Just yesterday, a handful of Senate Democrats unveiled legislation that would end tax breaks for the top five domestic oil producers, Exxon Mobil, Shell, BP, Chevron and Conoco. Though they admit that this is a deficit cutting measure and not a solution to the oil issue, such a bill could in fact lead to higher gas prices. Democrats say that as some of the top earners in the world, these companies can afford to pay more taxes to help with the deficit. It's just a couple billion more per year they say, compared with the companies' annual profits that average about $25 billion each. "It's time for the big five to do the right thing for a change, and pay their fair share," said New Jersey Democratic Sen. Robert Menendez on Tuesday.
But the industry, backed by the nonpartisan Congressional Research Service, says that increasing taxes on oil companies could end up limiting supply, as the current tax breaks offer the companies incentives for risk-taking and production. According to the American Petroleum Institute, reducing tax breaks would also lower profits for shareholders, which include common investors in mutual funds and pension funds. "[The oil industry] currently give[s] $87 million to the Treasury every single day in rents, royalties and income tax payments. That's $37 billion a year," says the Petroleum Institute's Johnson. "We're willing to do our part and help address the deficit, but increased access is really the way to do that, not raising taxes."
While the partisan bills don't seem to offer much hope, there is one bipartisan idea on the table, introduced repeatedly over the years by Wisconsin Sen. Herb Kohl, that would address what the majority of experts say is the real source of price fluctuations in the oil market: OPEC. The antitrust legislation, if passed, would increase the Department of Justice's power to prosecute OPEC and its member countries for price fixing. There's no guarantee that the U.S. would or could enforce this law, since it applies not to companies but to nation-states, like Saudi Arabia. Although the administration has yet to take a stance on such legislation, U.S. Attorney General Eric Holder has appeared receptive, saying at a recent congressional hearing that he could use an extra tool to deal with price manipulation.
For now, it seems, the gas-guzzling public will just have to wait it out. There's a chance that gas prices could go down on their own without any legislative action. And in the past, Americans have simply gotten used to higher prices, adopting more efficient technology and practices. So, as the summer heat is likely to drive prices up even more, don't look to Congress to help alleviate pain at the pump.
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Corrected on 05/11: A previous version of this article misspelled Eben Burnham-Snyder's name.