Sen. Charles Grassley (R-IA), chairman of the Senate Finance Committee, said Tuesday he would oppose a proposal to impose a windfall profits tax on oil companies, but he called on major energy companies to voluntarily give a percentage of their past quarter’s earnings to fuel fund programs that supplement the Low-Income Home Energy Assistance Program (LIHEAP).
In letters to the American Petroleum Institute, Natural Gas Supply Association and the Independent Petroleum Association of America, Grassley said it was “not unreasonable to expect [corporate members of the energy trade associations] with 50, 75, or 100% growth in earnings this quarter to contribute a mere 10% of those profits to fuel fund programs that supplement LIHEAP.”
Energy companies “have a responsibility to use these record profits to invest in more exploration, production and refining capacity to increase supply of petroleum products,” as well as a “responsibility to help less fortunate Americans cope with the high cost of heating fuels” this winter, Grassley wrote. “Your members have an opportunity to demonstrate that they’re good corporate citizens.”
Industry analysts have estimated that the 29 major oil and natural gas companies in the Standard & Poor’s stock index are expected to earn $96 billion this year, up from $68 billion in 2004 and $43 billion in 2003, he noted. Companies that have reported third quarter profits so far have earned more than $20 billion, an increase of more than 50% over last year.
Grassley asked each energy association to provide a status report on their members’ charitable contributions.
In a related development, Sen. Pete Domenici (R-NM), chairman of the Senate Energy and Natural Resources Committee, also indicated on Tuesday he would oppose a proposal of Sen. Judd Gregg (R-NH) to levy a tax on the excess profits of energy companies, with the proceeds going to help senior citizens and low-income customers to deal with their winter heating bills.
“A windfall profits tax doesn’t bring the price down for the consumer, nor does it increase production,” Domenici said, according to a report in Wednesday’s edition of Congressional Quarterly’s Green Sheets.
At the request of Senate Majority Leader Bill Frist (R-TN), the Senate energy panel and the Senate Commerce, Science and Transportation Committee have scheduled a joint hearing on Nov. 9 to address the run-up in energy prices and corporate profits. Appearing at the joint hearing will be a number of CEOs oil and gas companies, state attorneys general and Deborah Platt Majoras, the chair of the Federal Trade Commission.
The full witness list for the hearing will be released on Friday, the Senate energy panel said.
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