J. Pat Carter/AP While consumers are benefiting from lower energy prices, the Senate committee will look at how oil producers and related industry workers are suffering

A long list of witnesses from the government and private sector will give their assessment of the current state of the oil industry during what is expected to be a three-hour hearing. The hearing is set to begin at 9 a.m. EST.

Those testifying include Jay Hakes, administrator of the Energy Information Administration, which is the statistical arm of the U.S. Department of Energy; Exxon Corp.'s Chairman and Chief Executive Officer Lee Raymond and North Dakota Gov. Edward Schafer, who will speak on behalf of the Interstate Oil and Gas Compact Commission.

The price of oil is at the lowest level in a generation, making a gallon of gasoline cheaper than a trip to McDonald's. Worldwide crude oil prices fell below $13 a barrel in 1998 and are still hovering there, down from an average of $17 to $21 a barrel in the previous 10 years.

While consumers are benefiting from lower energy prices, the Senate committee will look at how oil producers and related industry workers are suffering as a result. Big U.S. oil companies cited plunging oil prices as the reason why their 1998 fourth-quarter earnings were whacked by special charges, leading to net losses, in some cases.

The U.S. oil industry, including support services, lost 21,000 jobs in the 12 months to October 1998, a decline of about 6 percent of the total oil workforce, according to the latest U.S. Department of Labor data.

In addition, there are thousands of employees whose jobs are still to be cut, in layoffs already announced by major oil companies.

J. Pat Carter/AP With crude prices so low, it is cheaper to buy foreign oil than drill for it domestically

Many of those jobs will be lost as the result of oil companies merging. The oil industry's ongoing consolidation and the pending merger of Exxon and Mobil Corp. are expected to be discussed at the hearing.

While big oil companies are surviving the current crisis, many independent oil producers, which account for a large part of the U.S. oil supply, are not faring as well.

The committee will review the problems independent oil producers are having and consider possible relief that Congress and the Clinton administration can provide, such as tax credits and buying oil for the nation's Strategic Petroleum Reserve. The reserve was created in 1973 during the Arab oil embargo to provide the United States with an emergency oil supply.

With crude prices so low, it is cheaper to buy foreign oil than drill for it domestically, which has caused U.S. oil production to reach the lowest level since 1954.

Growing U.S. dependence on oil imports is a major concern of Senate Energy Committee Chairman Frank Murkowski, an Alaska Republican, who will raise the subject at the hearing.

A lot of that oil is coming from Iraq, which has become a major supplier of oil to the U.S. market. In the first 11 months of 1998, Iraq shipped 106.93 million barrels of oil (320,000 barrels a day) to the United States, making Iraq the seventh-biggest U.S. crude supplier during the period, according to the Department of Energy.

Murkowski is very critical of U.S. oil purchases from Iraq, and has criticized the Clinton administration for seeking to lift the ceiling on the amount of oil Iraq is allowed to sell under a special United Nations oil-for-food program. That program, which began in December 1996, is an exemption to the oil embargo imposed on Iraq after it invaded Kuwait in August 1990, which led to the Gulf War.

Saudi Arabia is the largest oil supplier to the United States, followed by Venezuela, Mexico, Canada, Nigeria and Angola.