04.27.06

Exxon Posts Another Quarter of Sky-High Profits as Republican Leaders Push More Oil Company Loopholes

Provision buried in Republican leadership proposal would exempt Exxon Mobil and other big oil companies from gas price-gouging lawCantwell seeks bipartisan agreement to implement consumer protections, invest in alternative fuels, and increase energy market transparency

WASHINGTON, DC – Thursday, as Exxon Mobil announced first quarter profits of $8.4 billion, U.S. Senator Maria Cantwell (D-WA) urged her colleagues to work together to pass legislation to improve energy market transparency, make gas price-gouging a federal crime, and adopt an aggressive approach to alternative fuels development. Cantwell also blasted a Republican energy proposal submitted late Wednesday night that would exempt Exxon Mobil and other large oil companies from heightened scrutiny of industry practices.

“Rather than cracking down on profit-rich companies like Exxon, the Republican leadership plan goes after the small mom and pop retailers who are often at the mercy of big oil,” said Cantwell, a member of the Senate Energy and Commerce Committees. “Quarter after quarter, oil companies post unheard-of profits at the expense of farms, businesses, and family budgets across Washington state and throughout the country. We should be shedding light on oil industry practices, not giving oil companies a free pass and a pat on the back. Carving out exceptions for oil companies when we don’t even have a clear picture of how energy markets work is not in the best interest of American consumers. We need to figure out what’s behind these prices and work together to put stronger consumer protections on the books if we’re going to break big oil’s stranglehold on our economic future. ”

A proposal submitted by Senate Republican leadership would exempt oil companies in the wholesale market from a definition of gas price-gouging. By exempting wholesale activities, the Republican language fails to outlaw price-gouging by major oil producers who increase the cost of gasoline before they sell it to local retailers.

Without forcing any additional transparency on the part of the oil industry, this proposal would exempt from price-gouging laws any gas price manipulation that occurs during the refining process, supply chain, or at any other point prior to delivery of the gas to a gas station. In the aftermath of Hurricane Katrina, Exxon dealers in the Mid-Atlantic region raised concerns about the oil giant raising wholesale price to service stations by 24 cents in a 24-hour period. The Republican leadership proposal would put these independent retailers, not big oil companies, on the hook for dramatic price increases.

Earlier this week, ConocoPhillips and BP posted first quarter profits of $3.3 billion and $5.6 billion respectively. Exxon Mobil’s $8.4 billion profit, up 7 percent from one year ago, comes on the heels of a record breaking 2005 total profit of $36 billion—more than any other company has ever earned during a single year.

Cantwell has proposed a national gas price-gouging ban, supported by 13 Republicans, that would outlaw gas price-gouging at all levels, impose tougher fines and criminal penalties on violators, and give federal and state authorities new powers to ensure greater market transparency and go after companies that manipulate oil and gas prices. She is also the cosponsor of legislation to enhance the transparency of energy commodity trading—80 percent of which is taking place beyond the reach of federal regulators, thanks to the “Enron loophole” in U.S. commodity trading laws. Cantwell has also sponsored legislation to set a national goal of reducing domestic oil consumption equivalent to 40 percent of America’s projected imports in the next 20 years, and has authored a measure that would require more accurate consumer information on the fuel efficiency of new vehicles. Cantwell has been a consistent advocate of measures to promote greater use of domestically produced biofuels, increase the availability of flex-fuel vehicles on American roads, and improving national fuel economy standards.

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