Editor's note: This contribution by the late journalist I.F. Stone first appeared in our January 1975 magazine.
November 10, 2005
Republicans didn’t even have the integrity to swear in the oil executives testifying before them.
Why make your contributors liable for perjury charges? (Oil companies give $52 million in campaign contributions, “with 80 percent of that going to Republicans,” according to Sept. 22 Senate testimony by Tyson Slocum, research director of Public Citizen’s Critical Mass Energy and Environment Program.)
But it was a sight, anyway, to see the head of ExxonMobil on November 9 trying to explain away the $10 billion profit his company made in the last quarter.
Lee Raymond, chairman of ExxonMobil, tried to fob it off by saying that oil profits and commodity prices “go up and down” from year to year.
But that excuse didn’t wash.
Even before Katrina, as Slocum noted, oil prices had been jumping, in part because of the consolidation in the oil refinery industry over the last decade. “Recent mergers in the domestic oil refining industry have consolidated control over gasoline, making it easier for a handful of companies to price-gouge consumers,” he testified in September. “In 1993, the five largest U.S. oil refining companies controlled 34.5 percent of domestic oil refinery capacity. . . . By 2004, the top five—ConocoPhillips, Valero, ExxonMobil, Shell, and BP—controlled 56.3 percent.”
And after Katrina, price hikes at the pumps did not seem to come from the invisible hand of the market but from the headquarters of ExxonMobil.
The company, according to some local gas station operators, “raised the wholesale price of its gas by 24 cents a gallon in 24 hours,” the AP reported.
Confronted with that allegation, Raymond didn’t confirm it but said the company tried “to minimize the increase in price while at the same time recognizing if we kept the price too low, we would quickly run out.”
What he didn’t add is that keeping the price too low is not what makes the company huge profits—or gives him handsome bonuses.
He tried to show sympathy for average folks who are suffering, saying he understood that high prices “have put a strain on Americans’ household budgets.”
But everybody didn’t love Raymond’s act.
Barbara Boxer noted that oil execs are swimming in bonuses and told them to their face: “Your sacrifice appears to be nothing.”
For the first time in decades, there’s a groundswell of support for a windfall profits tax on the oil companies. In fact, 79 percent of Americans, according to a recent poll, favor such a tax if the proceeds go to fund alternative energy sources.
If our democracy was working properly—I was going to say well oiled—then a windfall profits tax might stand a chance.