Capital Commerce: GOP's left turn on Big Oil?
With the Harriet Miers nomination infighting behind it, the GOP finds itself being torn asunder by another big issue. Some of Washington's leading economic conservatives are in an uproar over House Speaker Dennis Hastert's remarks this week against Big Oil.
With key House Republicans at his side, Hastert said oil companies "need to do more and can do more to inform the American public what they are going to do to bring down the cost of oil and natural gas." That warning led a GOP-aligned PR shop known as Advocacy Ink to send out word that some fellow Republicans were not pleased. Other conservative groups, like the Competitive Enterprise Institute and American Legislative Exchange Council, which receive funding from oil companies and other corporations, have accused the speaker of pandering to polls showing that Americans blame oil companies for high prices. "The free-market community has been very much taken aback by what Speaker Hastert has said," said Iain Murray, senior fellow at CEI. "Republicans are supposed to be the ones who understand the free market and the economics."
Although he raised questions over the pace of industry investment in refineries and pipelines, Hastert stopped short of calling for any legislation. He has not supported Democratic proposals to take stronger action against oil companies through a windfall-profits tax. Nonetheless, conservatives are still worried. "The fact that he's proposing to tell the oil companies what to do in their industry really is a case of politicians thinking they know better than industry and amounts to a form of central planning," says Murray.
The dispute comes during a week when oil company profits are in the spotlight, with all of the large energy companies announcing earnings. High oil prices gave Exxon Mobil the highest quarterly profit in U.S. corporate history: $9.9 billion, up 75 percent over the previous year. At Royal Dutch Shell, earnings were up 68 percent to $9 billion. And even BP, despite costly hurricane damage, saw third-quarter profits up 34 percent.