[Congressional Record Volume 146, Number 117 (Wednesday, September 27, 2000)]
[Senate]
[Pages S9384-S9386]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. LEAHY:
  S. 3118. A bill to amend the Internal Revenue Code of 1986 to impose 
a windfall profits adjustment on crude oil (and products thereof) and 
to fund heating assistance for consumers and small business owners; to 
the Committee on Finance.


        Windfall Oil Profits For Heating Assistance Act of 2000

  Mr. LEAHY. Mr. President, the Windfall Oil Profits for Heating 
Assistance Act of 2000 is a bit of a mouthful, but let me explain what 
this does. My legislation imposes a windfall profits adjustment on the 
oil industry so we can fund heating help for consumers and small 
business owners across America.
  Mr. President, while American families have been paying sky-high 
prices at the gas pump and are bracing for record-high home heating 
costs this winter, the oil industry is savoring phenomenal profits. 
Something is wrong when working families are struggling to pay for 
basic transportation and home heat while Big Oil rakes in obscene 
amounts of cash by the barrel.
  Indeed, the overall net income for the 14 major petroleum companies 
more than doubled in the second quarter of 2000 relative to the second 
quarter of 1999, to $10.3 billion.
  In the second quarter of 2000, BP Amoco PLC reported profits of $2.87 
billion, Chevron Corporation reported profits of $1.14 billion, Conoco 
reported profits of $460 million, Exxon Mobil Corporation reported 
profits of $4.53 billion, Marathon Oil Company reported profits of $367 
million, Phillips Petroleum Company reported profits of $439 million, 
Royal Dutch/Shell Group reported profits of $3.15 billion and Texaco, 
Inc. reported profits of $641 million.
  Look at these huge profits. When people in Vermont and New England 
want to know why they are paying so much extra for home heating oil, 
pick up the phone and call Texas and ask them how they justify these 
huge windfall profits.
  This chart illustrates the phenomenal profits of the oil industry. 
Keep in mind, these profits came as gasoline prices soared and heating 
oil stocks fell. The oil industry executives said: It is the people of 
OPEC. It is not our fault. We love our customers. We are your friends. 
We wouldn't raise these prices. It is the naughty people overseas. We 
are not making any money from this. We are sorry you have to pay so 
much more to commute to work. We are sorry you can't heat your home.
  In my State, where it can drop down to 20 below zero, this is not a 
matter of comfort. It is a matter of whether you will live or not.
  But the oil industry executives say: We are sorry you have to pay so 
much more. Gee, maybe you should fill up early. Stocks are low. It is 
not our fault. We are not making anything out of this. We are not 
making any money out of it.
  They are liars. They are making money. They are making windfall 
profits.
  I have a chart here that illustrates the phenomenal profits of the 
oil industry for the past year when gasoline prices soared and heating 
oil stocks fell. Compared to the second quarter of 1999, the profits in 
the second quarter of 2000 increased 133 percent for BP Amoco, 136 
percent for Chevron, 205 percent for Conoco, 123 percent for Exxon 
Mobil, 208 percent for Marathon, 275 percent for Phillips, 96 percent 
for Shell and 124 percent for Texaco.
  Not surprisingly, these multi-million and even multi-billion dollar 
profits in the second quarter of 2000 for BP Amoco, Chevron, Conoco, 
Exxon Mobil and Shell were record quarterly profits.
  These gushering profits are not new for the oil industry in 2000. In 
the first quarter of 2000, Big Oil also reaped record profits.
  In the first quarter of 2000, ARCO reported profits of $333 million, 
BP Amoco reported profits of $2.68 billion, Chevron reported profits of 
$1.10 billion, Conoco reported profits of $391 million, Exxon Mobil 
reported profits of $3.35 billion, Phillips reported profits of $250 
million, Shell reported profits of $3.13 billion, and Texaco reported 
profits of $602 million.
  I have a second chart here that illustrates the phenomenal profits of 
the oil industry for the first quarter of the past year. Compared to 
the first quarter of 1999, the profits in the first quarter of 2000 
increased 136 percent for ARCO, 296 percent for BP Amoco, 291 percent 
for Chevron , 371 percent for Conoco, 108 percent for Exxon Mobil, 257 
percent for Phillips, 117 percent for Shell and 473 percent for Texaco.
  Again, these multi-million and multi-billion dollar profits in the 
first quarter of 2000 for BP Amoco, Conoco, Exxon Mobil and Shell were 
record quarterly profits.
  Yet these same oil company executives can tell the people of Vermont, 
the Northeast and elsewhere: Sorry you have to pay so much more for 
your gasoline. Sorry you have to pay so much more for your home heating 
oil. It is not our fault. We are not making any profits. It is those 
mean people in the Middle East.
  Man, what hypocrisy.
  Somebody once said, in Vermont: We will rely on the facts. Vermonters 
are not fooled by this. But how frustrating it is for all of us, how 
frustrating it is for middle America, to pay these bills, feeling they 
are helpless. Because the fact comes down, in our State, in an 
extraordinarily cold winter, we have to have heat. The fact comes down, 
when men and women have to go to work and they have to commute, they 
have to pay the price of going there. Everybody expects to pay what it 
costs to live. But they do not expect to have to pay windfall profits 
for a cartel of companies.
  Big Oil reaped record profits while American consumers and small 
business owners dug deeper into their pockets to pay for soaring 
gasoline prices. And more record profits for Big Oil at the expense of 
consumers and small business owners are expected this winter when 
heating costs go through the roof.
  Even more disturbing are the recent press reports that the major oil 
companies are not using their record profits to boost production and 
lower future prices, but are instead cutting back on exploration and 
production.
  If they were using some of these huge profits to create more fuel, to 
create more production ability to be able to stave off shortages in the 
future, I would say let them have the profits because we will all 
benefit. They are not. They are just pocketing the profits. They are 
not doing a thing to find new oil, to find new production facilities.
  Listen to this from a report in yesterday's Wall Street Journal: 
``Exploration and production expenditures at the so-called super 
majors--Exxon Mobil Corp., BP Amoco PLC, and Royal Dutch/Shell Group--
fell 20 percent to $6.91 billion in the first six months of the year 
from a year earlier. . . .'' Mr. President, that is outrageous.
  The oil industry is made up of corporations formed under the laws of 
the United States. These oil industry corporations have a 
responsibility to the public good as well as their shareholders.

[[Page S9385]]

  To reap record windfall profits and then cut back on exploration and 
production to further increase future profits is poor corporate 
citizenship and an abuse of the public trust by these oil industry 
corporations and their executives.
  Well I for one have had enough of Big Oil making record profits at 
the expense of the working families and the small business owners who 
pay the oil bills, live by the rules and struggle mightily when fuel 
and heating costs skyrocket.
  In response to the energy crisis of the 1980s, Congress enacted the 
Crude Oil Windfall Profit Tax Act of 1980. This windfall profits tax, 
which was repealed in 1988, funded low-income fuel assistance and 
energy and transportation programs.
  Similar to the early 1980s, American families again face an energy 
crisis of high prices and record oil company profits. This past June, 
gasoline prices hit all-time highs across the United States, with a 
national average of $1.68 a gallon, according to the Energy Information 
Administration.
  This winter, the Department of Energy estimates that heating oil 
inventories are 36 percent lower than last year with heating oil 
inventories in New England estimated to be 65 percent lower than last 
year. In my home state of Vermont, energy officials estimate heating 
oil costs will jump to $1.31 per gallon, up from $1.19 last winter and 
80 cents in 1998.
  Given the oil industry's record windfall profits in the face of this 
energy crisis, it is time for Congress to act and again limit the 
windfall profits of Big Oil.
  The Leahy bill would do just that and dedicate the revenue generated 
from this windfall profits adjustment to help working families and 
small business owners with their heating oil costs this winter.
  If they are not going to put more money into providing more energy 
for us, then the Windfall Oil Profits For Heating Assistance Act of 
2000 would impose a 100 percent assessment on windfall profits from the 
sale of crude oil. My legislation builds on the current investigation 
by the Federal Trade Commission, a well deserved investigation into the 
pricing and profits of the oil industry.
  My bill requires the Federal Trade Commission to expand this 
investigation to determine if the oil industry is reaping windfall 
profits.
  The revenue collected from windfall oil industry profits, under my 
legislation, would be dedicated to two separate accounts in the 
Treasury for the following: 75 percent of the revenues to fund heating 
assistance programs for consumers such as the Low Income Home Energy 
Assistance Program (LIHEAP), weatherization and other energy efficiency 
programs; and 25 percent of the revenues to fund heating assistance 
programs for small business owners.
  American consumers and small business owners continue to pay sky-high 
gasoline prices and home heating oil costs are expected to hit an all-
time high this winter while U.S. oil corporations reap more record 
profits. We ought to restore some basic fairness to the marketplace. It 
is time for Congress to transfer the windfall profits from Big Oil to 
fund heating oil assistance for working families.
  If big oil executives say: But we need these profits so we can 
continue our exploration, we can continue to increase refineries--then 
let them spend the money for that. If they are actually spending the 
money for that, it is not a problem. But they want to have it both 
ways: They want to have a shortage, they want to force up the price, 
they want to have a windfall profit, and they want to stick it in their 
pocket and they don't want to do anything to help the consumer. If they 
are unwilling to help the consumer, the Congress ought to stand up and 
help the consumer.
  I ask unanimous consent the text of the bill be printed in the Record 
at the conclusion of my remarks and the bill be appropriately referred.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                                S. 3118

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Windfall Oil Profits For 
     Heating Assistance Act of 2000''.

     SEC. 2. FINDINGS AND PURPOSE.

       (a) Findings.--Congress finds the following:
       (1) The overall net income for the 14 major petroleum 
     companies more than doubled in the second quarter of 2000 
     relative to the second quarter of 1999, to $10,300,000,000.
       (2) In the second quarter of 2000, BP Amoco reported 
     profits of $2,870,000,000, Chevron Corporation reported 
     profits of $1,140,000,000, Conoco reported profits of 
     $460,000,000, Exxon Mobil Corporation reported profits of 
     $4,530,000,000, Marathon Oil Company reported profits of 
     $367,000,000, Phillips Petroleum Company reported profits of 
     $439,000,000, Royal Dutch/Shell Group reported profits of 
     $3,150,000,000, and Texaco, Inc. reported profits of 
     $641,000,000.
       (3) When compared to the second quarter of 1999, the 
     profits in the second quarter of 2000 increased 133 percent 
     for BP Amoco, 136 percent for Chevron, 205 percent for 
     Conoco, 123 percent for Exxon Mobil, 208 percent for 
     Marathon, 275 percent for Phillips, 96 percent for Shell, and 
     124 percent for Texaco.
       (4) The profits in the second quarter of 2000 for BP Amoco, 
     Chevron, Conoco, Exxon Mobil, and Shell were record quarterly 
     profits for these oil companies.
       (5) In the first quarter of 2000, ARCO reported profits of 
     $333,000,000, BP Amoco reported profits of $2,680,000,000, 
     Chevron reported profits of $1,100,000,000, Conoco reported 
     profits of $391,000,000, Exxon Mobil reported profits of 
     $3,350,000,000, Phillips reported profits of $250,000,000, 
     Shell reported profits of $3,130,000,000, and Texaco reported 
     profits of $602,000,000.
       (6) When compared to the first quarter of 1999, the profits 
     in the first quarter of 2000 increased 136 percent for ARCO, 
     296 percent for BP Amoco, 291 percent for Chevron, 371 
     percent for Conoco, 108 percent for Exxon Mobil, 257 percent 
     for Phillips, 117 percent for Shell, and 473 percent for 
     Texaco.
       (7) The profits in the first quarter of 2000 for BP Amoco, 
     Conoco, Exxon Mobil, and Shell were record quarterly profits.
       (8) On June 19, 2000, gasoline prices hit all-time highs 
     across the United States, with a national average of $1.68 
     per gallon, according to the Energy Information 
     Administration.
       (9) On September 22, 2000, the Department of Energy 
     estimated that heating oil inventories nationwide are 36 
     percent lower than in 1999, in the East such inventories are 
     40 percent lower than in 1999, and in New England such 
     inventories are 65 percent lower than in 1999.
       (10) American consumers continue to pay sky-high gasoline 
     prices and home heating oil prices are expected to hit an 
     all-time high in the winter of 2000-2001 while the oil 
     industry continues to reap record profits.
       (b) Purpose.--The purpose of this Act is to transfer 
     windfall profits from the oil industry to fund heating 
     assistance for consumers and small business owners.

     SEC. 3. WINDFALL PROFITS ADJUSTMENT.

       (a) In General.--Subtitle E of the Internal Revenue Code of 
     1986 (relating to alcohol, tobacco, and certain other excise 
     taxes) is amended by adding at the end the following new 
     chapter:

    ``CHAPTER 55--WINDFALL PROFITS ON CRUDE OIL AND PRODUCTS THEREOF

``Sec. 5886. Imposition of tax.

     ``SEC. 5886. IMPOSITION OF TAX.

       ``(a) In General.--An excise tax is hereby imposed an the 
     windfall profit from any domestic crude oil or other taxable 
     product removed from the premises during the taxable year at 
     a rate equal to 100 percent of such windfall profit.
       ``(b) Definitions.--For purposes of this section--
       ``(1) Premises.--The term `premises' has the same meaning 
     as when used for purposes of determining gross income from 
     property under section 613.
       ``(2) Producer.--The term `producer' means the holder of 
     the economic interest with respect to the crude oil or 
     taxable product.
       ``(3) Reasonable profit.--The term `reasonable profit' 
     means the amount determined by the Chairman of the Federal 
     Trade Commission to be a reasonable profit on the crude oil 
     or taxable product.
       ``(4) Taxable product.--The term `taxable product' means 
     any fuel which is a product of crude oil.
       ``(5) Windfall profit.--The term `windfall profit' means, 
     with respect to any removal of crude oil or taxable product, 
     so much of the profit on such removal as exceeds a reasonable 
     profit.
       ``(c) Liability for Payment of Tax.--The tax imposed by 
     subsection (a) shall be paid by the producer of the crude oil 
     or taxable product.
       ``(d) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the purposes of this section.''.
       (b) Clerical Amendment.--The table of chapters for subtitle 
     E of such Code is amended by adding at the end the following 
     new item:

``Chapter 55. Windfall profits on crude oil and products thereof.''

       (c) Effective Date.--The amendments made by this section 
     shall apply to crude oil or other products removed from the 
     premises on or after January 1, 2000.

     SEC. 4. FEDERAL TRADE COMMISSION INVESTIGATION AND 
                   DETERMINATION OF REASONABLE PROFITS.

       (a) Investigation of Oil Industry Profits.--The Chairman of 
     the Federal Trade

[[Page S9386]]

     Commission shall investigate the profits of the oil industry, 
     including the 14 major petroleum companies, on the sale in 
     the United States of any crude oil or other taxable product 
     (as defined in section 5886(b) of the Internal Revenue Code 
     of 1986) made after January 1, 1999.
       (b) Determination of Reasonable Oil Industry Profits.--The 
     Federal Trade Commission shall make reasonable profit 
     determinations for purposes of applying section 5886 of the 
     Internal Revenue Code of 1986 (relating to windfall profit on 
     crude oil and products thereof).
       (c) Funding.--There are authorized to be appropriated to 
     the Federal Trade Commission such funds as are necessary to 
     carry out this section.

     SEC. 5. ALLOCATION OF REVENUES FROM WINDFALL OIL PROFITS 
                   ADJUSTMENT TO HEATING ASSISTANCE.

       (a) Establishment of Trust Fund.--Subchapter A of chapter 
     98 of subtitle I of the Internal Revenue Code of 1986 
     (relating to establishment of trust funds) is amended by 
     adding at the end the following new section:

     ``SEC. 9511. WINDFALL OIL PROFITS TRUST FUND.

       ``(a) Creation of Trust Fund.--There is established in the 
     Treasury of the United States a trust fund to be known as the 
     `Windfall Oil Profits Trust Fund', consisting of such amounts 
     as may be appropriated or credited to the Windfall Oil 
     Profits Trust Fund as provided in this section.
       ``(b) Transfers to Windfall Oil Profits Trust Fund.--There 
     are hereby appropriated to the Windfall Oil Profits Trust 
     Fund amounts equivalent to the taxes received in the Treasury 
     under section 5886.
       ``(c) Expenditures From Windfall Oil Profits Trust Fund.--
     Amounts in the Windfall Oil Profits Trust Fund shall be 
     available, as provided by appropriations Acts, for making 
     expenditures--
       ``(1) in an amount not to exceed 75 percent of amounts 
     transferred under subsection (b), for heating assistance for 
     consumers, and
       ``(2) in an amount not to exceed 25 percent of amounts 
     transferred under subsection (b), for heating assistance for 
     small businesses.''.
       (b) Clerical Amendment.--The table of sections for 
     subchapter A of chapter 98 of subtitle I of the Internal 
     Revenue Code of 1986 is amended by adding at the end the 
     following new item:

``Sec. 9511. Windfall oil profits trust fund.''
                                 ______