Everyone Knows It's Windfall
It's Still Oily

The heads of the major oil companies came to Washington to defend their soaring profits in a hearing with the Senate Commerce Committee. Here's the gist from the WaPo:

The chiefs of five major oil companies defended the industry's huge profits Wednesday at a Senate hearing where they were exhorted to explain prices and assure customers they're not being gouged.

There is a "growing suspicion that oil companies are taking unfair advantage," Sen. Pete Domenici, R-N.M., said, opening the hearing in a packed committee room.
[...]
ExxonMobil, the worlds' largest privately owned oil company, earned nearly $10 billion in the third quarter. Raymond was joined at the witness table by the chief executives of Chevron, ConocoPhillips, BPAmerica and Shell Oil USA.

Together the companies earned more than $25 billion in profits in the July-September quarter as the price of crude oil hit $70 a barrel and gasoline surged to record levels after the disruptions of Hurricanes Katrina and Rita.

Raymond said the profits are in line with other industries when earnings are compared to the industry's enormous revenues.

But here's an interesting twist--they weren't sworn in to testify at this hearing. Salon's War Room has the goods:

Maybe Republicans in the Senate have learned something from the perjury case against Scooter Libby after all. When oil company executives appeared today before a Senate hearing on energy prices and profits, Senate Commerce Committee Chairman Ted Stevens refused to place them under oath.

Daniel Inouye, the ranking Democrat on the Commerce Committee, said that oil companies should want their testimony to come with a sworn statement that they're telling the truth.
[...]
But representatives from Exxon Mobil, Chevron, BP, Conoco and Shell didn't make that demand, and Stevens, a Republican from Alaska, didn't push it. "There is nothing in the standing rules to require that witnesses be sworn," Stevens said. "

A post over at Daily Kos by Kos has this additional bit:

For the record, senators swore in the baseball players testifying at the steroids hearings, the tobacco execs testifying in the 90s, and Jack Abramoff when he recently testified.

Back to the War Room for a wrap-up:

It's not clear what, if anything, will come of the Senate hearings. As much as anything else, high gas prices have hurt the president's standing with Middle America, and Republicans in Congress realize that they need to offer at least the appearance of concern. Pete Domenici, the Republican senator from New Mexico, said that there is "growing suspicion that oil companies are taking unfair advantage," and that the companies "now owe the country an explanation." But as the oil companies report huge profits, Republicans in Congress might owe the country an explanation, too -- for why they pushed through an energy bill in the spring that offered billions of dollars' worth of tax breaks for energy producers, and for why they responded to the spike in gas prices after Hurricane Katrina with a bill that would have provided federal insurance for oil companies whose projects are stalled by lawsuits or regulatory delays.

Finally, there's this editorial from the NYTimes on a windfall profits tax, with which I heartily agree:

A windfall tax is a good idea. But justifying it by demonizing the oil companies only perpetuates Americans' false belief that high energy prices are primarily the fault of Big (Bad) Oil. They're mainly due to supply and demand, so consumers' insatiable oil thirst plays a major role. The oil companies are indeed reaping profits from hurricanes and other events, and a strong case can be made for taxing those windfalls. But outsized consumer demand made those external events so profitable.

To be effective, a windfall tax should be part of a strategy to reduce oil dependence. Such a strategy would depend on reducing consumption.
[...]
Properly structured, a windfall tax would generate money for mass transit and alternative fuels, for helping carmakers move from sport utility vehicles to energy-efficient models, and for other ways to cut demand. It would bring in so much money - more than $24 billion this year, if it was set at 50 percent of the profits on oil sales above $40 a barrel in 2005 - that some could also be used to help consumers cope with the current high prices, including providing a few billion dollars for home heating aid for the poor.

But using all of the revenue to provide consumer rebates - as some lawmakers propose - would be counterproductive because that would foster only more consumption.