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The New York Times: Republican Wants Big Oil to Share 10 Pct Profits: "Exxon Chief Executive Lee Raymond, ConocoPhillips Chief Executive Jim Mulva, and John Hofmeister, president of Royal Dutch Shell Plc.'s U.S. unit will testify at the Senate energy and commerce committees' hearing on Wednesday...": Posted Wednesday 2 November 2005

Published: November 1, 2005
Filed at 7:45 p.m. ET

WASHINGTON (Reuters) - In the latest sign of Republican worry about high energy prices, the head of the Senate Finance Committee said on Tuesday he wants large oil companies to donate 10 percent of their record profits to help poor Americans pay winter heating bills.

Republicans are growing increasingly concerned about oil profits triggering a consumer backlash when winter heating bills start to arrive in the next few weeks. The government forecasts natural gas costs in the U.S. Midwest will soar by 61 percent while heating oil in the Northeast jumps nearly 30 percent this winter.

Charles Grassley, an Iowa Republican and chairman of the Senate Finance Committee, said he sent a letter to oil companies to ``embarrass'' them into contributing to the Low Income Home Energy Assistance Program (LIHEAP).

Last year, the program spent $2.2 billion to help poor and elderly Americans pay their winter heating bills. Democrats say the fund should be doubled for this winter.

``You have a responsibility to help less fortunate Americans cope with the high cost of heating fuels,'' Grassley said in his letter, noting that the biggest oil and gas companies are expected to earn a total $96 billion in 2005.

``It's not unreasonable to expect corporations with 50, 75 or 100 percent growth in earnings this quarter to contribute a mere 10 percent of those profits to fund programs that supplement LIHEAP,'' he said. Grassley also asked each company to detail its recent charitable contributions.

Senate Democrats last week made a similar request, asking the oil industry to be ``good corporate citizens'' and donate 10 percent of their profits to the LIHEAP program.

Another top Senate Republican, Budget Committee Chairman Judd Gregg of New Hampshire, last week said he wants to look at a possible windfall profits tax to fund LIHEAP. However, Gregg acknowledged to reporters on Tuesday that his plan ``doesn't have a lot of wind behind it.''

Both the White House and Senate Majority Leader Bill Frist oppose a windfall profits tax. ``I do not support it right now,'' Frist told Reuters.

In recent days, Republican leaders of the House of Representatives and Senate have pleaded for oil companies to invest in refineries to boost their capacity to make gasoline and heating oil.


Senate Democrats, meanwhile, are trying to gather support for a windfall profit tax that would require companies to return some profits to consumers if they do not build new refineries or explore for new energy sources.

``Talk is cheap,'' said Sen. Byron Dorgan of North Dakota. ''The question is what is Congress going to do, if anything, about this unfairness?''

Dorgan and Christopher Dodd of Connecticut said they will attempt to attach their tax plan to budget legislation that Congress will consider before it adjourns later this month.

The Democrats' plan would levy a 50 percent windfall tax on oil profits when crude prices top $40 a barrel. The U.S. price fell to $59.85 a barrel on Monday, the lowest in three months.

The proceeds would be returned to U.S. households in a government check. ``The money really belongs to the people,'' Dorgan said. ``I'd like to see a rebate.''

Democrats have long criticized the industry for profiteering, but until last week Republican lawmakers were staunch allies of oil companies and searching for more federal incentives to help them pay to expand refineries. Last summer, Republicans pushed through an energy bill loaded with $14.5 billion in tax breaks and subsidies to the industry.

Next week, the head of Exxon Mobil Corp. -- which reported a record $9.9 billion quarterly profit -- will have to defend his company before a Senate hearing.

Exxon Chief Executive Lee Raymond, ConocoPhillips Chief Executive Jim Mulva, and John Hofmeister, president of Royal Dutch Shell Plc.'s U.S. unit will testify at the Senate energy and commerce committees' hearing on Wednesday, an industry source said, speaking on condition of anonymity.

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