STEVE INSKEEP, Host:
Executives from five of the largest oil companies were on Capitol Hill yesterday. They defended tax breaks for their industry. The U.S. Senate is expected to vote soon on legislation that would strip big oil companies of tax breaks worth more than $2 billion per year.
As NPR's Jeff Brady reports, the executives failed to convince Senate Democrats that the tax breaks are still necessary.
JEFF BRADY: Senate Finance Committee Chairman Max Baucus of Montana set the skeptical tone for the hearing.
MAX BAUCUS: The five largest oil companies, who are here today, collectively earned more than $35 billion in profits in the first quarter of 2011 alone.
BRADY: Baucus, a Democrat, asked the key question for the hearing.
BAUCUS: But do these very profitable companies actually need these taxpayer subsidies?
BRADY: The Democrats in the room had one answer - no. Republicans and the executives came down on the other side. The legislation would force large oil companies to pay more taxes and royalties. The extra money would be committed to reducing the federal deficit. But it's unlikely the proposal will become law because big oil has big allies in Congress who will block it.
Chevron CEO John Watson said it's unfair for lawmakers to pick on oil companies.
JOHN WATSON: Don't punish our industry for doing its job well. Create energy and tax policies that make our country a more attractive place to do business.
BRADY: Echoing that message, Shell Oil Company president Marvin Odum said more domestic drilling would create more federal revenue.
MARVIN ODUM: The way to impact the deficit and get more money into the federal government is through more production, where we pay more bonuses for the access, we pay more royalties on the production.
BRADY: Odum says if companies were allowed to drill in the U.S. to the extent they want to, the revenue to the Feds would be much more than the increased taxes being proposed. But that would upset a key constituent for Democrats - environmental groups. They want the government to raise taxes on oil companies and use the money to encourage more renewable forms of energy.
Jeff Brady, NPR News. Transcript provided by NPR, Copyright NPR.
