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Hearing of the House Select Energy Independence and Global Warming Committee


Location: Washington, DC

REP. MARSHA BLACKBURN (R-TN): Thank you, Mr. Chairman.

I want to thank each of you for coming before us today, and my hope is that our committee will have a reasoned discussion with you and that we will benefit from your experience and from your expertise and insight. I also hope that we're not going to sit here and try to place blame for what may be causing this. We have a problem to solve, and the problem is the high cost at the pump.

Now, since January '07, we have passed new energy taxes, new mandates, new burdens, new regulatory burdens on energy companies, trying to impose and move toward renewable energy, and it would appear that we're not getting the results that we want from some of those actions, because we have seen gas go from ($)2.26 a gallon up to ($)3.29, where it is today. We have seen over a 44 percent increase on the family budget. For every $1 that gallon of gas goes up, that costs a family -- an average family -- about $600 directly out of their pocketbook. You all know the prices of crude, and today they're hovering right around $100.

So there are some that would like to place blame on all of you and would place extra taxes on you, but I've got a question that I would like to pose, and it's this: If we take those actions, if we put more taxes on you and more regulation and more compliance -- would it put this nation at risk for even more dependence on foreign, unfriendly sources of oil? What about a carbon tax or a cap and trade system? What is that going to do to the American public?

We all know that America has the capacity to become energy independent and help lower energy costs. Do we have the national will to do this? We all know we have vast coal, oil and gas resources lying on or within our land and off the coast, and these can be developed. And our allies to the north are developing access to one of the world's largest sources of natural energy resources in the Canadian shale oil. Let's not be shortsighted. Let's put the family first. Let's not let fear grip and manipulate our policies. We have a problem to solve. We need to work together on this. I yield the balance of my time.


REP. BLACKBURN: Thank you, Mr. Chairman. I'm tempted to ask for his extra time, but I won't.

I want to thank you all very much for being here. I am struck by the fact that you've mentioned many times that we have all made choices -- our nation has made choices, when it comes to energy policy, and those choices have consequences, and I think that some unwise choices, 20, 30 years ago are yielding what we are seeing today, and we need to realize that sometimes a policy -- we need to take a long-term view. And I appreciate that you all are willing to come here and sit down with us and begin to get our hands around this problem and get this thing solved.

I want to just ask you one -- a couple of quick things, but I want to start with this. When a consumer buys a gallon of gas and they're paying their $3.29 at the pump, we know that 69 percent of that is going to crude, and if anybody disagrees with this, I want you to pipe up and tell me. We know that 13 percent of that is going for taxes and that 18 percent is there to cover refining distribution cost and marketing. So if -- does anyone disagree with those percentages and allowances? Okay. So would it be true that the government actually makes the most as a single entity out of a gallon of gas, that they are realizing the most? Mr. Simon?

MR. SIMON: That's correct.

REP. BLACKBURN: That's correct. Okay. Because I think it is so interesting that that's where a lot of the money goes, and that is affecting what we're paying at the pump.

I want to come back to a point that was also made about comprehensive strategy, because we have to find out how we're going to deal with this, and I'm going to borrow from you, Mr. Hofmeister. I think you're exactly right, short term, mid-range, and long term. What I would like to hear from you is what you all are doing in each of those categories, and I'm not going to ask for you to sit here and articulate anything right now, because we know some of the things that you are doing for alternatives and for future. I would like to have this in the form of just a one sheet when we are talking with individuals.

You didn't cause all of this problem. Policy has caused part of this problem. You all may be partly to blame. The House and the Senate and the administration can all be partly to blame in this. The problem is we weren't looking far enough down the road early enough to address it, and as I said, that should have been a few years back. We do need to work on something that is a comprehensive strategy for this country that is going to consider supply, demand, that takes into account a global marketplace, takes into account that you all are dealing with companies that are owned by governments, that are not independently owned.

So I'm going to ask you all to submit that to us, what you are doing that you think will give us the greatest impact in the short term, where your mid-range focus is as we look toward 2030 and we look toward our fossil fuel needs moving toward 2030, what you're doing there, the policies that would help us with that, and then long term, the policies and the actions we can take that create the environment for you to do your best. I would like to hear that.

And then my last question that I wanted to touch on -- windfall profits tax, like the ones that were proposed last year. How would that affect your bottom line, and what would it do to fuel prices?

Mr. Malone, I'll start with you, and let's just work down the line.

MR. MALONE: Well, we're investing dollar for dollar in this country, so you take a dollar more in taxes, there's going to be a dollar left available for investment.

REP. BLACKBURN: Very good.

Mr. Lowe?

MR. LOWE: Yes, same for us. It just --


MR. LOWE: -- reduces the amount of supply.


MR. ROBERTSON: I think what this committee's after is increasing the supply of energy, not reducing it. I think that would reduce it.


MR. HOFMEISTER: I think windfall profits were tried before and it has resulted in some of what the problem is we face today -- lack of supply. And I would also say we're dollar for dollar in the United States.


Mr. Simon?

MR. SIMON: I would say the same. The policy, if you tax something, you're going to get less of it.

REP. BLACKBURN: Okay. And Mr. Simon, I want to clarify one thing. In your testimony, you said from '03 to '07 your earnings grew about 89 percent but your income taxes grew by 170 percent; over the last five years, ExxonMobil's U.S. total tax bill exceeded your U.S. earnings by $19 billion.

MR. SIMON: That's correct.

REP. BLACKBURN: That is correct.

MR. SIMON: That's correct.

REP. BLACKBURN: Okay, thank you, sir.

Mr. Chairman, thank you. I yield back.


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