A bill came up in Congress the other day (yes, they still attempt to pass legislation in Congress in an election year) which would have imposed a windfall profits tax on the five largest “energy” corporations. The vote for cloture (what the Senate does now instead of insisting on a real filibuster) was 51-43 against for cutting off debate. Unfortunately, 60 votes were required to actually bring the bill to the floor for a vote. So, in essence, the cloture vote was a clear sign of those politicians who absolutely, positively will vote for whatever Big Oil wants, no matter what. Among those voting “no” (which in effect killed the bill this year) were 41 Republicans and two Democrats. Senators who don’t care about price gouging at the gas pump and are willing to vote to preserve the skyrocketing profits which ExxonMobil and its fellow gang of five members are taking from the wallets and bank accounts of you and I and any small or large business which has seen its transportation costs shoot through the roof.
Here are their names, for the record:
Alabama: Sessions (R); Shelby (R); Alaska: Murkowski (R); Stevens (R); Arizona: Kyl (R); Colorado: Allard (R); Florida: Martinez (R); Georgia: Chambliss (R); Isakson (R); Idaho: Craig (R); Crapo (R); Indiana: Lugar (R); Kansas: Brownback (R); Roberts (R); Kentucky: Bunning (R); McConnell (R); Louisiana:
Landrieu (D); Vitter (R); Mississippi: Cochran (R); Wicker (R); Missouri: Bond (R) No; Nebraska: Hagel (R) No; Nevada: Ensign (R); Reid (D); New Hampshire: Gregg (R); Sununu (R); New Mexico: Domenici (R) No; North Carolina: Burr (R); Dole (R); Ohio: Voinovich (R) ; Oklahoma: Coburn (R); Inhofe (R); Pennsylvania: Specter (R); South Carolina: DeMint (R); South Dakota: Thune (R); Tennessee: Alexander (R); Corker (R); Texas: Cornyn (R); Hutchison (R); Utah: Bennett (R); Hatch (R); Wyoming: Barrasso (R); Enzi (R).
Of those not voting, Senators Kennedy and Byrd are seriously ill and presumably would have voted “yes,” as would Senators Obama and Clinton. McCain and Lindsey Graham presumably would have voted “no” as that is consistent with the McCain campaign’s official position on taxes/ Of the two Democrats who vote to cut off debate on th4e bill, Mary Landrieu of Louisiana is no surprise. Any Senator from that state will have been purchased by Big Oil, regardless of party. The shocker to me was Harry Reid, Senate Majority Leader. Unless this was some sort of arcane political maneuver (and maybe it was) I don’t understand his vote at all.
The argument against a windfall profits tax on the oil and gas industry (or simply closing the loopholes in the current system of taxation) has always been that it would stifle investment in new equipment and research and development. However, the use to which the most profitable oil and gas companies have made of their massive profits, to buy back their own stock and pay dividends to shareholders, puts the lie to that argument.
Instead of reinvesting more of their newfound wealth to increase supplies or develop emerging technologies that might one day reduce energy costs, they are giving much of the loot to shareholders already enjoying outsized gains.
In a capital-intensive business, giving cash back to shareholders is often the equivalent of throwing in the towel. It’s saying “we can’t do anything with this money to improve our business.”
And it certainly doesn’t address the oil crunch that consumers pay for every day at the pump. […]
[T]ake a look at ExxonMobil (XOM, news, msgs), the biggest publicly traded U.S. oil company. It generated $40.6 billion in net income last year and $36.6 billion in free cash flow. What did it do with those riches?
It gave $38.4 billion back to shareholders — $7.4 billion in dividend payments and $31 billion through share buybacks.
As we all know, Big Oil’s senior executives also are doing pretty well out of their recent record revenues (see, e.g., the $400 million going away present ExxonMobil gave its former chairman, Lee Raymond). Of course, this is the exact opposite of the testimony Big Oil senior executives gave to Congress this April:
Exxon Mobil Corp. Senior Vice President Stephen Simon, whose company recorded the largest profit in U.S. history last year at $40.6 billion, said that in a boom-and-bust industry, his company needed the huge profits to pay for future oil development.
“We depend on high earnings during the up cycle to sustain this level of investment over the long term, including the down cycles,” Simon told the House Select Committee on Energy Independence and Global Warming.
Simon said that oil companies already pay record taxes and that any increase “will discourage the sustained investment needed to continue safeguarding U.S. energy security.”
Cry me a river. And stop telling lies. When you pay your shareholders billions more than you use to reinvest in your business, even Wall Street analysts get antsy.
Michael LaMotte of JPMorgan Chase (JPM, news, msgs) questioned why ConocoPhillips wasn’t devoting more than $15 billion to its capital budget. After all, ConocoPhillips production volumes declined in the last quarter, even without counting production lost when it got booted out of Venezuela.
Citing the juicy returns that energy companies get from finding and producing oil with crude prices are so high, LaMotte expressed exasperation. “I mean, clearly excess cash goes to buyback, but if I look at returns of a buyback program versus (capital spending), what’s the thought process there?” he asked.
What is the thought process there? A good question,and one which brings me back to our Senators from the Corporations of ExxonMobil, ConocoPhillips, Shell, BP and Chevron. Now some of these folks are retiring (Allard, Colo.; Craig, Idaho; Domenici, NM; and Hagel Neb.), and others aren’t up for re-election this year, but those who are* should have to answer that question, and it should be asked every time they appear at a debate, or answer questions at a press conference or appear at a campaign event. And it certainly ought to be the centerpiece of any television or radio ads by their opponents:
“Senator, you just voted to give away billions of tax benefits to Big Oil at a time when they are raking in record profits and using that money to pay their shareholders and senior executives billions of dollars, rather than re-invest those profits in developing alternative sources of clean energy for America. All while $4 a gallon gas prices are killing our economy, raising food prices and causing serious financial harm to ordinary Americans. So, Senator:
What was your thought process there?
* Republican Senators on this list who are up for re-election this Fall include the following:
Jeff Sessions of Alabama, Ted Stevens of Alaska, Saxby Chambliss of Georgia, Pat Roberts of Kansas, Mitch McConnell of Kentucky, Thad Cochran of Mississippi, Roger Wicker of Mississippi, John Sununu of New Hampshire, Elizabeth Dole of North Carolina, Jim Inhofe of Oklahoma, Lindsey Graham of South Carolina (yes, I know he wasn’t “present” for the vote, but he should still be asked the question since we all know how he would have voted), Lamar Alexander of Tennessee, John Cornyn of Texas; Michael Enzi of Wyoming, John Barrasso of Wyoming
