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Senate probes profits

As angry consumers face outrageous prices at the gas pump and big oil companies report record profits, the U.S. Senate held a joint hearing of the Energy and Commerce Committees Wednesday to question oil-industry executives.

Late last month, a number of the oil industry's biggest companies reported a dramatic surge in third-quarter profits, prompting widespread suspicion of corporate profiteering in the aftermath of Hurricane Katrina.

"Following one of the biggest natural disasters to hit America, the world's largest oil companies are reaping record profits," Gov. Jim Doyle stated in a press release. "To price-gouge consumers under normal circumstances is dishonest enough, but to make money off of the misery of others is downright immoral."

As a whole, the oil industry's quarterly revenue recently reached nearly $26 billion after a 62 percent jump. Exxon Mobil, the world's leading oil company, alone reported a growth of 75 percent, totaling the largest quarterly corporate profit ever in the history of the country at nearly $10 billion.

Jay Wadd, chief of staff for State Sen. Dave Hansen, D-Green Bay, said residents in Wisconsin have been hit hard by the rise in fuel prices.

"In September, there were $80 million of excessive profits from Wisconsin consumers alone," Wadd said.

At the Senate hearing, executives representing the nation's top oil companies defended their record profits, rejecting allegations of price gouging in the wake of Hurricane Katrina and pointing to other uncontrollable factors.

"Clearly, we experienced price volatility in the wake of the hurricanes," Chevron Corp. Chairman and CEO David O'Reilly said in a hearing statement, referring to incapacitated oil production and refinery in the weeks following the storms. "Price volatility was also driven by localized panic-buying of gasoline, which led to temporary shortages."

While a number of committee members present at the hearing worked to hold big oil companies accountable, some Wisconsin Democratic lawmakers are working at the state level to combat price-gouging and high energy costs, especially as winter's approach threatens increased heating bills.

State Senate Democrats have introduced three bills, all currently facing committee review, aimed at making oil and gas more affordable for Wisconsin citizens.

The proposed bills are as follows:

• SB 337, authored by Sen. Tim Carpenter, D-Milwaukee, would extend the sales tax exemption period for natural gas and electricity from November through April to October through May.

• SB 373, authored by Hansen, would prohibit price gouging and put in place certain penalties for violators.

• SB 376, authored by Sen. Russell Decker, D-Schofield, would create an excess-profits tax for oil companies.

Additionally, Doyle has actively called for congressional action to push big oil companies accused of price gouging to refund profits to consumers, a recommendation that was seconded by Attorney General Peg Lautenschlager.

Doyle has also announced intentions to hold a public hearing in Milwaukee, ordering the attendance of oil-industry executives. The hearing is scheduled for Dec. 1.

"We will issue subpoenas to the executives of the big oil companies and demand that they appear in Wisconsin to explain how they can justify making enormous profits in the wake of a national tragedy," Doyle said in a release.

Many state legislators are demonstrating support for the governor's initiative, including Sen. Fred Risser, D-Madison, who is a co-sponsor of both SB 373 and SB 376.

"The best thing to do is to set up a good investigation and see if these perceptions [of price gouging] are reality," Risser said. "Investigations are a part of our democracy."