The same day Members of Congress blamed high gas prices on the oil companies and their excessive profits, congressional leaders gave up trying to allow oil drilling in the Arctic National Wildlife Refuge.
At the same time oil companies were blistered in Senate hearings because their companies earned hundreds of millions of dollars in the recent quarter of 2005, the Tax Foundation’s Scott Hodge reported that in the last 25 years, oil companies paid more than $2.2 trillion (that’s right trillion) in taxes to federal and state governments. That’s more than threefold the oil companies’ profits in the same period.
Conoco Philips reported third-quarter profits of about $3.8 billion, for a profit margin of 7.7 percent on sales. That so-called excessive profit compares with an average of 7.9 percent for all, I repeat all, U.S. industries. For every dollar in sales ExxonMobil makes 9.8 percent in profits. But McDonalds and Coca-Cola made 13.8 percent and 21.2 percent respectively. Google made 24.2 percent and Merck, Bank of America, Microsoft and the Citigroup all made much, much more. In fact, two of the nation’s largest newspapers chains grumble when they don’t make over 15 percent on sales.
Quite frankly the oil and natural gas industries are less profitable than banks, pharmaceuticals, software companies, the telecommunications industry and many more.
It’s simple. Oil companies are not the cause of high gasoline prices. Make no mistake — the main cause of high prices and our domestic energy shortage is that for decades liberals in Congress and the environmentalists push tax increases on fossil fuels and oppose nearly every effort to increase domestic supplies of oil and gas. Former Indiana Rep. Roger Zion (1967-75), honorary chairman of 60 Plus and early ‘70s chairman of the House Republican Task Force on Energy, recently said: “Nevermind the huge strides made in clean coal technology, we get stifling opposition; nevermind the extraordinary safety record of nuclear power plants, we get regulation; nevermind conservation efforts while drilling for more capacity offshore in the East, West and Southeast Coasts, we get blocked access; nevermind conservation efforts and the advance of proven environmentally sound techniques to open more drilling in public lands, we get demagoguery; nevermind the massive contribution to energy independence that may be had by opening up the ANWR, we get denied access.”
Congress claims it’s doing everything it can to alleviate high energy costs and eliminate shortages. Instead, no new refineries have been built in 29 years, no new nuclear power plants have been built in the last 32 years (France has built 58 that now generate 80 percent of the country’s electricity) and a host of new regulations and blocked permits have held back development of new coal mines that produce clean coal and could provide much of America’s electricity needs.
We need new energy sources and more investment in our energy infrastructure and what do we get? As former Michigan Gov. John Engler says, we get Senate hearings that can best be described as a “theatrical exercise.” Quite frankly I’m fed up with politicians who complain about a more ambitious energy policy, but allow energy prices to skyrocket because of intransigent resistence to finding real energy solutions. If left more to a robust free market and less subject to political manipulation, good old American “can do” can be the catalyst for securing a greater energy self-sufficiency that respects conservation and environmentally sound techniques.
James L. Martin is president of the 60 Plus Association, Arlington, Va., a national senior-citizen advocacy organization.