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Senate Democrats peppered the executives of the five Big Oil companies with uncomfortable and politically loaded questions Thursday — but the CEOs didn’t buckle.
With the nation facing gas prices over $4 a gallon and oil companies raking in record profits, the CEOs — testifying at a Senate Finance hearing — stood firm against giving up any of their current tax breaks, warning that any reduction would likely lead to less supply and make American companies less competitive.
But Democrats lit into the executives from ConocoPhillips, Exxon Mobil, BP America, Chevron and Shell for defending their tax breaks while their profits rocket over $100 billion a year, their customers struggle to buy their product, and a host of programs from Medicare to student loans are potentially on the chopping block. Democrats have said eliminating the oil company tax incentives would help them in their quest to cut the deficit.
“I think you’re really out of touch,” said oil family scion Sen. Jay Rockefeller (D-W.Va.), who implored the witnesses to find something that they were willing to do without.
Sen. Ron Wyden (D-Ore.) showed a video from an earlier Senate hearing with the CEOs in 2005, where they agreed that they did not need subsidies to explore for oil.
“You told me you didn’t need them at $55 (a barrel),” Wyden said.
The CEOs contended that they don’t get subsidies.
“It’s not a subsidy, it’s a legitimate tax credit,” Exxon Mobil CEO Rex Tillerson said. Tillerson said many of the tax provisions apply to other companies as well, and oil and gas companies shouldn’t be singled out.
Sen. Charles Schumer (D-N.Y.) asked the executives which was more important — Pell Grants for students or tax breaks for oil companies.
And Schumer and Sen. Bob Menendez (D-N.J.) both lit into James Mulva, the chairman and CEO of ConocoPhillips, for a press release calling the Democratic proposal to eliminate the tax breaks un-American. Menendez is the lead sponsor of the bill.
Mulva said that the press release wasn’t meant personally, but he didn’t apologize. Mulva and the other CEOs said that the government would get far more revenue and create far more jobs if they opened up more land for drilling and made it easier to drill than they would by raising their taxes.
They found an eager defender in Finance ranking member Orrin Hatch (R-Utah), who ripped Democrats for pushing a bill that won’t reduce gas prices or increase energy supplies.
“It will not bring down the price of gas one penny. In fact, it’s likely to go up,” Hatch said.
Hatch ridiculed the hearing as nothing but a dog-and-pony show — to the annoyance of his Democratic colleagues.