(Host) Senator Patrick Leahy sharply questioned the executives of America’s five biggest oil companies Wednesday about the rising price of oil.
Matt Laslo reports from Washington.
(Laslo) Senator Leahy says the biggest thing on his constituents’ minds is oil.
(Leahy) "When I was home in Vermont I heard more than anything else the price of a gallon of gas."
(Laslo) In Vermont, the average just hit $3.70 a gallon. Leahy blames the oil companies.
(Leahy) "Why has the price of oil increased nearly 400% since President Bush took office? Why has it nearly doubled in the last year alone? We have seen it go up six years in a row – first time that has ever happened. Prices should not skyrocket like this in a properly functioning competitive market."
(Laslo) But the oil executives disagree. They testified that the global markets dictate that price, not them. Stephen Simon is the Senior Vice President of Exxon Mobil. He told the Judiciary Committee the sudden increase in oil prices needs to be placed in context.
(Simon) "Our profitability in absolute terms is large, but it must be viewed in the context of the massive scale of our industry and our dependence on high earnings in the current up-cycle to sustain the huge investments required over the longer term."
(Laslo) Simon says Exxon Mobil spends $1 billion a day on its equipment and refineries. Leahy disagreed with Simon’s argument that the industry is at the top of a price cycle.
(Leahy) "As I listen to your testimony, we should almost be embarrassed to even ask questions of you. And the way you speak of this current up cycle – what a nice term. And I suppose we can tell our constituents that when they find that they can’t afford to go to work because of the price of gas, `Don’t worry, you’re in a current "Up-Cycle.""
(Laslo) Congress has already passed a bill to stop filling the strategic petroleum reserve. Leahy supports having the Justice Department investigate how oil company speculation may be driving up the cost. That bill has been around for nearly a decade. Experts don’t expect it to go anywhere now. Republicans and the oil executives say increasing domestic oil drilling will boost supplies and bring the price down.
For VPR News, I’m Matt Laslo on Capitol Hill.