GOP leaders call on oil companies to invest profits to produce more oil, gasoline.
WASHINGTON – House Republican leaders, fearing a political backlash over huge oil industry profits, urged the industry on Tuesday to use its wealth to build new refineries and pipelines.”These companies need to invest in America’s energy infrastructure and resources. … The oil companies need to do their part,” House Speaker Dennis Hastert, R-Ill., said at a news conference called to address high oil prices and corporate profits.The largest oil companies are expected in the coming days to announced huge profits from July through September, despite heavy damage to oil and gas production in the Gulf Coast because of Hurricanes Katrina and Rita. During those months, gas prices rose above $3 per gallon and crude hit $70 a barrel, although both measures have declined in recent weeks.Some industry analysts have predicted combined profits of more than $20 billion by the five largest oil companies during the quarter. London-based BP PLC on Tuesday reported a 34 percent increase in profits in those three months, to $6.53 billion.Congressional Democrats are faulting Republicans for failing to address what many consumers view as price gouging. So GOP leaders took the offensive Tuesday, while also saying they saw little that Congress can do beyond jawboning oil company executives.Hastert dismissed the calls by a number of Democrats for a tax on oil companies’ windfall profits.”Oil companies are enjoying record profits. That’s fine. This is America,” Hastert said. But he added the companies should invest some of that wealth in ways that will produce more oil and natural gas in this country.The suggestion brought a sharp response from free market advocates.Iain Murray, a senior fellow at the Competitive Enterprise Institute, said the GOP leadership was “trying to salvage its flagging fortunes by making the energy industry its scapegoat.” He said Hastert’s attempt to tell oil companies how to spend their money was “nothing less than central planning of our economy.”But Rep. Deborah Pryce, R-Ohio, head of the House Republican Conference, said the high price of energy “has us reeling” and “oil companies have to do their share” to find ways to produce more.Hastert’s office cited recent opinion polling that suggests the public believes that the high pump prices are a result of price gouging and that the profit reports will reinforce that view, with the potential for a political backlash.The House this month approved, by a narrow margin, legislation aimed at spurring refinery expansion and new construction. Democrats contended the measure was an unneeded subsidy to already cash-rich oil companies and that it would allow the refiners to avoid environmental requirements.The Senate is expected to begin work this week on its own version of a bill on refinery incentives.Some congressional Democrats are pushing a windfall profit tax, measures to counter the concentration of the refining industry and steps to address energy price gouging.GOP leaders say such efforts are unnecessary.Rep. Eric Cantor, R-Va., a member of the House leadership, said his constituents are perplexed when they “are seeing the pinch” of higher gasoline and winter heating costs and also read of record oil company profits.Still, he says, he is adamantly opposed to taxing such profits.”Profit is not a dirty word in America,” Cantor said.John Felmy, chief economist at the American Petroleum Institute, which represents the major oil companies, said the industry in the coming years has plans to invest $86 billion in projects, from marketing to refinery expansions to new oil exploration and production.”We are an industry already doing a lot … we’re already investing vast amounts,” Felmy said in an interview.Vail, Colorado