The Journal

Issue date: 11/17/05 Section: Opinion/Editorial

Andy Dierker

Oil company executives were dragged before a joint hearing of the Senate energy and commerce committees last week to explain their record profits in a quarter where many Americans were crunched by record high prices at the pump. Yet despite the "investigation," little was accomplished except for some politically convenient finger-pointing, done more to drum up applause and votes than to address to the real problem.

It's easy to blame the oil companies. In fact, it's almost irresistible, given all the terrible things they've done to the environment, third world countries and our country. Regardless, are we really supposed to blame them for making money? When you hear ConocoPhillips made $3.8 billion dollars last quarter, you're surprised - until you hear that's only a profit margin of about 7.7 percent, which is pretty normal for companies of that size. And when you consider how that is an 89 percent improvement over the previous quarter, it makes you wonder just how crappy of a quarter they had before.

I'm not trying to make it sound like the guys at Exxon-Mobil or other companies were skipping meals until last month. But if there is proof to the claim that the oil companies were manipulating their prices to gouge consumers, nobody in the Senate bothered to offer any evidence to support it. The whole thing was pretty unproductive.

Instead of venting our frustration of the oil companies, maybe we should consider the unbelievable irony in the hearings altogether. This Senate investigation was done by the same folks that passed massive tax-cuts for the oil companies last summer.

The Energy Policy Act of 2005, which got congressional approval on July 29, gave power companies around $14.5 billion in tax breaks and subsidies. That includes all five of the oil companies that were made to go before congress and explain themselves. Nuclear power industries walked away with $4.3 billion and $2.8 billion went to traditional fossil fuel industries.

In case there's any doubt these cuts were frivolous, keep in mind that these companies were producing record profits. While that shouldn't be a crime on its own, the fact that the government felt the need to pass the industry over $14 billion in a year when they're obviously doing okay for themselves, speaks volumes about who our leaders are really representing. Even Congressman Tom DeLay, R-Tex., took a break from shredding documents to slip in over $500 million in grants that are expected to go to drilling companies in his home town of Sugar Land, Texas.

But what's worse out of all of this, is that this law (which was voted for by both of Missouri's republican senators) was passed with "yea" votes from the chairmen and ranking members of both the energy and commerce committees present. In other words, the senators grilling the executives were the same ones that voted to line their pockets with cash just a few months ago.
So things are looking bad for our elected representatives, but don't worry. The oil executives said the money funneled to them via tax breaks had nothing to do with their record profits last quarter, or any quarter. In fact, they deny that the tax breaks they received had any affect whatsoever, positive or negative.

Is your head spinning yet? Our government is giving money to industries that admit they don't need it and then they drill big oil companies in front of the Senate when the companies make a couple of billion dollars the next quarter.

When money is tight and stress is high, it's hard not to shoot the messenger. If the oil companies were manipulating prices, a real, independent investigation should be the first step in determining that. Baseless accusations and conspiracy theories do nothing but incite even more anger and distrust among all parties involved.
I guess our only hope is that screw-ups like these are enough to push people to head out to the polls next year when some of the politicians responsible are up for re-election. Hopefully we can still afford the tank of gas to take us there.





Andy Dierker, a senior journalism major, is a staff reporter for The Journal.

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