Senior representatives of BP, Chevron, ConocoPhillips, ExxonMobil and Shell were recently called in front of a committee on energy independence and global warming to defend their actions. In the face of $55 billion in combined profits, the lawmakers wanted to know why so little had been invested in alternative fuels research and why the companies were working so hard to protect tax breaks amounting to $18 billion. Democrats recently voted to remove the tax breaks, but President Bush has pledged to veto the removal.
The oil company representatives tried to make the case that the tax breaks are necessary to drive investment that could lead to more oil production - from areas protected from drilling for environmental reasons, reports The Guardian. The rationale seems to indicate the companies believe that more supply could help drive down prices, although ExxonMobil's standalone profits of $40 billion seem to refute that premise - the companies clearly aren't fighting to remain profitable in the face of stiff competition on price.
Despite its massive profits, ExxonMobil is investing only $100 million in renewable energy research and development. Most of its cohorts are investing similarly small amounts in relationship to their profits. It's understandable that the oil companies are not keen on finding new ways to make their product obsolete, but on the other hand it's hard to understand how an industry taking $55 billion to the bank annually could be dependent on tax breaks.
Whether the committee's review of the situation will result in anything concrete - in terms of lower prices at the pump or increased renewable fuels investment - remains to be seen, however.