Wednesday, September 7, 2005
CONTACT: Barry E. Piatt
or Brenden Timpe
PHONE: 202-224-2551
DORGAN INTRODUCES BILL TO PROVIDE CONSUMER REBATES FROM OIL COMPANY WINDFALL PROFITS AS GASOLINE PRICES SOAR
(WASHINGTON, D.C) --- U.S. Senator Byron Dorgan (D-ND) introduced legislation Wednesday to provide consumers some relief from high gasoline prices in the form of rebates funded by targeting windfall profits rung up by major integrated oil companies.
The legislation is called the “Windfall Profits Rebate Act of 2005.”
Major oil companies have seen the price of a barrel of oil climb from $40 to more than $70 in less than 18 months, resulting in billions of dollars in windfall profit, without any significant corresponding increase in expenses.
Rapidly escalating oil prices have “drained billions of dollars” from the nation’s economy “in a massive transfer of wealth from average Americans who can’t afford it, to big oil companies who already were experiencing all-time record profits,” Dorgan said.
Dorgan’s legislation would fund the consumer rebates – paid to consumers in a tax rebate check – through a three-year, 50 percent excise tax on oil company windfall profits. Windfall profits are defined by his legislation as the portion of the price of a barrel of oil that exceeds $40.
Oil companies were already reporting all-time record profits at the $40 per barrel price level last year, and his legislation would allow those profits to be retained by the companies without being subject to the 50 percent windfall profits tax.
The windfall profits tax would be reduced dollar for dollar by investments oil companies make in new domestic oil exploration, increased or new oil refinery capacity, or renewable sources of energy, Dorgan said.
“The oil companies are reaping $7 billion a month in windfall profits, money that comes straight out of our economy and that most consumers cannot afford,” Dorgan said. “At the same time, there is no corresponding increase in expenses for them. Just massive windfall profits. Consumers need relief, and we need to get at least some of that money back into the economy.”
“We also need to provide a powerful incentive for major oil companies to not simply keep the money but do the right thing – invest in new domestic exploration and development as well as increased refining capacity – something that will help lower prices.”
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