4:28pm

Thu May 12, 2011
It's All Politics

Senate Oil Hearing: Of Tax Breaks And Unicorns

A dog and pony show.

That's what Sen. Orrin Hatch (R-UT) called Thursday's Senate hearing at which top executives of the nation's five largest oil companies appeared, summoned by Democrats who wanted the businessmen to explain why their companies still needed certain tax breaks even as they posted eye-popping profits.

Hatch even had a photo of a dog sitting atop a pony enlarged into a chart to help make his point. And the senator seemed mighty proud of his joke which elicited the following exchange with Senate Finance Committee Chair Sen. Max Baucus:

SEN. BAUCUS: Well, who's the horse, and who's the dog?

SEN. HATCH: I think we both know. (Laughter) I know who the
horse's ass is, I'll put it that way. It's perfectly — I shouldn't've
said that. Elaine is going to give me heck when I come home, I'll tell
you...

That was essentially the way it went Thursday, with the partisan jibes going back and forth between the senators and more jousting between the Democratic senators and the oil industry executives.

The stated reason for the hearing was for Senate Democrats to explore with the energy executives why their industry, with its huge profits from higher gas prices, should still be allowed to benefit from $21 billion annually in tax breaks.

But it was also about political posturing by all sides.

For Democrats, it was about surfing on voter unhappiness over high gas prices, Democrats wanted to be seen as taking on the oil industry whose unpopularity typically rises with gas prices.

The oil company tax benefits issue was at least a twofer and maybe even a threefer for Democrats. Not only were they talking about punishing the oil industry; they could also be seen as trying to address, at least in a relatively small way, the federal government's deficits and debt by asking the oil companies to make a sacrifice knowing full well that they wouldn't. That would only enhance their usefulness as a target.

Also, it was a chance for Democrats to try and link Republican lawmakers to the oil industry since Republicans opposed the idea of singling out the energy companies for a repeal of tax benefits that other industries enjoyed.

For Republicans, it was also about riding the wave of popular unhappiness over high gas prices.

But the hearing allowed them to stick it to the Obama Administration for, they said, getting in the way of domestic production and wanting higher prices for fossil fuel prices in order to raise demand for renewable and green energy.

It was also an opportunity for them to reinforce their enduring message that Democrats are all about taxing and spending.

For the energy executives, the hearing was an opportunity to defend their industry. They weren't being unreasonable, they said, in not wanting to part with the tax benefits. They just didn't like being singled out.

It also gave them the chance to publicly air the threat that a higher tax burden could mean they would do less exploring or producing of oil in the U.S. And that would mean fewer American jobs and fewer taxes paid to the U.S. Treasury.

Oh, and the oil executives, also used the opportunity to ding the administration, though more gently than Senate Republicans, for not more aggressively approving oil production in all the places the industry would like to drill.

John Watson, Chevron Corp.'s chairman and CEO, summed up the industry's position in his opening statement:

... The most sensible path is simple. 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. Allow us to develop our nation's vast energy resources and strengthen, don't weaken, our ability to compete against large national oil companies who are major players in the U.S. and global energy markets.

In a hearing of several hours there are always a few moments that get remembered amid all the verbiage.

Among those that fit the bill Thursday:

Sen. Chuck Schumer (D-NY) brought unicorns into the picture:

First, one of my colleagues suggested that this hearing is
nothing more than a dog-and-pony show. Well, you'd have an easier time convincing the American people that a unicorn just flew into this hearing room than that these big oil companies need taxpayer subsidies. That's the real fairy tale...

To which Sen. Pat Robert (R-KS) responded:

(Chuckles.) Very difficult to follow the unicorn from New York. (Laughter.) Who has a very sharp horn. Are you all right over there? (Laughter.) Sometimes a unicorn can sort of morph into a rhinoceros. And you don't want to mess with a rhinoceros, so. At any rate — I'm not making assertations (sic), there, Chuck. Yet.

So not only was there all the political posturing, there was a menagerie of images of animals, real and fanciful.

Then there was Sen. Robert Menendez (D-NJ) who asked ConocoPhillips Chairman and CEO Jim Mulva if a company press release that described the opposition of Democratic Party lawmakers to the favorable oil industry tax treatment as "unAmerican."

MENENDEZ: ... Did you make those accusations lightly or did you really mean to question my patriotism and the patriotism of the 28 other U.S. senators who are co-sponsors?

MULVA: Nothing was intended personally or anything like that...

And so it went. Copyright 2011 National Public Radio. To see more, visit http://www.npr.org/.