Blame game won't keep price of fuel from rising

Blame game won't keep price of fuel from rising
Senators hold a hearing to chastise oil company executives – again – but there is nothing in the way of solutions.
By KEVIN G. HALL
McClatchy Newspapers

WASHINGTON — In what's becoming a ritual in the nation's capital, top executives of major oil companies took an oath Wednesday before the snapping cameras, received a helping of verbal abuse by lawmakers from both parties and defensively blamed Congress for many of today's energy woes.

While the public relations battle went on in the Senate Judiciary Committee, crude oil prices shot to $133.17 a barrel on the New York Mercantile Exchange. And American Airlines, faced with skyrocketing jet fuel costs, announced that it would sharply scale back its domestic flight schedule.

The Senate hearing might have served as a platform for grumbling on behalf of constituents, but Americans can rest assured that they'll pay more for gasoline in the months ahead.

Setting the tone, Sen. Patrick Leahy, D-Vt., the committee chairman, opened by telling the five oil executives before him that "prices should not skyrocket like this in a functioning, competitive market."

His committee has jurisdiction over antitrust issues like price-fixing.

Over the course of three hours, Democrats pounded away on record profits being posted by oil companies, while Republicans hammered home the point that the United States puts most of its available oil off-limits to production.

The hearing began on a humorous note, when oil executives were asked to restate their personal compensation, which is public record through company filings with regulators.

Several sheepishly listed salaries and compensation between $2 million and $5 million a year.

But John Lowe, executive vice president of ConocoPhillips, couldn’t remember his exact salary.

“I wish I made enough money that I didn’t know how much I make,” Leahy shot back to guffaws in the hearing room. “Do you suppose you might be able to find out how much you make and let us know?”

Ostensibly, the hearing was to focus on legislation being considered by Congress, such as a measure that would give the United States the ability to bring price-fixing complaints against members of OPEC, the cartel of major oil-producing nations.

And it was supposed to focus on whether to raise the minimum investment requirements for speculators who have no intent to take delivery of oil but are pumping billions of dollars into the trading of contracts for future delivery of oil.

But there was little talk of solutions. Most of the hearing was spent on zinging the oil execs, sometimes using props like a giant photo of President Bush holding hands with Saudi Arabia’s King Abdullah, who last week politely rejected U.S. calls for significant new production.

“People listening just don’t get it ... when demand isn’t going crazy, why are prices going crazy?” asked Sen. Herb Kohl, D-Wis., who authored legislation seeking to allow antitrust actions against OPEC.

Oil executives didn’t think that legislation would help much.

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