Contrasting Energy Visions

Mark Green
Posted May 17, 2011

One senator called it a dog-and-pony show - and even produced a funny photo for illustrative effect. But last week's Senate Finance Committee hearing with top executives of America's top 5 oil companies - ExxonMobil, Chevron, ConocoPhillips, Shell and BP America - was anything but a frivolous sideshow act. Before it was over two distinct visions for the country's energy and economic future were clearer. The contrast will be center-stage in Congress today when the full Senate is scheduled to consider legislation that would raise taxes on oil and natural gas companies.

Backers of a proposal to end several tax deductions for the five energy companies, some that are available to all U.S. businesses, see no problem with raising taxes on successful companies. They've justified the push as: a) a reaction to rising gasoline prices; b) a bid to put more taxpayer dollars in alternative technologies; and c) a way to trim the federal deficit. Take your pick. If they get their way one industry will be singled out for higher taxes.

That's one vision: selective and punishing tax treatment that won't secure more energy in the future, with no apparent economic or job-creating benefit, as a pay-for for increased government spending.

The other vision is of an America that needs a strong oil and natural gas industry that helps drive economic growth - one with access to American resources to meet America's energy needs and create American jobs.

Oil and natural gas industry executives stressed access -- access to U.S. reserves that will create jobs and send more revenue to government coffers. More revenue than would be realized from the proposed tax change.

ConocoPhillips Chairman and CEO James Mulva said the oil and natural gas industry is ready to invest and expand. "Put us back to work, give us access," Mulva said. Chevron's John Watson said industry earnings shouldn't bring retribution from Washington. "Don't punish our industry for doing its job well," Watson said.

Both points are key: Government delays in granting permits in the Gulf of Mexico, off Alaska and the Atlantic Coast are delaying new production and the economic benefits that come with it. Instead, some in Washington are playing politics with tax policy to punish an industry that pays more than its fair share of taxes while supporting more than 9 million jobs. ExxonMobil's Rex Tillerson said the proposals aren't just "misinformed and discriminatory, they're counterproductive."

Talking about America's available resources, Shell's Marvin Odum said there's an enormous opportunity to "tip the energy balance." But first there's got to be a real energy policy, one based on access to those resources, Odum said.

A final thought: The same day some committee senators were preoccupied with legislation that won't increase access to energy resources or help economic growth, the House of Representatives passed its third bill in two weeks that would expand oil and natural gas drilling and move toward both goals.

Additional Resources:

Oil executives' hearing statement