Once again, Big Oil executives were forced to sit for another round of abuse from Congress.
This latest public pillorying of Big Oil appropriately occurred on April Fool’s Day.
Congress can be counted on to replicate this charade whenever gasoline prices spike.
Normally, Congress will angrily order a thorough investigation into price gouging and other skulduggery by Big Oil following one of these Capitol Hill floggings.
This latest televised excoriation of Big Oil occurred before the House Select Committee on Energy Independence and Global Warming.
If the rich history of these events can be a guide, Congress will order another congressional investigation. The public should expect the same result — nothing.
Inevitably, the much-ballyhooed investigations into Big Oil come back with the same findings — market forces, not price gouging, are the reason for the rise, and fall, in the cost of gasoline.
That same finding was reported last year by the Federal Trade Commission after Congress members accused oil companies of conspiring to restrict supplies when gasoline hit $3.02.
Now that gasoline prices are approaching $4 in the midst of a housing crisis, an economic slowdown and a falling dollar, oil executives knew it was time to be ordered back to Washington so Congress members could grandstand for their constituents who want low gasoline prices, no new refineries, low diesel prices, no new drilling, low heating oil prices, no oil company incentives, no new nuclear power plants and a bountiful supply of alternative energy.
That would be nice. Unfortunately, that is not the world we live in.
This time, Congress had the additional ammunition of record oil company profits.
Profits of the five largest oil companies — Exxon Mobil, Chevron, Shell, BP and Conoco Phillips — topped $123 billion last year, up from $30 billion in 2002.
“Your approval ratings are lower than ours — you are down low,” Rep. Emanuel Cleaver II, D-Mo., told the oil company executives.
That’s saying something since Congress’ approval ratings have been consistently lower than those of President Bush, who has racked up some impressively low approval ratings.
Once again it was left to the oil company executives to explain to Congress that they do not control the price of oil, as umpteen congressional investigations have reported.
Oil prices are controlled on the world market by oil supplies that vary widely based on access, disruptions and the hit-and-often-miss search for new supplies.
In addition, the price of oil varies as the demand for the commodity goes up and down.
The well-known forces of supply and demand govern the price of oil, and subsequently the price of gasoline and millions of other products that come from oil.
Congress members have been told this repeatedly from their own investigations. Hope springs eternal, however, that some day America’s most investigated and scapegoated industry will someday be caught cheating and finally justify the periodic drive-by shooting of Big Oil.
This time Congress is threatening to strip the U.S. oil companies of their $18 billion in “subsidies” and require that the money be spent on renewable and alternative energy.
Investing in research and development of renewable and alternative energy is good idea. But trying to fund something based on the volatile commodities market would be unreliable.
Besides, according to the Wall Street Journal, the $18 billion in question actually came from tax deductions authorized by Congress to all manufacturers, not just Big Oil.
Other nations aggressively pursue the development of new oil supplies to fuel their expanding economies. Congress prefers to blame America’s oil companies for the nation’s problems.
Congress can tax and investigate Big Oil until the cows come home. At the end of the day it will have no impact on the price of gasoline.