Time for Big Oil’s tax breaks to be reassessed

Last week's congressional hearing that featured oil company executives trying to defend record profits as fuel prices continue to escalate really didn't tell us anything we as a nation didn't already know: We're too dependent on oil, especially foreign oil, and prices are spiraling out of control.

But the hearing did serve a valuable service in reminding us again that ways must be found to ease this national addiction.

A good place to start? Until development of alternate fuels gets the priority it must have, Congress should discontinue the huge tax breaks to the major oil companies that were originally intended for exploration of new oil supplies.

The five companies hauled before the House Select Committee on Energy Independence and Global Warming -- Exxon Mobil Corp., Shell Oil Co., BP America Inc., Chevron Corp. and ConocoPhillips -- made $123 billion last year. Exxon alone racked up a record $40 billion in profits.

Try as they might, the executives got no traction defending their mega-earnings or the need for continued government tax breaks to shore up their bottom lines, particularly as gasoline heads for $4 a gallon and with diesel fuel already over that benchmark in Washington state.

The Associated Press reported that while Democrats on the panel hammered the executives for their profits and demanded they do more to develop alternative energy sources such as wind, solar and biofuels, Republican lawmakers called for opening more areas for drilling to boost domestic production of oil and gas.

There is merit to both arguments.

Robert Malone, chairman of BP America, pointed out to the committee that 85 percent of the country's coastal waters are off limits to drilling. And, of course, oil companies have long coveted drilling access to the Arctic National Wildlife Refuge in Alaska.

But before any attention is paid to more access either in ANWR or off coast, there must be a sustained, meaningful Big Oil commitment to development of alternate fuels. ANWR in particular should never be opened up for drilling if it in any way eliminates or even diminishes the search for such fuels.

Given the record profits and current tax breaks, we're convinced that not enough is being spent on research and development by these giant firms.

Rep. Edward Markey, D-Mass., chairman of the committee, challenged the executives to pledge to invest 10 percent of their profits to develop renewable energy and give up $18 billion in tax breaks over 10 years so money could be funneled to support other energy and conservation. Of course, it would be better if that request was made policy by a congressional mandate.

"Why is Exxon Mobil resisting the renewable revolution?" asked Markey, noting that the other four companies together have invested $3.5 billion in solar, wind and biodiesel projects.

Exxon is spending $100 million on research into climate change at Stanford University, replied J.S. Simon, senior vice president, but current alternative energy technologies "just do not have an appreciable impact" in addressing "the challenge we're trying to meet."

Coming from the company reaping the biggest windfall in the current scheme of high prices and government subsidies through tax breaks, that weak argument just doesn't sell.

That $100 million is one-fourth of 1 percent of Exxon's 2007 profit. That's not nearly enough.

Congress should revisit the tax breaks, redirect them as much as needed to research and development of alternate fuels, and then -- and only then -- worry about drilling for more domestic oil and gas.

* Members of the Yakima Herald-Republic editorial board are Michael Shepard, Sarah Jenkins and Bill Lee.

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