Big Oil

In an opening skirmish over how much money companies should be forced to pay for oil spill damage, Democratic legislators Thursday failed to speed through legislation to raise liability caps from $75 million to $10 billion. Their effort was thwarted by Sen. Lisa Murkowski (R-Alaska), a key oil industry ally who said that the bill would end up empowering only the "biggest of the big oil" companies to drill for American's offshore resources. "This has been named 'The Big Oil Bailout Prevention Liability Act,' " said Murkowski, who objected to taking up the measure immediately.

In the wake of a huge oil leak in the Gulf of Mexico, Assemblyman Pedro Nava (D-Santa Barbara) is expected to lead a hearing Friday in Hermosa Beach on the state's ability to help cities challenge massive oil-drilling projects near homes, schools and parks. Among those called to testify before the Assembly Committee on Environmental Safety and Toxic Materials, which Nava chairs, are officials from Hermosa Beach, Culver City and Carpinteria, which are involved in costly legal battles over drilling.

Afew years ago, when SUVs still ruled American roads and gasoline prices were skyrocketing, consumers and politicians howled that oil companies were guilty of price-gouging because they refused to increase refinery capacity; the companies responded that it would be crazy to build more refineries to meet a spike in demand that was probably temporary. Now the other shoe has dropped: Demand has fallen through the floor, and oil companies are shutting down refineries as a result. And once again, consumer groups are accusing them of price-gouging.

Democratic legislative leaders tossed a few clunkers into the budget-balancing plan they crafted last week, but for the most part it's a responsible proposal that cuts deeply while preserving human-service programs and closing most of the state's $24-billion gap. Gov. Arnold Schwarzenegger is vowing to veto the package if it gets to his desk, but much of the Democrats' plan follows the governor's own suggestions.

. -- A smooth road curves toward the hulking ethanol mill that One Earth Energy will open in June. But the path to profitability might be rocky, as the fledgling company could face much larger rivals that have snapped up bankrupt mills at steep discounts. Valero Energy Corp., the country's largest oil refiner, broke into the farm-grown business last month, buying seven ethanol mills and a development site from bankrupt VeraSun Energy Corp. at a 70% markdown.

Signaling that Big Oil's heyday is over for now, ConocoPhillips posted an enormous fourth-quarter loss, driven by $34 billion in asset write-downs and plunging crude prices. It also gave a dire forecast for the next couple of years. Chairman and Chief Executive Jim Mulva said the nation's third-largest oil company was preparing for a "significant, multiyear recession." The Houston-based company's net income for the October-December period amounted to a loss of $21.37 a share, compared with a profit of $4.4 billion, or $2.71 a share, a year earlier.

Days after she was sworn in as governor, Sarah Palin began to clean house at the department of natural resources, firing and demoting several top officials and eventually appointing a new director at the agency that oversees the energy companies that provide the state with 85% of its revenue. The shake-up was an early sign that this newly elected Republican governor was not like any of her predecessors -- she was determined not to cave in to the energy industry, the state's lifeblood.

Houston-based ConocoPhillips became the latest big oil company to get out of the filling station business, agreeing Wednesday to sell its last 600 U.S. gasoline stations to PetroSun Fuel of Seattle. The purchase price wasn't disclosed, but published estimates of $800 million were considered close to the mark. The stations, largely on the West Coast, operate under the Conoco, Phillips 66 and 76 brands. PetroSun, which has been accumulating stations, said it planned major upgrades in product offerings to focus on the more profitable convenience store side of the business.

On "Exxon's profit fuels criticism" (Aug. 1.): While Rep. Nancy Pelosi (D-San Francisco) and the rest of Congress bellow about these "excessive" profits, there is never a mention that these oil companies are paying more than 40% in taxes. I would think this important in an unbiased story on the Business page. Michael O'Gara Glendale -- Exxon Mobil continues to extend its unprecedented profit streak for another quarter, the most of any company in the history of mankind.