With gas prices in the headlines and the Presidential election around the corner, Barack Obama, Hillary Clinton and various other Democrats have decided once again that “Big Oil” is America’s single greatest enemy. Well if they were really serious about lowering the cost of gas they would start by cutting the amount of tax added to price of one gallon.
Taxes add a significant amount to the price of gas and vary widely by state. For the first quarter of 2008, the average state gasoline tax is 28.6 cents per gallon, plus 18.4 cents per gallon federal tax making the total 47 cents per gallon. For diesel, the average state tax is 29.2 cents per gallon plus an additional 24.4 cents per gallon federal tax making the total 53.6 cents per gallon.
It scares the pants off me that so many people have such a fragile grasp of even the most basics of economics that they buy into the hogwash politicians peddle to gain votes.
Capitol Hill Democrats yesterday chastised executives of five big oil companies for not doing enough to curb skyrocketing gasoline prices and investing too little in renewable energy, as pump prices hit a record high.
“Today, on April Fool’s Day, consumers all over America are hoping that the top executives from the five largest oil companies will tell us that these soaring gas prices are just part of an elaborate hoax,” said Rep. Edward J. Markey, Massachusetts Democrat and chairman of the House Select Committee on Energy Independence and Global Warming.
“Unfortunately, it’s not a joke.”
Rep. Emanuel Cleaver II, Missouri Democrat, said Americans’ “anger level is rising” for having to pay more than $3 per gallon for gasoline.
“Your approval ratings are lower than ours [in Congress] — you are down low,” Mr. Cleaver told the oil executives.
Profits of the five largest oil companies — Exxon Mobil, Chevron, Shell, BP and Conoco Phillips — topped a record $123 billion last year, up from $30 billion in 2002.
The oilmen told the committee that their companies’ profits are in line with other industries, and warned that higher taxes or excessive government regulation would do nothing to lower gas prices.
“Imposing punitive taxes on American energy companies, which already pay record taxes, will discourage the sustained investments needed to continue safeguarding U.S. energy security,” said J. Stephen Simon, senior vice president for Exxon Mobil.
Motorists voiced disgust with prices at the pump, which hit a record of $3.29 a gallon and could eclipse $4 a gallon when the peak summer driving season starts.
“The gas dealers are making their money,” Maryland motorist Walter Haselrig grumbled as he pumped gas at a Citgo station on New York Avenue in Northeast. “They’re making profits. High profits. Never before in the history of America has the industry made that kind of money.”
Michael Smith, an Anne Arundel County resident who drives 50 miles a day to and from his job in the District, blamed high gas prices on the war in Iraq.
“They’re going to keep going up because we’re over there fighting a war that’s not ours,” he said. “We had an agreement with them and we broke that agreement, so now we’re paying.”
Rising pump prices have put added pressure on a U.S. economy already beleaguered by an imploding housing market and recession fears, while oil-company profits surge.
The committee heard testimony from officials at Exxon Mobil, BP America, ConocoPhillips, Shell and Chevron oil companies in what is expected to be the first of several congressional hearings this year.
Many committee members urged the companies to invest more in biofuels, wind and solar power and other renewable energy sources in order to wean the country off its dependency on fossil fuels, specifically foreign oil.
Rep. Earl Blumenauer, Oregon Democrat, encouraged oil companies to replace oil with renewable alternatives as the industries’ main fuel source within the next 10 to 15 years. And Mr. Markey suggested that oil companies should invest 10 percent of their profits in alternative fuels.
But the oil companies said that despite millions of dollars invested for the development of renewable energy, oil will remain the world’s dominant energy source for decades.
“We are in a fossil-fuel environment for some time,” Chevron Vice Chairman Peter J. Robertson said.
Mr. Simon said that even by 2030, oil and gas still will handle about 54 percent of the world’s energy demand.
Several committee members criticized Mr. Simon and Exxon Mobil for investing billions in researching new oil sources but little on “clean” energy fuels that would help reduce greenhouse emissions.
“If you don’t put research dollars into [clean energy sources], is it going to come from the oil fairy?” said Rep. Jay Inslee, Washington Democrat. “We’ve got to put some real money into this.”
But Mr. Simon said oil “is in our equation” and that his company is “focusing on how to make that oil much more efficient.”
Republicans on the committee also acknowledge the public frustration over the rising oil prices, but many tempered their criticism of the oil companies.
“My hope today is that the committee will have a reasoned discussion with you today and that we will benefit from your experience and your expertise,” Rep. Marsha Blackburn, Tennessee Republican, told executives. “I also hope that we’re not going to sit here and try to place blame for what may be causing this.”
Rep. F. James Sensenbrenner Jr. of Wisconsin, the committee’s ranking Republican, reminded the panel that oil companies “create a lot of good jobs, and their expanded investment in market-driven research and technology only serves to create more jobs.”
House Minority Leader John A. Boehner, Ohio Republican, mocked the hearing by distributing a fake news release yesterday that featured fabricated testimony from Venezuelan President Hugo Chavez thanking House Democrats for passing a recent measure that reportedly would benefit Venezuela’s state-owned oil giant, Citgo.
Related:
200 Billion Barrels Of Oil That Could Make The U.S. Energy Independent
