SENATE GRILLS BIG OIL, BUT ANSWERS LIE ELSEWHERE
November 10, 2005
Yesterday's congressional hearings on the third-quarter profits of America's biggest oil companies was driven by what several lawmakers described as widespread anger among their constituents. There is no question that surging gas prices have inflicted pain, particularly on lower-income drivers. Even so, Congress could do more to alleviate that pain and anger by addressing the underlying causes of high prices than by staging events such as the hearing, says USA Today.
Even as senators were asking why oil is almost $60 per barrel and why industry profits were at record levels in the third quarter, they were backing policies that contribute to the imbalance between supply and demand.
Many of the same lawmakers quick to point a finger have helped keep vast oil and natural gas fields offshore and in Alaska off limits to drilling:
- This has led to a dangerous overconcentration of the nation's energy production in the hurricane-prone Gulf of Mexico.
- Members of Congress, along with state and local officials, have backed Byzantine regulations that hamper refinery construction and expansion.
- Some are now pushing a counterproductive windfall-profits tax.
It doesn't take an economist to understand why multinational oil companies are earning billions of dollars every month. Consumers worldwide will buy about $2.5 trillion worth of petroleum products this year, much of it from Middle Eastern dictatorships.
This situation demands innovative energy polices, says USA Today, not asking energy industry leaders to be in charge of convincing consumers not to buy their products.
Source: Editorial, "Senate grills Big Oil, but answers lie elsewhere," USA Today, November 10, 2005.
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