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Editorial: Slippery oil / Despite big profits, the industry seeks special help
Wednesday, October 19, 2005

A so-called energy bill passed by the House of Representatives is a brazen attempt to shower unneeded federal aid on the oil industry, which was enjoying record profits even before hurricanes Katrina and Rita demolished the Gulf Coast.

Its author is Rep. Joe Barton, a Republican friend of Big Oil from Texas, who is chairman of the House Energy Committee. The premise of his measure is a false one -- that environmental restrictions have prevented the oil industry from building new refineries. The bill would give refiners tax breaks to build new plants and would fast-track the permit process, to the detriment of taxpayers and local communities.

Only one refinery permit has been issued over the past 25 years, but that is because refiners chose to increase capacity by expanding existing facilities. Refining capacity now is very tight, and Big Oil actually prefers to keep it that way because it boosts their profits, even as it encourages shortages.

According to an analysis by the Denver Post, the refiners' gross profit margins on each barrel of gasoline have more than tripled in the past year and were rising steadily even before the hurricanes damaged oil infrastructure in and around the Gulf of Mexico.

At the same time, four of the top five oil companies -- ExxonMobil, BP, Royal Dutch Shell and ConocoPhillips -- reported hefty jumps in first-half profits this year. Net income for ConocoPhillips was up 65 percent; Shell 39 percent; ExxonMobil 38 percent, and BP 31 percent.

A provision to weaken the federal New Source Review provision of the Clean Air Act has been stripped from the bill, but it still contains a number of other noxious proposals, including one that would push back deadlines for compliance with ozone cleanup nationwide.

Using high fuel prices as a pretext to gut environmental laws is as unconscionable as it is sneaky. The Senate should deep-six Mr. Barton's scheme.

First published on October 19, 2005 at 12:00 am
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