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Associated Press: Carnahan pushes windfall tax on oil companies

EXTRACT: Last week, five of the world’s largest oil companies – BP PLC, Chevron Corp., ConocoPhillips, Exxon Mobil Corp. and Royal Dutch Shell PLC – said their combined income in the second quarter was $34.6 billion, up 36 percent from a year earlier.

THE ARTICLE

CHRISTOPHER LEONARD
Associated Press

ST. LOUIS – U.S. Rep. Russ Carnahan said Wednesday that big oil companies like Exxon Mobil Corp. should be subject to a windfall tax on their record-breaking profits that come amid high oil and gasoline prices.

The Missouri Democratic congressman made that statement while promoting an energy bill he crafted last week that he hopes will pass when the House reconvenes after its summer recess. The bill would re-impose some royalty payments on oil companies and invest the money in alternative fuel research.

“I believe it’s time we also looked at reinstating a windfall profit tax considering the record profits these oil companies have been taking on the backs of consumers,” Carnahan said at a news conference.

Last week, five of the world’s largest oil companies – BP PLC, Chevron Corp., ConocoPhillips, Exxon Mobil Corp. and Royal Dutch Shell PLC – said their combined income in the second quarter was $34.6 billion, up 36 percent from a year earlier.

Carnahan couldn’t name any other lawmakers who have committed to supporting his bill, but he noted that it was released only last week. He said he’s confident there will be at least some bipartisan support in Congress when representatives return after Labor Day.

“They’re going to get an earful that people want action now,” Carnahan said.

On Wednesday, light sweet crude prices for September delivery rose $1.02 to $75.93 a barrel in midday trading. The average U.S. retail price of a gallon of regular unleaded gasoline was $3.001 on Wednesday, up from $2.926 a month ago, according to AAA.

Calls for a windfall tax have gone unheeded in Washington over the last year as oil prices have climbed. But the idea has gained at least some traction, even among Republicans.

Republican Pennsylvania Sen. Arlen Specter, chairman of the Senate Judiciary Committee, said in April that a windfall profits tax, along with measures to stem concentration of market power among a few select oil companies, could offer eventual relief to consumers hurting at the gas pump.

“I believe that we have allowed too many companies to get together to reduce competition,” Specter said.

President Bush said soon after that taxing enormous oil industry profits is not the way to calm Americans’ anxieties about pain at the gas pump.

Carnahan said Wednesday his bill would re-impose royalties that oil companies were required to pay to drill on publicly owned land. He said money from the royalties would be steered to the U.S. Department of Energy where it would fund research into alternative fuels and new efficient automobiles.

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