On the same day that members of Congress were blaming high gas prices on the oil companies and their excessive profits, congressional leaders gave up on their efforts to allow oil drilling in the Arctic National Wildlife Refuge.
At the same time that the oil companies were being blistered in Senate hearings because their companies had earnings in the recent quarter of 2005 of hundreds of millions of dollars, the Tax Foundation's Scott Hodge reported that in the last 25 years oil companies paid more than $2.2 trillion (that's right, trillion) in taxes of your money to federal and state governments. That's more than three times what the oil companies earned during the same period in profits!
Conoco Philips reported third-quarter profits of about $3.8 billion, which amounted to a profit margin of 7.7 percent on sales. That so-called excessive profit compares with an average of 7.9 percent for all, I repeat, all U.S. industries. For every dollar in sales, ExxonMobil makes 9.8 percent in profit. But McDonald's and Coca-Cola made 13.8 percent and 21.2 percent respectively. Google made 24.2 percent and Merck, Bank of America, Microsoft and the Citigroup all made much, much more. In fact, two of the nation's largest newspaper chains grumble when they don't make over 15 percent on sales!
Quite frankly the oil and natural gas industries are less profitable than banks, pharmaceuticals, software companies, the telecommunications industry and many more.
It's simple. Oil companies are not the cause of high gasoline prices. Make no mistake about it — the main cause of high prices and our shortage of domestic energy is that for decades the solution proposed by some in Congress and the environmentalists has been to increase taxes on fossil fuels and oppose nearly every effort to increase domestic supplies of oil and gas.
As former Rep. Roger Zion of Indiana (1967-75), the honorary chairman of 60 Plus and ex-chairman of the House Republican Task Force on Energy in the early 1970s, said recently, "Never mind the huge strides made in clean-coal technology, we get stifling opposition; never mind the extraordinary safety record of nuclear power plants, we get regulation; never mind conservation efforts while drilling for more capacity offshore in the east, west and southeast coasts, we get blocked access; never mind conservation efforts and the advance of proven environmentally sound techniques to open more drilling in public lands, we get demagoguery; never mind the massive contribution to energy independence that may be had by opening up the ANWR, we get denied access."
Congress claims it's doing everything in its power to alleviate high energy costs and eliminate shortages. Instead no new refineries have been built in 29 years, no new nuclear power plants have been built in the last 32 years (France has built 58 that now generate 80 percent of the country's electricity) and a host of new regulations and blocked permits have held back the development of new coal mines that produce clean coal and could provide more than half of the U.S. electricity needs.
We need new energy sources and more investment in our energy infrastructure, and what do we get? As former Michigan Gov. John Engler says, we get Senate hearings that can best be described as a "theatrical exercise."
Quite frankly I'm fed up with politicians who complain about a more ambitious energy policy but allow energy prices to skyrocket because of intransigence to finding real energy solutions. If left more to a robust free market and less political manipulation, good old American "can do" can be the catalyst for securing a greater energy self-sufficiency that respects conservation and environmentally sound techniques.
James L. Martin is president of the 60 Plus Association, a conservative senior citizens' advocacy organization. Readers may write to him at 60 Plus, 1600 Wilson Blvd., Suite 960, Arlington, VA 22209