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Rising Gas Prices, Record Profits Prompt Renewed Call By Pallone To End Subsidies and For Oversight of Speculators

Press Release

Location: West Long Branch, NJ

$4 Billion In Big Oil Tax Breaks Should Go To Renewable Energy

With steadily-increasing gas prices coinciding with record-setting profits for the top oil companies, U.S. Rep. Frank Pallone, Jr. on Thursday joined with consumer advocates, environmentalists, and the American Automobile Association to advocate for short- and long-term actions to keep prices at the pump in check, to prevent market speculators from profiteering and to further develop alternative energy sources.

Pallone said the financial hardship for motorists could cause economic damage to Shore communities during the summer tourism season.

The average price at the pump in New Jersey has reached $3.78 a gallon, up from $2.74 a year ago.

The top oil companies this week are reporting record profits for the first quarter of 2011. ExxonMobil, the largest U.S. oil company, today reported astronomical profits of $10.7 billion for the first three months of the year, a 69 percent increase over the same timeframe last year. ConocoPhillips, the third-largest oil company, grabbed $3.03 billion in profits for the first quarter, a 44 percent increase. And Haliburton made $5.3 billion, a 71 percent increase compared to last year.

The oil companies receive $4 billion annually in taxpayer-supported subsidies.

"There is no way to justify subsidies for Big Oil at the same time they are making record profits," said Pallone. "Motorists are experiencing pain at the pump while the oil industry enjoys subsidies at the expense of taxpayers. These subsidies should be revoked and the money used to develop alternative energy sources."

Pallone said that oil speculators need to be kept in check.

"Industry experts say that speculators have added an additional $15 to the cost of each barrel of oil," said Pallone. "Just like the bankers on Wall Street needed oversight, the commodity speculators need to be policed to prevent profiteering and to protect consumers."

Recent banking reforms would provide the Commodities Futures Trading Commission with the additional resources to better police the market. The new Republican House majority is attempting to deny these funds, which would force massive layoffs at the CFTC.

At the same time action is taken to address rising gas prices, we need to further develop alternative energy sources, Pallone stressed, and using money that was going to Big Oil is an appropriate way to devote resources to get it done.

"Oil prices are inherently unstable, " Pallone said. "Reducing our reliance on oil imports has significant long-term benefits to the economy, the environment and national security."

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