Floor Statement: Repealing Tax Breaks for Oil Companies
April 27, 2006
Mr. BIDEN. Mr. President, as I understand the state of play on the floor--I have been at meetings--it is that I should withhold offering any amendment now. But I am going to speak to an amendment I will be offering during the debate on the emergency supplemental bill.
When we last debated budget matters here on the floor, I came to the floor to indicate I was going to attempt to repeal the $2.6 billion in tax breaks the Energy bill afforded the oil industry. I want to give my colleagues the context in which I raised it then, raise it now, and will raise it again.
It is very easy, I understand--I have been here a long while--to demagogue the oil prices and oil industries and big companies, and, when things get tough, to talk about blaming everybody's problems on profits of companies.
Well, the President, today, spoke, as many of us have up to now, on the need to investigate and determine whether there is any gouging going on with energy prices today by American oil companies. But that is not why I am here at this moment.
Senator Specter, the chairman of our Judiciary Committee, held a hearing in the Judiciary Committee a couple weeks ago, before the Easter recess, where he summoned, if I am not mistaken, the CEOs of the six largest oil companies. It may have been only four oil companies and one gas company and one energy company. But I think it was six. I will get for the Record exactly how many. But he included the chairman of the board of Exxon and other major oil companies. And the issue was whether there was some form of price fixing or gouging going on.
It came my turn to question. There had been a good deal of discussion about how much money in annual profits and quarterly profits companies were making. At that time, it was reported that ExxonMobil reported the highest annual profits, $36 billion, of any corporation in American history. That was not a surprise in the sense that they have had a great windfall with oil prices.
We were at our conference lunch today and someone said: Oil is going to go to $4 a gallon. And Senator Boxer, sitting next to me, said: It's already at $4 a gallon in my hometown in California.
Well, it is well over $3 a gallon in most of our constituencies, and we are paying that money, in my view, because we lack an energy policy. We lack an energy policy. And the one that has been written has been written basically to benefit big oil and big gas.
Since President Bush took office, oil prices have doubled, with at least a 100-percent increase, and high gas prices, that make us uneasy at the pump, have been very good for major oil companies. They are more flush than they have been anytime in history. Prices went up during Katrina. Six months later, we learned that all three oil companies made record profits of a total of $111 billion.
So why am I on the Senate floor about this? Everybody knows this. I am stating the obvious. When it came my turn to question in the Judiciary Committee, I asked the question of the chairman of the board of Exxon--and Senator Specter had sworn all of the witnesses in, so they were testifying under oath. And I said: May I ask you a question, Mr. Chairman--the chairman of Exxon. Then I went down the line to the rest.
I said: Are you aware of the incentives in the Energy bill we passed last year--that I voted against--which provided over $2.6 billion in incentives to oil companies in order for them to go out and find, invest, drill, and seek new resources and increase their capability to deliver to the market?
He said: Yes, I'm aware of that.
I said: Do you need that? In light of a $35 billion profit, is there anything you can tell me that would justify us giving the industry, including you, an extra $2.6 billion in incentives?
I might add, so we put this in proportion, for $1.4 billion, we could put portals at every single major port in the world that could detect whether a cargo container had a radioactive device and/or a radiological device or a nuclear device in that cargo container. But it would cost $1.4 billion. We are not doing that right now, in large part because of cost.
So just to put this in perspective, $2.6 billion to incentivize the oil industry now, could be used for a whole lot of other things. I am sure other of my colleagues would suggest there are other ways to use that money, not the least of which would be to reduce the deficit. But there are other ways to do it. So it was not an idle question. We are not just talking about a little bit of money.
I do not think the chairman of ExxonMobil liked my asking the question. But he indicated that, reluctantly, when I reminded him he--well, in fairness, I probably did not have to remind him he was under oath--but he indicated, no, he did not think that his company or the industry needed that incentive in light of their economic circumstance. Then I went down the line. And I will submit for the Record the names of each of the companies represented and the names of each of the CEOs sitting in the witness chair. Every one of them answered the exact same way. They all said: No, we do not need this $2.6 billion. We don't need any incentive in order to be able to proceed to maximize productivity, to maximize discovery, to maximize product now.
And then I went back to the chairman of Exxon--I worked my way down again--and I said: Would you support an amendment I would offer repealing that incentive? And even more reluctantly, he said: Yes.
I then went and asked that question to all these oil company executives, and they all said: Yes. So not only do they all acknowledge it is not needed, they all indicated, from the best of my recollection--and, again, I will submit for the Record their exact statements--I may be wrong about one or two of them, but not on whether they needed it but whether they supported the repeal. I think they all supported it.
Mr. President, I ask unanimous consent that relevant testimony before the Judiciary Committee be printed in the Record.
There being no objection, the material was ordered to be printed in the Record, as follows:
Senator BIDEN. Well, I mean, that is like saying--anyway, I do not have time because of the 5-minute rule here. Let me ask you, do any of you need, to be able to do what you are doing now, $2.8 billion in incentives the Federal Government is having other taxpayers pay for?
Mr. TILLERSON. Well, Senator, we did not lobby for any----
Senator BIDEN. I did not say you did. I am just asking, do you need it?
Mr. TILLERSON. No.
Senator BIDEN. Because you all point out we have to find alternative energy. It seems to me we should take the $2.8 billion that you all are getting, and we should put it into encouraging alternative energy. We should go out and do--right? What do you think?
Mr. MULVA. Senator, most of those incentives are directed towards energy in total, which is not necessarily the oil and gas business.
Senator BIDEN. Oh, it is mostly you guys.
Mr. MULVA. And second, it goes to independent producers, which are primarily the bedrock of most of our----
Senator BIDEN. But your company will not be upset if we take those away, right?
Mr. MULVA. Correct.
Senator BIDEN. None of you will object to us taking away those $2.8 billion of incentives as they apply to you, is that right? I note for the record, everyone is saying okay.
Mr. KLESSE. Senator, excuse me.
Senator BIDEN. Do it quickly, I only have 24 seconds.
Mr. KLESSE. Okay. Valero, we were interested in the incentives to expand refining capacity. That's our business, and we were interested in it.
Senator BIDEN. Do you still need it?
Mr. KLESSE. Do we need it?
Senator BIDEN. Do you need them to expand?
Mr. KLESSE. No.
Senator BIDEN. Good, okay, that is all I need. So they are all for my bill. I want the record to show no one thought it would be any problem withdrawing it for all of them. Even though I only have 2 seconds left, I yield.
Mr. BIDEN. I have a simple proposition I am going to present to the floor. Although on a supplemental we cannot change tax policy--we all know the blue slip rule, and to use the jargon my friend, the chairman of the committee, understands better than anybody here, I cannot, we cannot, legislate tax policy on this bill that does not originate in the House, and so on--what I do want to do is, I want to get the Senate on record with a sense of the Senate that the Senate Finance Committee report back within 90 days a piece of legislation repealing--repealing--this $2.6 billion in incentives provided to the oil companies.
Now, the fact is, there are going to be some on this floor--and I am prepared to listen to the argument because when I raised this before, some argued: Well, smaller companies, companies producing less than 500,000 barrels a year maybe need this incentive, that they may need this incentive to maximize their capability of producing oil. I do not think that is accurate, but I am prepared to listen to that. I am prepared to listen to that.
But for the time being, I want to put my colleagues on notice that the last group in the world that needs a tax break now is the oil companies--the absolute last--not because they are bad guys, not because of anything else. I do not even know if they asked for it.
I often say to my friends on this side of the aisle that sometimes folks on my side make a mistake. They don't realize that rich folks are just as patriotic as poor folks. When you are handed windfalls, even poor folks would not turn their nose up at them. I don't know whether the oil companies insisted on this being in the Energy bill or not, but I know they think it is not needed. I do know they say they would support its repeal. So if there is anything--to use the phrase of a former head of the Intelligence Committee--that has been a slam dunk in my 33 years as a U.S. Senator, this should be it. We can reallocate $2.6 billion to needed, worthwhile initiatives and/or reduction of the national debt or deficit, and we can do it with the very recipients of that $2.6 billion saying they don't need it, they don't want it, and they support us taking it away.
So I cannot think of anything at all that can justify us keeping in the law a tax break for a group of folks who do not need a tax break at all. The American people need a break from these incredibly high prices. It seems to me that this is nonpartisan, and it is a no-brainer.
In a speech today, the President finally stated that these companies don't need these tax breaks. Senator Wyden has a provision currently in conference that would accomplish some of this. Senators Feinstein and Sununu have tried to remove some unnecessary tax breaks for these companies as well, which are already rolling in profits. Numerous groups have agreed, from the League of Conservation Voters, National Environmental Trust, Public Citizens, Taxpayers for Common Sense, and the oil companies--they all agree these incentives are not needed.
We are not talking about $100,000 or $500,000 or a half billion dollars; we are talking about $2.6 billion. You can do an awful lot with $2.6 billion. So I think we should take the first step in taking control of our national energy policy and show the oil companies that we are listening. They say they don't need it. They say they would support it being repealed. Let's not let them down. Let's, for one time, vote on something that everybody, including the recipients, seems to be in agreement with--everybody from the President, to the Senator from Delaware, to the chairman of the board of ExxonMobil, to the National Environmental Trust.
I will withhold doing it now, but I tell the chairman that at some point, I will be here to introduce that amendment, which will call for the sense of the Senate that the tax committee, the Senate Finance Committee, the committee of jurisdiction, report back to the Senate within 90 days a repeal of these incentives.
