Getting answers from Big Oil
by Gov. Jim Doyle
     Last month, as a result of subpoenas issued by my Administration, executives from the world's five largest oil companies came to Milwaukee to testify under oath about how, following one of the largest natural disasters to hit America, they could justify reaping billions of dollars in profits from the pockets of Wisconsin's working class families.
This hearing was about getting answers. We brought these executives here to force them to look the people of Wisconsin in the eye and tell us where all the extra money went in the weeks following Katrina -- and where it's going --  every time we pay our heating bill. And we asked them how they, as honest corporate citizens, could take advantage of such a disaster.
      The oil companies basically said it is all a matter of supply and demand. Of course, we had no gas lines in Wisconsin and were told repeatedly there was no shortage. Yet we still had to pay as much as $3 per gallon for weeks on end.
      It was striking to see how these oil companies -- who also happen to be four out of the five largest U.S. producers of natural gas -- refused to acknowledge that they have any civic responsibility for this. At a time when Americans of all walks of life were coming together for the victims of Hurricane Katrina -- giving blood, donating money and clothing, serving in the National Guard, volunteering for relief organizations in the Gulf Coast area -- these oil companies seized the opportunity to make the largest corporate profits in U.S. history.
      Even as they posted record profits, no company was willing to contribute to heating assistance for low and moderate income families. People in Wisconsin don't have much of a choice when deciding whether to turn the heat on during our long, cold winters.
      We allowed citizens to submit their own questions for the oil executives over the Internet. And not surprisingly, the executives had the hardest time answering some of the questions from everyday Wisconsin citizens.
      One asked, "When gasoline went up by 70 cents a gallon, who got the 70 cents?" None of the executives had an answer. But considering that these oil companies posted more than $30 billion in profits last quarter, it's pretty obvious who made that money.
      David Rowicki from Appleton wondered what made oil companies different from the rest of industry. "I worked in the paper industry for 40 years," he said. "When the price of our raw material (wood pulp) went up, our profits went down. Why is it that when the price of your raw material (crude oil) goes up, your profits go up?"
      David made a very good point. So good, in fact, that none of the executives could offer a coherent answer other than, "It's complicated."
      But Dr. Mark Cooper, the Director of Research for the Consumer Federation of America, was able to answer that question. He said it is very simple: these companies have "market power." This allows them to control the price of their product much more than in other industries, and is a big reason why we are seeing these record profits.
      Let's not forget that the oil companies were doing pretty well even before the hurricane. In 2004, these companies made $80 billion in profits ? or about $800 for every household in America. This year, the unprecedented, unexplained rise in gas prices and home heating will cost an average family in Wisconsin an extra $2,000. And Wisconsin companies like Roundy's estimate that for every cent diesel fuel prices increase, it costs their business an additional $20,000.
      I wish these executives could hear from the families of Wisconsin -- as I do everyday -- about how paying more to stay warm this winter will be putting a pinch on Christmas this year. Or from the small business owners who are struggling to make up this enormous expense. Unlike with the oil companies, for these businesses, when expenses go up -- profits go down.
      I believe American consumers deserve a refund. In Wisconsin, our consumers have already been overcharged by $113 million. Since the oil companies are unwilling to give consumers any relief, that obligation now falls to the federal government. Congress and the President should take action to force these companies to give a refund to American consumers. There is a bill in Congress that would do exactly that, but so far it has not even been scheduled for a vote.
      We will deliver a report of our findings from this hearing to Congress, the Bush Administration, and Wisconsin's Congressional delegation in hopes they will act to force the oil companies to give American consumers the refund we deserve. This is a national problem, and it demands national action.
      Wisconsin didn't cause this problem, and we certainly cannot solve it on our own. But we have shown we can have an impact, and as Governor, I will continue to fight to get answers from the big oil companies, and get Wisconsin citizens a refund.