[Congressional Record Volume 146, Number 135 (Wednesday, October 25, 2000)]
[Senate]
[Pages S10992-S10993]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              RECORD THIRD QUARTER NET PROFITS FOR BIG OIL

  Mr. LEAHY. Mr. President, I come to the floor once again to announce 
that Big Oil is beginning to release its third quarter profit reports 
and while the news is great for investors, it's not so great for 
American consumers. As 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 has been 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.
  The overall net income for major petroleum companies more than 
doubled in the third quarter of 2000 relative to the third quarter of 
1999. Let me illustrate the phenomenal profits of the oil industry for 
the past year when gasoline prices soared and heating oil stocks fell.
  In the third quarter of 2000, Chevron Corporation reported net 
profits of $1.53 billion, Exxon Mobil Corporation reported net profits 
of $4.29 billion, and Texaco reported net profits of $798 million. 
Compared to the third quarter of 1999, the profits in the third quarter 
of 2000 increased 163 percent for Chevron, 96 percent for Exxon Mobil, 
and 106 percent for Texaco. I ask unanimous consent that a chart of 
these statistics be printed in the Record.
  Not surprisingly, these multi-million and even multi-billion dollar 
profits are making record profits. Exxon Mobil executive Peter Townsend 
is quoted as saying: ``We've got a lot of cash around here. It's coming 
in pretty fast, flying through the door.'' And according to Fadel 
Gheit, an analyst with Fahnestock & Company: ``The fourth quarter could 
beat the third.''
  There is no doubt that 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. Mr. President, that is 
outrageous.
  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. Listen to this from a report in the 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. . . .''
  The investment firm UBS Warburg in London estimated this month that 
the surplus cash of the top 10 global energy companies will total $40 
billion this year and grow to $130 billion by the end of 2004. The 
companies, Warburg predicts, will use about two-thirds of the surplus 
to repurchase stock to bolster market price, and one-third to reduce 
debt. Indeed, last week Texaco and Chevron agreed to merge with Chevron 
paying $35.1 billion to acquire Texaco.
  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.
  On September 27, 2000, I introduced S. 3118, the Windfall Oil Profits 
For Heating Assistance Act of 2000. My legislation imposes a windfall 
profits assessment on the oil industry to fund heating help for 
consumers and small business owners across America.
  In true arrogance to the needs of Americans struggling to heat their 
homes, John Felmy of the American Petroleum Institute has publicly 
stated: ``The profits aren't owned by consumers, they're owned by the 
shareholders. The companies have to do what's appropriate for owners of 
the enterprise.''
  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. 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.
  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

[[Page S10993]]

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. My 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.
  Specifically, 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 into the pricing and profits of the oil 
industry. The 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. It is time for Congress 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.
  I urge my colleagues to support the Windfall Oil Profits For Heating 
Assistance Act of 2000.
  Mr. President, I ask that the chart to which I referred, be printed 
in the Record.
  There being no objection, the chart was ordered to be printed in the 
Record, as follows:

            RECORD PROFITS FOR BIG OIL--THIRD QUARTER PROFITS
------------------------------------------------------------------------
                                         3rd quarter             change
           Company           ----------------------------------    (in
                                    1999             2000       percent)
------------------------------------------------------------------------
Chevron.....................  $582 million...  $1.52 billion..       163
Exxon Mobil.................  2.19 billion...  4.29 billion...        96
Texaco......................  387 million....   798 million...       106
------------------------------------------------------------------------

                                                                

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