http://money.cnn.com/news/newsfeeds/articl...13-24182763.htm

Oil companies defend profits before Congress, reject higher taxes
April 01, 2008: 01:53 PM EST


WASHINGTON, Apr. 1, 2008 (Thomson Financial delivered by Newstex) -- Major oil companies today defended their record profits in a congressional hearing by arguing that these profits are needed to fund future investments in both traditional oil and gas exploration, as well as the development of alternative fuels.

In a hearing before the House Select Committee on Energy Independence and Global Warming, they also rejected the idea of higher taxes on these companies, and said new taxes would also cut into future investment that is needed to fill the globe's demand for energy.

'We depend on high earnings during the up cycle to sustain this level of investment over the long-term, including the down cycles,' said Exxon Mobil Corp. (NYSE:XOM) Senior Vice President Stephen Simon. Simon said his company continues to invest billions of dollars in energy exploration, and plans on spending 125 bln usd over the next five years.

Companies also argued that they are taxed enough, and that higher taxes would not only be unfair to energy companies, but would put further investment in future energy supplies at risk.

BP (NYSE:BP) (TSX:BP'U) America President Robert Malone said his company faces a 37 pct tax rate, and that oil companies effectively paid 40.7 pct in taxes, compared with 22.1 pct for other manufacturers.

While members of Congress said the companies need to invest more in alternative and renewable fuels, each one said they are spending in these areas.

Shell Oil Company President John Hofmeister said his company is developing alternative fuels, and is involved in wind, solar, biofuels and hydrogen projects. BP, Chevron and ConocoPhillips (NYSE:COP) made similar claims, but many argued that alternative fuels are not the answer to America's energy crisis yet.

BP's Malone said companies need to invest in renewable and alternative energy, but warned that 'we must all understand that this future is many years away and that renewables and alternatives will not make a material contribution to total US energy supply for many years.'
'We must point out that as our nation develops policies to increase supplies of renewable and alternative energy supplies, we must not overlook the vital need to also encourage the development of conventional supplies of oil and natural gas,' ConocoPhillips Executive Vice President John Lowe agreed.

'Overestimating how quickly the United States can transition to new fuels will likely lead to inadequate development of conventional supplies and higher prices at the pump,' he said.

Committee Chairman Ed Markey, a Massachusetts Democrat, unsuccessfully pressed ExxonMobil to agree to invest 10 pct of its profit in renewable energy and biofuels, but Simon said his company is still examining whether this level of spending is viable for his company.

And this is incredible; 123 billions in profit?.... thanx to us.

I think we need to know what the profits are percentage wise. 50%, 100%, 1000%, more!! less?
If their profit percentage is near the same as it always has been than it would be little to be too excited about and their record profits are just in dollar amounts, inflation makes that decieving.

In which case the journalist could have been helpful in telling us what their R&D costs are or even how much of the profit is going to share dividend and staff bonuses. Instead we are left merely with an uncontested claim. That is the trouble with a lot of journalism, in that they only give a fraction of pertinent facts and an insufficient amount to draw accurate conclusions.

This post has been edited by Andrew: Apr 1 2008, 07:40 PM