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At Salt Lake conference, Exxon chief warns against windfall tax
This is an archived article that was published on sltrib.com in 2006, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Battered by hurricanes and lambasted by politicians for reaping record profits, the oil industry still managed last year to meet a growing demand for petroleum products and did so with less environmental impacts than ever.

That refrain echoed through Grand America Hotel on Monday and Tuesday as 1,600 members of the National Petrochemical Refiners Association met in Salt Lake City, in part to pay tribute to one of their long-time leaders, Sinclair Oil owner Earl Holding (whose other enterprises include the Grand America and other hotels, as well as Snowbasin and Sun Valley ski areas).

But the focal point of the annual meeting was to review ways that petrochemical manufacturers and refineries can streamline operations and deal with government regulators while meeting the ever-increasing demand for gasoline, diesel fuel, home heating oil, jet fuel, lubricants and other chemicals crucial to the American way of life.

Tuesday's featured speaker, Exxon Mobil Corp. chairman and chief executive Rex Tillerson, emphasized that way of life will suffer if Congress imposes punitive taxes on the industry - such as a proposed windfall profits tax - or lays out more mandates about how it goes about business.

"I know of no example in our industry when government intervention has produced a long-term benefit to the American consumer," said Tillerson, citing the failure of earlier price controls and windfall profits taxes. "The history of our industry is littered with the waste and negative impacts of government attempts to interfere with the efficient workings of the market."

He added that market forces, not government regulations, also have driven industry to use more ethanol, reduce sulfur content in gasoline and diesel fuel, and to adopt other environmentally friendly practices that reduce pollution.

Utah Sen. Orrin Hatch agreed with Tillerson's assessment that Congress knows far less than the marketplace about the best way for the U.S. to become energy independent. A windfall profits tax is not the way, he said. "I do not believe punitive taxes which reduce R&D [research and development] and destroy jobs are the answers consumers are looking for at the pump."

Although a group of protesters had gathered outside the hotel Monday, accusing the industry of being behind the three-year-old war in Iraq, Association President Bob Slaughter said their point was off target. Removing the terrorist-spawning regime of Saddam Hussein was the incentive for attacking Iraq, not gaining access to the country's crude oil supplies, he said.

The only mention of Iraq came when the meeting began, he said, when a moment of silence was observed for those who had died.

mikeg@sltrib.com

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