The big oil companies come under attack for earning billions in profits as gasoline prices have soared. Oil executives say company earnings aren't excessive. But Republicans in Congress are talking about reining them in, and a debate is brewing on how to help consumers.
ExxonMobil, the world's biggest oil company, announced that it earned more than $8 billion in the first three months of the year. The news follows Conoco Phillips' announcement that it earned $3.3 billion during the first quarter of 2006. Chevron is set to announce its quarterly profits Thursday.
Big profits at the oil companies may seem like salt in the wounds to drivers, who are already smarting from gasoline prices of $3 a gallon or more. As Congress debates how to address the situation, companies are taking steps to soothe an expected backlash.
The oil supplies Exxon brought to market in the first three months of the year sold for an average of about $60 a barrel. That's 40 percent more than the oil it produced a year ago. Like farmers who prosper when the price of their crops rise, Exxon and other big oil producers are the beneficiaries of soaring crude oil prices.
But senior energy analyst Fadel Gheit of Oppenheimer and Co. says oil companies can no more control those prices than a farmer can dictate what he gets for a bushel of corn.
Russ Roberts, a spokesman for ExxonMobil, said, "We understand it's tight for everyone these days. It's difficult to pay high gasoline prices. But our job is to bring supply to the market, and that's what we're doing. And we're investing billions of dollars around the world to do that."
Crude oil production accounted for more than three-fourths of Exxon's profit during the quarter. The company made another $1.2 billion refining crude oil into gasoline and other products.
Democratic Sen. Byron Dorgan of North Dakota wants to tax what he calls "windfall profits" that oil companies earn on prices over $40 a barrel. His proposal went nowhere last year. But with the return of high gasoline prices, Dorgan says even some of his Republican colleagues have begun to give the idea a second look.
"The American people have all the pain with these prices at the pump and all of the gain is going into the corporate treasuries," Dorgan said.
Exxon spent nearly $5 billion in the first quarter on exploration and expanding oil fields. The company also spent $6 billion buying its own stock back in an effort to boost the share price.