When oil-company profits surged last year, Congress staged a two-ring circus. So what happens now that profits are crashing?
The circus played first on Apr. 1 in the House Select Committee on Energy Independence and Global Warming. Chairman Edward J. Markey (D-Mass.) summoned executives of five major oil companies to parry questions that were really political barbs aimed at Republican President George W. Bush.
“Big Oil’s profits have more than quadrupled over the last 6 years,” Markey complained. The price of oil was less than $20/bbl when Bush took office but had risen above $100/bbl, he pointed out, not bothering to mention the contrasting market strains at work during those points in time.
Markey was, of course, simply exploiting oil-price restiveness to discredit an opposition-party president through association with an unpopular industry
The circus performed next in the Senate Judiciary Committee, where Chairman Patrick J. Leahy (D-Vt.) asked the same five executives “how all of you can justify such exorbitant profits on the backs of the middle class and hard-working families.”
Again, the target was Bush.
“The president once boasted that with his pals in the oil industry, he would be able to keep prices low and consumers would benefit,” Leahy said. “Instead, it appears to be his friends in the oil industry who have benefited.”
Like Markey’s, Leahy’s hearing favored insinuation over insight.
It shouldn’t require a congressional hearing to establish that oil company profits rise when oil prices increase.
What the likes of Markey and Leahy won’t acknowledge is the reverse case.
With oil and gas prices this year down from year-earlier levels, oil company profits are plummeting.
For the record, here are the just-reported second quarter-to-second quarter earnings declines for the companies used as congressional stage props last year: Shell 67%, ConocoPhillips 76%, Chevron 79%, BP 53%, and ExxonMobil 66%.
Markey and Leahy won’t hold any grateful hearings about this retreat from supposed exorbitance and what it means for hard-working families, of course.
Congress has found a new class of oil-price menace onto which to heave bombastic scorn. Now “speculators” are in the ring.
(Online July 31, 2009; author’s e-mail: email@example.com)