WASHINGTON, D.C. --- In response to public complaints about the high price of gasoline, Congress again on Tuesday summoned some of the country’s leading oil industry executives to defend their record profits.
The Senate Judiciary Committee hearing marked the second time in four months that the oil and gas industry has faced criticism from both Democratic and Republican senators. Committee Chairman Arlen Specter called the hearings to explore whether industry mergers have contributed to higher gasoline prices for consumers.
According to the New York Times, Specter said he planned to introduce a bill that would scrutinize proposed mergers more tightly to ensure they would not hurt future competition. Further, Specter said he would reconsider some of the $14.5 billion tax incentives provided to the energy industry in last year’s energy bill. His proposed legislation would also permit the U.S. government to take legal action against OPEC for price fixing.
Six oil company executives attended this week’s hearing. Unlike the hearing last November, this time all of the executives were sworn in. They defended the mergers.
Rex W. Tillerson, Exxon Mobil’s chairman and chief executive, was quoted by the Times as saying: “With respect to the committee’s specific question --- whether mergers and acquisitions in our industry have contributed to higher prices at the pump --- my answer is no.” He added that the risks and technology development necessary to provide Americans with greater energy access and security require that industry companies have such scale and financial strength.
Exxon Mobil formed in 1999 from the merger of Exxon and Mobil. In 2005, the company earned net income of $36.1 billion.
The Times cited a Government Accountability Office report that said the oil and gas industry has seen 2,600 mergers since 1991.
Originally posted on Fleet Financials