Energy Companies Feel the Heat on the Hill

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By Shailagh Murray and Charles Babington
Tuesday, November 8, 2005

With voters fuming about high fuel prices, two Senate committees want answers from oil company executives about why they are ringing up record profits.

Senior officials from ExxonMobil Corp., Chevron Corp., ConocoPhillips, BP America and Shell Oil Co. are to appear tomorrow before a joint hearing of the Energy and Commerce committees, to try to deflect a push by Republicans as well as Democrats for anti-price-gouging legislation, including a windfall profits tax.

The executives will be asked to explain why prices for oil, gasoline and natural gas have spiked, to outline the reasons behind massive third-quarter 2005 corporate profits, and to describe how they will deal with future increases in global demand. Later, the committees will hear from Federal Trade Commission Chairman Deborah Platt Majoras and state attorneys general about which federal and state consumer protection laws are effective in preventing price gouging.

The hearing suggests that Republicans are feeling vulnerable on energy issues, having approved an energy bill this summer that was highly favorable to the oil and natural gas industry.

Senate Majority Leader Bill Frist (R-Tenn.) called for the Wednesday panel and said recently, "If the facts warrant it, I will support a federal anti-price-gouging law." House Speaker J. Dennis Hastert (R-Ill.) has not ruled out a windfall profits tax; he told the Chicago Tribune that he would hold his own meeting with oil company executives this week "to look them eyeball to eyeball" on prices and demand answers.

Among the growing chorus of critics is Sen. Charles E. Grassley (R-Iowa), who has written to leading gas and oil trade associations urging them to contribute a portion of profits to programs that supplement the government's Low Income Home Energy Assistance Program. "It seems only logical for the companies to practice good corporate citizenship by helping low-income families and seniors," Grassley said. His interest is particularly worrisome for the industry, given that he chairs the tax-writing Finance Committee.

And Democrats, sensing a winning voter issue, are jumping all over the subject. Sens. Byron L. Dorgan (N.D.) and Christopher J. Dodd (Conn.) may seek to add a temporary 50 percent excise tax on the sale of oil over $40 a barrel to a tax bill that the Senate is expected to begin discussing this week. The money raised from the tax would be rebated to consumers.

The American Petroleum Institute is fighting back with a 14-page document, "Industry Earnings in Perspective." It argues that the profits are in line with those of other industries. It also notes that hurricanes Rita and Katrina resulted in capital losses of $18 billion to $31 billion, according to the Congressional Budget Office. "Today's earnings go to tomorrow's energy needs," the document says.

House, Senate to Tackle Interrogations

Debates over military appropriations and authorization usually focus on weapons procurement, troop strengths and spending levels. This week, however, Congress and the administration are wrangling over the treatment of detainees and the use of prewar intelligence about Iraq.

The White House is struggling to keep the House and Senate from restricting the interrogation methods that U.S. officials can use against terror suspects held in Iraq, Guantanamo Bay and elsewhere. Many lawmakers from both parties say the nation is suffering from allegations that it tortures detainees, and they are trying to amend the Defense Department's authorization or spending bills to force the administration to accept stricter guidelines.

Last month, the Senate voted 90 to 9 to amend the fiscal 2006 defense appropriations bill by requiring U.S. interrogators to abide by the Army Field Manual and to refrain from using cruel, inhuman or degrading treatment. When President Bush threatened to veto the $440 billion bill, the Senate attached the same language -- sponsored by Sen. John McCain (R-Ariz.) -- to the defense authorization bill by voice vote.

"Torture doesn't work," McCain, who was a prisoner of war in Vietnam, told "Fox News Sunday." "How many people turn against the United States of America when they hear that we are torturing people?"

The Senate will spend much of this week tackling other amendments to the authorization bill, including one pushed by Minority Leader Harry M. Reid (D-Nev.) and Carl M. Levin (Mich.), ranking Democrat on the Armed Services Committee. Their amendment calls for an independent panel, modeled after the Sept. 11 commission, to look into the Bush administration's use of prewar intelligence on Iraq and its efforts "to question and criticize its critics."

In the House, Hastert has backed Bush's effort to defeat McCain's language on interrogations, but lawmakers in both parties say there is widespread support for the restrictions. Meanwhile, Hastert has yet to name House members to a conference committee assigned to reconcile the House and Senate versions of the military spending measure.

© 2005 The Washington Post Company

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