Kay Bailey Hutchison: “I wish to speak today on an amendment that has been offered on this bill that I very much hope the Senate will not agree…”

“I wish to speak today on an amendment that has been offered on this bill that I very much hope the Senate will not agree to. The Dorgan amendment, which has been offered, would institute a windfall profits tax on the major oil and gas companies. There is the belief among many in this country that oil industry profits are excessive compared to profits of other companies that do business in our country. I do not believe that is the case. In the second quarter of 2005, the oil industry earned 7.7 cents for every dollar of sales. The average profit for all U.S. industry in the second quarter was 7.9 cents for every dollar of sales. Thirteen U.S. industries earned higher profits in the second quarter than the oil and natural gas industry: banking, software and services, consumer services, and real estate. The rate of return on oil sales for the third quarter of 2005 is slightly higher, at 8.1 cents for every dollar of sales. However, the damage to the oil industry caused by the hurricanes will eat into the bottom line in future quarters. British Petroleum has estimated it will take a $700 million hit to the company's energy production and infrastructure from Hurricane Katrina and Hurricane Rita. The Congressional Budget Office estimates capital losses from Hurricanes Katrina and Rita in the energy producing industries will range from $18 to $31 billion. Reinvestment in infrastructure, both production and refining, is a critical issue.…”