Top executives from five major oil companies appeared before the Senate Energy and Commerce Committee on Wednesday, Nov. 9, to defend the oil industry against charges of price gouging in the wake of record profits.

Senators from both parties grilled the executives – who were not under oath – demanding that they explain their record profits at a time when most Americans are faced with the possibility of record heating bills in the winter months to come.

“None of us know exactly what is happening with respect to pricing,” said Sen. Byron Dorgan, D-ND. “We see the pain of the consumers, and we see the gain of the companies.”

Lee Raymond, chairman and CEO of ExxonMobil, defended the oil industry, claiming that the hurricanes exacerbated the situation and drove prices up. In addition, he said that the world market – something over which the oil companies have no control – has been a contributing factor.

“The U.S. is just one of many players on the world stage that effect petroleum prices,” he said. “That’s the reality that we’re in.”

Some senators used their allotted time for asking fewer questions and expressing more outrage at the oil companies.

Barbara Boxer, D-CA, pointed out that, while ordinary citizens were faced with skyrocketing gas prices, the executives present at the hearings were earning multimillion-dollar bonuses.

Boxer said the average American makes $23,276 per year, while ExxonMobil’s Raymond received a $4 million bonus in addition to his multimillion-dollar base salary.

“Working people struggle with high gas prices and your sacrifice, gentlemen, appears to be nothing,” Boxer said.

Several Senators raised the issue of diesel prices, including Conrad Burns, R-MT, and Larry Craig, R-ID. Both senators expressed concern about the effects the rising cost of diesel is having on farmers in their states.

“Farmers are seeing horrendously large input costs today,” Craig said. “They are very, very frustrated. While the gas prices in Idaho are moderating, the diesel prices are just sitting there.”

In the end, the executives denied any charges of price gouging or other wrongdoing, claiming that they were simply responding to the normal supply and demand of the marketplace.

In addition, they pleaded with lawmakers to avoid taking any hasty measures in dealing with oil prices. They also asked for more freedom to expand oil exploration and refining capacity, with fewer restrictions from the government.

– By Terry Scruton, senior writer
terry_scruton@landlinemag.com