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Oil Companies Report Record Profits

Location: Washington, DC

OIL COMPANIES REPORT RECORD PROFITS -- (House of Representatives - July 27, 2006)

Mr. DeFAZIO. Mr. Speaker, I ask unanimous consent to replace Mr. Emanuel.

The SPEAKER pro tempore. Without objection, the gentleman from Oregon is recognized for 5 minutes.

There was no objection.

Mr. DeFAZIO. Well, today was a big day on Wall Street. The oil companies, the three biggest oil companies, have reported record profits. They are up an average of 30 percent over this quarter last year. They are making $200 million a day in profit.

Now, you would think if the price of crude oil went up, it might squeeze their margins a little bit. No, they are working hand in glove with OPEC and the other producers around the world, and they actually get a premium. For every dollar a barrel it goes up, they add on a little bit more at the pump.

They have closed down a large number of refineries across America at the recommendation of the American Petroleum Institute. They had a memo 10 years ago that they sent out to all their members in the oil industry saying there are too many refineries; the profits aren't there. If you close down some of these refineries, you could claim there was insufficient capacity and you could drive up your profits dramatically.

In the last year, profits for refineries are up 60 percent in 1 year. Now, that is $200 million a day out of the pockets of American consumers, American business, stifling our economy, causing families to cancel vacations or change their plans, and people are having a hard time filling up their tank that live in rural areas in my district just to get to work.

But the oil company execs and their stockholders, why, they are doing just fine. Exxon Mobil has so much cash on hand they don't know what to do with it; over $20 billion of cash. They are not investing in new production, new sources of energy, or new refineries. Hey, they like it the way it is with the so-called refinery shortage. It is a good excuse to gouge people at the pump.

No, they are just plowing it back into their execs pockets and hanging onto cash and then buying back stock to drive up the value of their stock options. The recently retired CEO of Exxon Mobil, Lee Raymond, just retired a couple of months ago, they gave him a $400 million retirement. And now, Mr. Raymond, Americans are struggling to fill up their gas tanks; right? It is hard to afford 50 bucks if you are driving an SUV.

But Mr. Raymond, well, he isn't too worried about that. He is out buying oil fields and gas fields in the Middle East and in Africa. An individual, one guy, got so much money from ExxonMobil from them bleeding extortionate profits out of the American people, that he can afford to buy his own oil and gas fields. And certainly, I am sure, he will sell the capacity to his former employer, ExxonMobil, who will then mark it up handsomely, and they all come out ahead. The only losers are the American consumers.

We need both a short-term and a long-term plan. We need a short-term plan to stop the profiteering and price gouging. We need to regulate oil trading like we do other commodities. We need to put a windfall tax on these companies unless they are investing their ill-gotten gains, their excess profits in new refinery capacity, in new production, and in alternate fuels.

And then we need a long-term plan to make America energy independent and energy efficient. The so-called Bush energy plan will have us importing more oil from the Middle East. Imagine that, more oil from the Middle East 10 years from today than we are today. That is a great place to be dependent upon.

The Iranians are profiting tens of billions of dollars from these high prices. Aren't they part of the axis of evil? The Bush policy is facilitating billions of dollars to the mullahs in Iran.

It is time for America to get smart, and it is time for our government to lead the way to energy efficiency, energy independence, and clamp down on big oil. But we know that won't happen, because 85 percent of the contributions of the oil and gas industry went to the Republican Party. And they were incredibly generous to the President in his last election. And, of course, both he and Dick Cheney are from that industry.

But with a change in Congress and a change in direction, all those things could happen here and, hopefully, they will, in the interest of our country and not a treasured few of the President's friends.

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