy Program at Public Citizen, testified before
the U.S. House Committee on Energy and Commerce’s
Subcommittee on Oversight and Investigations about gasoline
prices and oil company profits. According to Public
Citizen’s analysis, the top five oil companies have spent
almost $172 billion since January 2005 on stock buybacks and
dividends, and as of April 2007, held nearly $56 billion in
cash on hand. In 2006, the industry leader, ExxonMobil, spent
$37.2 billion buying back its stock and paying dividends to
its shareholders, while spending only $3.3 billion on U.S. oil
exploration and refining.
|
| Slocum also discussed how oil companies can
gouge American consumers because of the consolidation of
energy infrastructure assets and weak or non-existent
oversight of energy trading markets.
|
| “A decade ago, the top
five refiners controlled one third of U.S. capacity. By
2005, because of all the mergers, that increased to 55
percent,” Slocum testified. To hold oil companies
accountable and relieve pressure on consumers from high energy
costs, Slocum urged Congress to:
|
- Repeal all existing oil company tax
breaks, close loopholes allowing oil companies to escape
paying adequate royalties and implement a windfall profits
tax, dedicating the new revenue to financing clean energy,
energy efficiency and mass transit;
- Strengthen antitrust laws by
empowering the Federal Trade Commission to crack down on
unilateral withholding and other anti-competitive actions
by oil companies and re-evaluate recently approved
mergers;
- Establish a Strategic Refining
Reserve to be financed by a windfall profits tax on oil
companies that would complement America’s Strategic
Petroleum Reserve and would be used to provide the nation
with refined gasoline in case of supply disruptions;
- Re-regulate energy trading exchanges
to restore transparency and impose firewalls to stop
energy traders from speculating on information gleaned
from the companies’ affiliates; and
- Improve fuel economy standards to 40
mpg within 10 years to reduce gasoline demand.
|
| “This era of high energy
prices and record oil company profits isn’t a simple case of
supply and demand,” Slocum said. “Reforms to strengthen
regulatory oversight over America’s energy trading markets
and bolster anti-trust enforcement are needed to restore true
competition to America’s oil and gas markets.”
|
