Video: For some, oil profits a kick in the gas tank

updated 7/31/2008 8:10:41 PM ET 2008-08-01T00:10:41

In a summer of nationwide anguish over fuel costs, Congress' attack on soaring gasoline prices has been full of high-octane rhetoric and low-energy results.

Both parties instead have fought bitterly for weeks over who can make the best political points for the November elections, with Republicans pressing for more domestic oil drilling and Democrats railing about oil company profits.

Despite hundreds of hours of House and Senate floor debate over the country's energy problems, lawmakers will leave Washington for their five-week summer hiatus this week with an empty tank.

Congress' sole legislative response to people's anger over $4 gas and expectations of record heating costs this winter has been to stop a small amount of oil from being shipped into the government's emergency reserve. The shipments ended, but oil and gasoline prices continued to rise.

Through the year, dozens of proposals surfaced and then fell by the wayside under partisan assaults.

Among them were measures to make energy price gouging a federal crime, to curb oil market speculation, to extend tax credits for wind and solar energy projects, to tax the windfall profits of the largest oil companies, to subject the OPEC oil cartel to U.S. antitrust laws, to release oil from the government emergency stockpile and to spur nuclear energy development and the use of coal as a motor fuel.

Many of the proposals were offered by Democrats; others came from Republicans.

All have gone nowhere.

One energy issue has overshadowed the others: Congress has been in gridlock because of sharp disagreement between Democrats and Republicans over whether to open the coastal waters of the Atlantic and Pacific to oil and gas drilling.

For the third time in three days, President Bush on Thursday called on lawmakers to lift offshore drilling bans.

"If you want to take pressure off price we ought to be sending a signal that the United States is going to find oil right here in our own hemisphere," he told a West Virginia Coal Association meeting.

On Capitol Hill, there seemed to be no interest in compromise.

Instead, Republicans saw the call for more domestic drilling as political gold. They're hoping to use it as a way to outflank Democrats in an election year when voters are looking to Washington for answers to high gasoline and other energy costs.

"They're like a dog with a bone and they're not letting go," said one Democrat about the incessant GOP push for offshore oil development.

Democrats know well that opinion polls show the public, reeling under high gasoline prices, favors more domestic energy development. So they've countered with their own drilling message.

"Democrats are for drilling," House Majority leader Steny Hoyer of Maryland insisted this week, repeating the assertion several times for emphasis. "We're not necessarily for drilling where they (Republicans) want to drill."

The Democrats argue oil companies already have 68 million acres of federal land and offshore waters available under government leases that they could pursue.

With the public showing little sympathy for oil companies, congressional Democrats have targeted oil companies' profits, hoping to take some of the attention away from the GOP assault over offshore drilling.

That argument was given a boost this week with another round of huge oil industry profit announcements. Exxon Mobil Corp. said Thursday it earned $11.68 billion in the second quarter, the most ever by the U.S. corporation.

"The top five oil companies are now on track to hit $160 billion in profits for the year," said Rep. Edward Markey, D-Mass., releasing a report that showed much of those profits are used to buy back stock and not invest in new production.

But Democratic proposals to tax windfall profits of the five largest oil companies and repeal some of their tax breaks also have gone nowhere, ending in more partisan fights, GOP filibusters and a promise of a presidential veto from the White House.

"My Republican colleagues are buying the line of Big Oil," Senate Majority Leader Harry Reid of Nevada complained this week.

"Surely Americans are tired of Republicans delaying and rejecting every effort Democrats make to solve our nation's (energy) problems," said Reid as it became increasingly certain that Congress was punting on energy — at least until fall.

Senate Republican leader Mitch McConnell of Kentucky said energy is "the No. 1 issue" facing the country and that "the American people are clamoring for legislation that will bring down the price of gas."

It's an assertion Democrats would not challenge. But that doesn't mean the two parties were any closer to agreeing what to do about it.

As lawmakers pushed to leave town — in many cases to face angry voters on the campaign trail — there was little reason to think that will happen.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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