October 25, 2005
|GOP To Target Big Oil Profits|
GOP to target Big Oil profits By Stephen Dinan THE WASHINGTON TIMES Published October 25, 2005
House Republicans, worried about political fallout from the high-profit figures that oil companies are expected to release later this week, will demand that companies pour those profits into refining more oil for the U.S. market in order to lower prices. At a press conference today, Republicans led by House Speaker J. Dennis Hastert will tell the companies to explain why they are making so much money and what they will do to bring down the cost of gasoline. "Big Oil needs to do its part. Increasing capacity and improving refineries will do much to boost supplies so that consumers do not feel such a big pinch," Mr. Hastert said in prepared remarks obtained last night by The Washington Times. "These are extraordinary times that call for extraordinary measures. We expect oil companies to do their part to help ease the pain American families are feeling from high energy prices," he said. Oil companies begin releasing figures on their third-quarter financial performances this week, and analysts expect the major corporations to show a nearly 50 percent increase in profits from the same period in 2004. Mr. Hastert said the companies must tell consumers when new refineries will be built, when an Alaska pipeline deal will be signed and whether companies are "doing everything they can to make sure consumers get a fair deal on energy costs." Hastert spokesman Ron Bonjean said Republicans are also considering holding hearings to get answers from oil company executives. Michael McKenna, a Republican strategist who lobbies on energy issues, said oil companies should look at Republicans' new stance "with the maximum amount of nervousness." "The next stop on this train is legislation," he said. "We could go back and forth over whether that legislation is going to be successful, whether it can pass or not, whether it's constitutional. But if you're an oil company, do you want to spend the next six months talking about a windfall profits tax? "This would be a good moment and a nice opportunity for the oil companies to step forward and do something proactive," Mr. McKenna said. Democrats already have gone further than Republicans. Sen. Byron L. Dorgan, North Dakota Democrat, has introduced a windfall profits tax that would take 50 percent of profits from every barrel of oil sold for more than $40. For now, Republican leaders remain opposed to that. "We're not inclined [to do that], because we believe creating new taxes would cost American jobs and encourage these companies to move operations and investments overseas," Mr. Bonjean said. Oil industry representatives have said such a tax would discourage new oil production in the United States. They say a windfall profits tax after the oil shortages of the 1970s curtailed U.S. production. But the pressure is growing on Republicans to distance themselves from oil companies, or at the least to demand that oil companies explain their profits and how they plan to lower gas prices. "What I haven't heard is a consistent answer that makes good sense both from a policy and a political perspective. That's the kind of thing Republicans are going to need, because they're worried right now," Mr. McKenna said. Republican lawmakers have returned from weekend and recess trips, saying that they are hearing all sorts of complaints from constituents about the cost of gasoline and that most voters think oil companies are gouging consumers. In a mid-October survey, Republican pollster David Winston found that nearly twice as many voters blame price gouging for the high cost of gasoline than those who blame other causes. His poll of 1,000 registered voters found 59 percent blamed "price gouging by oil and gas companies," while 33 percent blamed "rising demand for oil and gas, as well as the damage to refineries from the recent hurricanes."