Gov. Jim Doyle announced Tuesday that he will subpoena top oil company executives under Wisconsin's consumer protection and trade laws to answer questions about their profits earned after Hurricanes Katrina and Rita.
The public hearing, scheduled for Dec. 1 in Milwaukee, will seek answers from oil companies to explain their record profits earned after the national disasters. Doyle intends the hearing to center on consumers' ability to pay their bills for gasoline and heating oil.
'We will also call on industry experts, independent consumer protection advocates and business leaders to provide testimony,' Doyle said in a statement. 'And we will look at the effect these record prices are having on Wisconsin families not only at the gas pump, but as they pay their winter heating bills.'
Oil companies' profits have soared in recent months, with the world's top three oil producers reporting record profits in the third fiscal quarter. ExxonMobil, the world's largest oil company, reported last week its third-quarter earnings rose to a record $9.92 billion, up from $5.68 billion a year earlier. The firm had revenue of $100.72 billion, up from $76.38 billion. British Petroleum and ConocoPhillips, numbers two and three in the world respectively, also had record third quarters.
The American Petroleum Institute, which represents the United States' oil and natural gas industry, responded to the subpoena by saying that profits in their industry are in line with and even lower than other industries when measured against scales and that market forces are responsible for their profits.
'Our industry has been investigated countless times over the last decade by federal and state authorities. Every single investigation has shown the exact same thing, which is that market forces, supply and demand, are determining prices,' Richard Karp, a senior policy analyst with the API said.
'We are confident as an industry that this investigation will show that same thing as all the other ones have. We welcome another investigation, as it is another chance to demonstrate the integrity of our industry,' Karp added. The industry is also currently under investigation by the U.S. Federal Trade Commission for allegations of price gouging after the hurricane.
