WASHINGTON – A House committee has asked Exxon Mobil Corp., for detailed information about a lucrative retirement package given to its former chairman, Lee Raymond, calling it an "exorbitant payout" when motorists are paying $3 a gallon for gasoline.
Raymond, who recently retired, was given a total package of nearly $400 million including salary, bonus, stock options and a one-year $1 million consulting arrangement.
The request was made as the House Energy and Commerce Committee sent letters to the country's five biggest oil companies, including Exxon Mobil, seeking detailed information about the companies' spending and investment priorities in light of huge profits over the past year as crude prices jumped to a recent high of more than $75 a barrel.
The relatively small amount invested in increasing refinery capacity "is cause for concern," said Rep. Joe Barton, R-Texas, the committee chairman, who opened a hearing into soaring oil and gasoline prices on Thursday.
In addition to Exxon Mobil, letters went to ConocoPhillips Inc., Chevron Corp., BP America, Inc., and Shell Oil Co.
Exxon Mobil spokesmen Russ Roberts said the criticism of the Raymond retirement package is "a distraction" when the discussion "should be focused on the fundamentals of why we have the high prices." He said the compensation package was approved by an independent board of directors without management input.
Roberts said that Exxon Mobil will provide all the information the House committee is requesting.
In testimony before the House panel, Guy Caruso, head of the government's Energy Information Administration, said that a shortage of excess production capacity worldwide is the primary factor behind tight markets and upward pressure on crude oil prices. "Today the cushions aren't available," he said.
Energy Consultant Daniel Yergin added the sharp run-up on crude prices over the past month stems in large part to concerns about possible supply disruptions because of the nuclear standoff with Iran, which produces 2.5 million barrels a day, and unrest in Nigeria, another major producer.
On Wednesday, the House passed legislation that would impose up to $150 million in penalties for energy companies found guilty of price gouging. With lawmakers eager to show they are doing something in response to soaring gasoline prices and huge oil industry profits, the measure breezed through the House , 389-34.
Price gouging proposals have been talked about in the Senate, especially among Democrats, but it's not clear when the issue might be brought up for consideration.
President Bush called a bipartisan group of lawmakers to the White House on Wednesday to discuss what energy measures might gain bipartisan support. The proposals all addressed the long-term energy problems, and not ways to try to reduce this summer's $3-plus gasoline prices.
"The price of gasoline should serve as a wake-up call ... that we've got an energy security problem and a national security problem and now is the time to deal with it in a forceful way," Bush said after the meeting.
Many lawmakers acknowledged little can be done in the short term.
"There is not a panacea of short term solutions to the (gasoline) price situation today because it's a demand-driven price," said Barton.
A proposal pushed by Senate Majority Leader Bill Frist to give people $100 rebate checks was all but abandoned Wednesday, ridiculed by Republicans as well as Democrats as insulting and inadequate.
A Democratic proposal for a federal gasoline tax holiday also seemed to be losing steam.
Barton promised a string of hearings in the upcoming weeks to develop energy legislation aimed mostly at the long-run. Barton said he sent letters to the major oil companies asking them for information on how they are using their earnings — especially how much is being invested in exploration, production and refinery expansions.
"We would like to be able to do something now, quickly. The truth of the matter is we can't," New Mexico Republican Sen. Pete Domenici, chairman of the Senate Energy and Natural Resources Committee, told reporters after the meeting at the White House.
The president discussed with the lawmakers a range of proposals aimed at increasing and diversifying energy supplies, an extension of tax credits for the purchase of hybrid cars and ways to encourage alternative fuels.
"I don't think there were any new proposals that had not been kicked around, tried, talked about before," said Domenici.
The House-passed price gouging legislation directs the FTC to define price gouging and calls for penalties of up to $150 million for refiners and other wholesalers and $2 million for retailers who violate the law. It covers marketers of gasoline, diesel fuel, crude oil and heating fuel.
Wholesalers and retail outlets such as corner gas stations and service station chains face civil penalties triple the amount of their unfair profit. Violators also could go to jail
"American consumers are demanding protection from price gouging," declared Rep. Sherwood Boehlert, R-N.Y.