A sudden interruption in oil supplies sent prices and profits skyrocketing, prompting Exxon's chief executive to call a news conference right after his company announced that it had chalked up record earnings.

"I am not embarrassed," he said. "This is no windfall."

That was January 1974, a few months after Arab oil producers cut back on supplies and imposed their short-lived embargo on exports to the United States. Oil executives, including J. K. Jamieson, Exxon's chief executive at the time, were put on the defensive, forced to justify their soaring profits while the nation was facing its first energy crisis.

Three decades later, their successors are again facing contentions that oil companies are making too much money and have failed to expand production.

Politicians and other critics are asking why the industry allowed its refining capacity to tighten.

Exxon Mobil, the world's largest oil company, said yesterday that its third-quarter net income jumped 75 percent, to $9.92 billion. Its profit in the first nine months of this year - $25.42 billion - already equals its full-year earnings for 2004. This year's sales, which topped $100 billion in the last quarter, are expected to exceed those of Wal-Mart.

Another oil giant, Royal Dutch Shell, reported a 68 percent jump in profits yesterday, to $9.03 billion. Chevron is expected to post a profit of more than $4 billion today.

This year is shaping up as an exceptionally lucrative one for the oil industry, thanks to strong global demand, tight supplies and high prices for oil and natural gas. While the idea that the Bush administration was considering imposing a windfall profits tax was knocked down yesterday by officials, longstanding resentments against Big Oil are resurfacing and could end up imposing some additional burdens on the industry.

The sense that government should step in to curb the phenomenal wealth and power often enjoyed by oil companies goes back to Exxon Mobil's corporate ancestor from the late 19th century, the Rockefeller oil trust known as Standard Oil.

Today, Republicans and Democrats alike, aware of the politically sensitive issue of high energy prices, are putting increasing pressure on the oil and gas industry to return some of its profits. The ideas include forcing the industry to invest in more refining capacity, to increase inventories to cushion energy shocks, or to provide money directly to the government program that helps low-income people pay heating bills.

Simmering resentment of the oil industry has heated up as gas lines reappeared in some cities this summer and gas prices rose above $3 a gallon, a record even when adjusted for inflation. Gasoline prices, already well above what Americans are accustomed to, spiked after two Gulf Coast hurricanes curbed domestic production and briefly pushed oil prices above $70 a barrel.

This winter, Americans can expect to pay much more for heating their homes than they did last year.

Senator Bill Frist, the Republican leader, said yesterday that executives of major oil companies will be summoned to Capitol Hill to testify about high energy prices. Some of Mr. Frist's language harked back to the 1970's and early 1980's when cries of price gouging at gasoline pumps were common.

"If there are those who abuse the free enterprise system to advantage themselves and their businesses at the expense of all Americans," he said, "they ought to be exposed, and they ought to be ashamed."

Senator Chuck Schumer, Democrat of New York, was even more heated: "Big Oil behemoths are making out like bandits, while the average American family is getting killed by high gas prices, and soon-to-be-record heating oil prices."

This week, J. Dennis Hastert, Republican of Illinois and the speaker of the House, called on companies to build or expand refineries in the United States and explain when a pipeline deal will be reached to bring oil and natural gas from Alaska.

Oil companies, however, bristle at suggestions they should be taxed more. The last time a windfall tax was imposed on the industry, intended to punish it by capturing additional revenue beyond the taxes collected through the normal corporate income tax, was the period 1980 to 1988.

Oil executives, echoing arguments heard in boardrooms around the world, say their business is highly volatile, with alternating periods of high and low prices. Only seven years ago, oil was at $10 a barrel.

"What happens when we don't have a year like this one?" asked Red Cavaney, the president of the American Petroleum Institute, the industry's main lobbying group.

The lure of higher margins from the refining business - rather than Mr. Hastert's encouragements - prompted one Houston energy concern, Marathon Oil, to announce plans to expand its refinery in Garyville, La. The company expects to increase production there to 425,000 barrels a day by 2009 from 245,000 barrels a day currently.

Exxon was forced to defend its record of investing in refining capacity. The company said it had increased capacity at its existing refineries by 2 percent a year over the last decade, bringing in an additional 400,000 barrels a day through successive expansions.

For the full year, Exxon plans to invest about $18 billion for both exploration and refining, a 21 percent gain from last year.

"You have to look over a longer term," Henry Hubble, Exxon Mobil's vice president for investor relations, said in a conference call with analysts yesterday. "If you're trying to encourage supply growth, it seems odd to put in disincentives. You've got to let the market work."

For the last quarter, the company said its capital investments totaled $4.4 billion, up 22 percent from the quarter last year.

But in a sign that oil companies are making more money than they can plow back into their business, Exxon returned $6.8 billion to shareholders either by buying back shares or paying dividends.

In an interview on Fox News 10 days ago, Lee R. Raymond, Exxon's chief executive, sought to quell some of the criticism. "Profit is not a dirty word," he said. "And it's absolutely required in our industry to have an adequate level of profit to be able to continue to invest."

Later in the program, when asked whether Exxon's profits were "obscene," he said: "No, I don't think they're obscene. I don't think they're obscene at all."

On Tuesday, the chief executive of BP, Lord John Browne, also tried to dismiss the issue of higher taxes. BP reported that its third-quarter profit rose 34 percent, to $6.46 billion.

When asked how much pressure he was feeling about a windfall tax, Lord Browne quickly replied, "None." He said higher prices would have a cooling effect on demand, which would lower prices, and make a windfall tax unnecessary.

But not everyone is persuaded by the argument that higher taxes would stunt investments and curb future production.

"The industry says a windfall profit tax would limit investments," said Philip K. Verleger, a consultant and a former senior adviser on energy policy at the Treasury Department. "That's wrong."

"You can come up with a tax that would not impact investments but might in fact stimulate them," Mr. Verleger added. "You allow the industry to recoup its investments and make a good return. Then you look at incremental revenue and tax that."

Because of the hurricanes, Exxon said that its average oil and natural gas production fell 4.7 percent in the quarter. The company produced 2.45 million barrels of oil a day. Natural gas production fell 9 percent, to 7.7 million cubic feet per day. But Exxon said its production in the quarter would still have dropped 1 percent, excluding the effect of the hurricanes.

Senator Jack Reed, Democrat of Rhode Island, yesterday called on eight of the largest American energy concerns, including Citgo Petroleum, which is controlled by the government of Venezuela, to contribute 10 percent of their profits to heating-aid programs this winter.

But Samuel W. Bodman, the energy secretary, said he was against any effort to impose taxes on the oil industry as a way of assisting poor families with energy costs. He said the Bush administration was considering requiring the industry to keep emergency stockpiles of gasoline and other refined products to guard against supply disruptions.

This year's backlash may be reminiscent of what the industry went through during the oil shocks of the 1970's. But oil companies, subject to price controls throughout much of the decade, seem better able to fend off their critics today.

"Our public image," Mr. Jamieson, the Exxon chief executive in 1974, said then, "is at a low ebb."

Heather Timmons contributed reporting from London for this article.

© 2005 New York Times Company

CHOICE AMERICA NETWORK

It's getting hard to keep track of all the lies we've been told. Here's a quick cheat sheet:

We now know that Cheney lied to the American people about his involvement in the effort to smear Joe Wilson.

Three months after reportedly receiving a briefing about Wilson's trip to Niger from George "Slam Dunk" Tenet, and then telling Scooter Libby that Plame may have helped arrange her husband's trip, the Vice President went on national TV and told Tim Russert he didn't have a clue about the situation: "I don't know Joe Wilson... I don't know who sent Joe Wilson... I have no idea who hired him and it never came up."

We now know that Karl Rove lied about his involvement, too.

Back in September 2003, when Rove was asked if he had "any knowledge" about the Plame leak, he answered with an unambiguous "No."

Since then, we've learned that Rove was actually up to his Turd Blossom in Plamegate, discussing Plame and her role at the CIA with Matt Cooper and Bob Novak, and taking part in what a source familiar with his four visits to the grand jury characterized as "an aggressive campaign to discredit Wilson through the leaking and disseminating of derogatory information regarding him and his wife."

We now know that Scooter Libby also lied about his involvement.

Libby told Pat Fitzgerald that he first learned Plame's identity from Tim Russert. But his own notes show that it was actually his boss, Dick Cheney, who first clued him in about Plame. (Russert, of course, has said he learned of Plame's identity by reading Novak's column, but that's a conundrum for another blog!).

And we now know that Rove and Libby also lied to Scott McClellan, who then -- knowingly or not -- lied to reporters about the two men's involvement.

When pressed today about the fact that in October 2003 he had "categorically" assured reporters that Rove and Libby "were not involved" in the Plame leak, McClellan made it clear that he was just passing on "the assurances that I had received on that." In other words, I only lied to you because they lied to me.

Potential Bonus Presidential Lie: In June 2004, when asked whether he stood by his promise to fire anyone found to have leaked Plame's identity, President Bush (taking a cue from Rove) answered with an unambiguous "Yes." But the New York Daily News reports that Bush knew that Rove was involved in the leak two years ago. So why, a year later, was he still acting like he had no idea who'd been involved?

Let's put aside the legal arguments for a moment and just focus on this glut of lying. Clearly, these guys knew that what they were up to should be kept in the shadows. Hence Rove's desire to have his conversation with Cooper be kept on "double super secret background," his self-assessment that he'd "already said too much" to Cooper, and Libby's request that Judy Miller identify him as a "former Hill staffer" instead of the usual "senior administration official."

Cheney, Rove, and Libby obviously felt that their actions had to be covered up.

But what they were covering up was much more than the outing of Valerie Plame. They were covering up the way the White House had used lies and deception to lead us into a war that was reckless and unnecessary -- what Lt. Gen. William Odom, National Security Agency director under Reagan, has called "the greatest strategic disaster in United States history."

The reason why Cheney, Rove, and Libby were so aggressive in attacking anyone who questioned their rationale for war is because, by the summer of 2003, it was becoming embarrassingly clear how wrong they had been about Iraq -- wrong about WMD, wrong about flowers thrown at our feet, wrong about the cost of the war. Had their incompetence not been so grotesquely manifest, there would have been no need for the attack on Wilson -- and the resulting coverup -- that has now landed them all in such legal hot water.

If Rove and Libby are indeed indicted (adding Cheney to our Merry Fitz-mas gift list would just be getting greedy), I believe it will shake up our government in a way we haven't seen since Watergate.

To borrow a phrase from that era, let me make myself perfectly clear: I'm not saying that Plamegate is the same as Watergate. I'm saying it's worse. Much, much worse. No one died as a result of Watergate, but 2,000 American soldiers have now been killed and thousands more wounded to rid the world of an imminent threat that wasn't.

Could there be anything bigger?

After getting a fumbling cipher like George W. Bush elected president, the powers-behind-the-throne must have believed they were untouchable and could get away with anything -- including lying about WMD, outing a CIA agent, and, perhaps, lying to a special prosecutor.

Like Nixon, their mindset was "if you try to get in our way we'll destroy you." (See how quickly those keep-us-safe national security guys were willing to jeopardize an intelligence asset in the name of covering their asses.) And their hubris caused them to over-reach.

Like my old Greek pal Icarus, they flew too close to the sun... and now it looks like they, and their multitude of lies, are about to come crashing down.

© 2005 Huffington Post

CHOICE AMERICA NETWORK

A special counsel is focusing on whether Vice President Dick Cheney played a role in leaking a covert CIA agent's name, according to people familiar with the probe that already threatens top White House aides Karl Rove and Lewis Libby.

The special counsel, Patrick Fitzgerald, has questioned current and former officials of President George W. Bush's administration about whether Cheney was involved in an effort to discredit the agent's husband, Iraq war critic and former U.S. diplomat Joseph Wilson, according to the people.

Fitzgerald has questioned Cheney's communications adviser Catherine Martin and former spokeswoman Jennifer Millerwise and ex-White House aide Jim Wilkinson about the vice president's knowledge of the anti-Wilson campaign and his dealings on it with Libby, his chief of staff, the people said. The information came from multiple sources, who requested anonymity because of the secrecy and political sensitivity of the investigation.

New York Times reporter Judith Miller, who has now testified twice before a federal grand jury probing the case after spending 85 days in jail for refusing to cooperate with Fitzgerald, wrote in yesterday's New York Times that Fitzgerald asked her whether the vice president ``had known what his chief aide,'' Libby, ``was doing and saying'' regarding Wilson, a critic of the war in Iraq.

Fitzgerald has told lawyers involved in the case that he hopes to conclude soon -- the grand jury's term expires Oct. 28, although it could be extended -- and there is a growing sense among knowledgeable observers that the outcome will involve serious criminal charges. ``Fitzgerald is putting together a big case,'' Washington attorney Robert Bennett, who represents Miller, said on the ABC-TV program ``This Week'' yesterday.

Possible Charges

The charges could range from a broad conspiracy case to more narrowly drawn indictments for obstruction of justice or perjury, according to lawyers involved in the case. Charges are considered less likely on the law that initially triggered Fitzgerald's probe, which makes it illegal to deliberately unmask an undercover intelligence agent, because of the difficulty in meeting that statute's exacting standards for prosecution.

Lea Anne McBride, a Cheney spokesman, declined to comment yesterday on whether the vice president, 64, has been contacted by Fitzgerald about his status in the case, except to say: ``This is an ongoing investigation, and we are fully cooperating.'' Randall Samborn, a Fitzgerald spokesman, declined to comment. Calls to Robert Luskin, Rove's attorney, and Joseph Tate, Libby's lawyer, weren't returned.

There's no indication Fitzgerald is considering criminal charges against the vice president, who gave unsworn testimony to investigators last year. One option for Fitzgerald is to outline his findings about Cheney's role if he files a final report on the investigation.

Questioned Officials

Fitzgerald, 45, has also questioned administration officials about any knowledge Bush may have had of the campaign against Wilson. Yet most administration observers have noted that on Iraq, as with most matters, it's Cheney who has played the more hands-on role.

One lawyer intimately involved in the case, who like the others demanded anonymity, said one reason Fitzgerald was willing to send Miller to jail to compel testimony was because he was pursuing evidence the vice president may have been aware of the specifics of the anti-Wilson strategy.

And both U.S. District Court Judge Thomas Hogan and an appellate-court panel -- including David Tatel, a First Amendment advocate -- said they ruled in Fitzgerald's favor because of the gravity of the case.

Pace of Probe

Katy Harriger, a political scientist at Wake Forest University in Winston-Salem, North Carolina, who has written extensively about special-counsel investigations, said the pace and trajectory of Fitzgerald's probe suggests it will end with the indictment of Rove, Libby or both.

Harriger said she anticipates indictments in part because of the special prosecutor's willingness to jail Miller. ``That's not something you do unless you really have something more going on that isn't obvious to the public,'' she said.

Larry Barcella, a former assistant U.S. attorney for the District of Columbia, said the recent activity in the case suggests criminal charges are likely, although not in connection with the 1982 law making it illegal to disclose a covert agent's identity.

A more likely focus is possible ``false statements, conspiracy or obstruction of justice,'' said Barcella, now a defense lawyer for the Washington-based law firm of Paul, Hastings, Janofsky & Walker. ``It's obviously not good that Rove and Libby have spent so much time before the grand jury.''

An Active Participant

To make a case against Cheney as part of a conspiracy indictment, Fitzgerald would have to show the vice president was an active participant in a decision to smear Wilson, Barcella said. ``It's a case most easily made if you can prove a person knowingly entered into an agreement to do something illegal,'' he said. ``Beyond that, it can be tricky.''

Fitzgerald's status differs in one potentially important respect from the independent counsels who investigated alleged wrongdoing during earlier administrations. They reported to a panel of appellate judges, while Fitzgerald reports to Attorney General Alberto Gonzales, who at least theoretically must approve any indictment.

Given the prospect of both protracted criminal cases and then civil lawsuits, it now seems possible the issue will bedevil the final years of Bush's presidency, much as the Iran- contra affair burdened President Ronald Reagan's second term and the Monica Lewinsky scandal plagued President Bill Clinton's.

No Leaks

While there have been virtually no leaks out of Fitzgerald's office, and even the subjects of his investigation are unsure about his intentions, White House officials and Bush supporters are fearful that recent developments spell legal jeopardy for Rove, the central strategist behind Bush's political campaigns and much of his presidency, and Libby, a key architect of the Iraq war strategy.

When the investigation began, White House officials asserted that neither Rove nor Libby played any role in the outing of Plame, and both aides told Fitzgerald that they learned of her identity from journalists.

In her Times account, Miller said she told Fitzgerald and the grand jury that Libby, 55, raised the subject of Wilson's wife during a meeting with Miller on June 23, 2003. That was before Wilson, 55, went public in a Times op-ed piece with his accusation that Bush and his aides had ``twisted'' intelligence findings to justify invading Iraq, although administration officials knew he was privately critical.

Contracted Account

While Miller didn't say Libby had identified Plame as a covert agent, her account calls into question Libby's assertion that he first learned of Plame's identity from reporters.

Miller, 57, said she went to jail rather than testify because, unlike other reporters, she didn't feel Libby had given her specific and voluntary permission to speak about their confidential conversations. She relented when Libby contacted her by telephone and letter last month, saying he had always expected her to testify.

Those communications with Miller may pose legal problems for Libby. His letter to her stated that ``the public report of every other reporter's testimony makes clear that they did not discuss Ms. Plame's name or identity with me.''

Miller wrote in her Times article that Fitzgerald asked her to read that portion of the letter aloud to the grand jurors and asked for her reaction to Libby's words. She said that part of the letter had ``surprised me because it might be perceived as an effort by Mr. Libby to suggest that I, too, would say we had not discussed Ms. Plame's identity. Yet my notes suggested that we had discussed her job.''

`Stupid Thing to Do'

Bennett, Miller's attorney, yesterday called that part of Libby's letter ``a very stupid thing to do.'' Other lawyers suggested it could become part of any obstruction-of-justice charge Fitzgerald might bring.

Rove's testimony also has been contradicted by others, such as Time magazine reporter Matt Cooper. He said his July 2003 conversation with the White House aide focused more on Wilson and his wife than Rove had testified, while adding Rove had not identified her by name. There is also at least one discrepancy between Rove's version and that of columnist Robert Novak, who first identified Plame as a Central Intelligence Agency operative in July 2003, according to persons familiar with their accounts.

Rove, 54, returned to the grand jury for a fourth time on Oct. 14 and testified for more than four hours. His lawyer, Luskin, who has spoken frequently with reporters, has gone from public optimism that his client faces little legal danger to cautiously noting only that Fitzgerald hasn't told them Rove is a ``target.''

Wilson's Assignment

Wilson was dispatched by the CIA in February 2002 to investigate reports, since discredited, that Saddam Hussein's regime was trying to buy uranium in Niger as part of a nuclear- weapons program. After Bush cited similar reports in his Jan. 28, 2003, State of the Union speech and the U.S. invaded Iraq in March of that year, Wilson began telling some journalists anonymously that the claim was questionable.

That prompted behind-the-scenes administration attempts to discredit Wilson. In his June 2003 meeting with Miller, Libby told her, in the context of a conversation critical of the CIA, that Wilson's wife worked for the spy agency, according to an account published in the Times yesterday.

Wilson went public with his criticism on July 6, 2003. In his Times piece, he concluded: ``Some of the intelligence related to Iraq's nuclear weapons program was twisted to exaggerate the Iraqi threat.''

Talked with Reporters

Over the next week, Libby and Rove talked to reporters, on the condition they not be identified, about Wilson's article and the fact that his CIA-employed wife may have had a role in giving him the Niger assignment.

Plame's identity was first published by Novak on July 14. He cited ``two senior administration officials'' as the sources of the information that Plame, 42, suggested Wilson for the Niger trip. Novak hasn't commented publicly on those sources.

Miller never wrote a story about Wilson or his wife -- although in one of her notebooks, dated July 8, 2003, a notation appears for ``Valerie Flame.''

One of the subplots is the role played by the New York Times. In addition to Miller's personal account, the Times yesterday published a separate 5,800-word piece that criticized both Miller and the way the newspaper handled the story.

Never Saw Notes

The article reported the paper's publisher, Arthur Sulzberger Jr., and its executive editor, Bill Keller, unequivocally supported their reporter in her legal battle although ``they knew few details about Ms. Miller's conversations with her confidential source,'' and ``did not review'' her notes.

Miller, who wrote many influential pre-war war stories about Hussein's purported weapons of mass destruction that the Times later acknowledged were flawed, told the grand jury she recommended in 2003 that the newspaper pursue the Plame story. Jill Abramson, the newspaper's managing editor, said Miller never made any such recommendation.

In an interview yesterday, Wilson said that once the criminal questions are settled, he and his wife may file a civil lawsuit against Bush, Cheney and others seeking damages for the alleged harm done to Plame's career.

If they do so, the current state of the law makes it likely that the suit will be allowed to proceed -- and Bush and Cheney will face questioning under oath -- while they are in office. The reason for that is a unanimous 1997 U.S. Supreme Court decision ruling that Paula Jones' sexual harassment suit against then-President Bill Clinton could go forward immediately, a decision that was hailed by conservatives at the time.

CHOICE AMERICA NETWORK