The hearing was two days after Senate Democrats unveiled a plan Tuesday to save $21 billion over the next 10 years by eliminating tax incentives for the five companies – Chevron, Exxon Mobil, Shell, ConocoPhillips and BP America -- so the money be put toward reducing the nation's deficit. A test vote is scheduled for next Wednesday.
Senate Finance Chairman Max Baucus, D-Mont., at the outset of the hearing questioned the need for "taxpayer subsidies" for the oil giants.
Citing the companies' combined profits of $35 billion in the first quarter of 2011, Baucus said the tax breaks represent less than 2 percent of what the companies are slated to make this year. "Even without these tax breaks, these companies would clearly be highly profitable."
But Chevron Corp. Chief Executive John Watson told the senators, "Don't punish our industry for doing its job well."
"Tax increases on the oil and gas industry, which will result if you change long-standing provisions in the U.S. tax code, will hinder development of energy supplies needed to moderate rising energy prices," Watson said. "It will also mean fewer dollars to state and federal treasuries … and fewer jobs -- all at a time when our economic recovery remains fragile and America needs all three."
Prior attempts to scale back industry subsidies haven't succeeded amid intensive lobbying by the oil and gas industries, the Los Angeles Times reports, citing figures from the Center for Responsive Politics indicating the sector spent more than $145 million and employed 798 lobbyists to influence lawmakers last year.
"By undermining U.S. competitiveness, they would discourage future investment in energy projects in the United States and therefore undercut job creation and economic growth," Exxon Mobil Chief Executive Officer Rex Tillerson said of the plan to eliminate the tax incentives. "And because they would hinder investment in new energy supplies, they do nothing to help reduce prices."
"Stated simply, oil is a global commodity," Shell Oil Co. President Marvin E. Odum said. "With worldwide economic recovery under way, demand is on the rise, sending prices upward."
During the hearing, Sen. John D. Rockefeller, D-W.Va., great-grandson of the founder of Standard Oil, told the executives, "You're deeply out of touch."
"I haven't heard anybody talk about what they are doing -- what they would be willing to do -- to share in our budget problem," Rockefeller said.
Celebrity Families of 2014 [PHOTOS]