NEW YORK (CNNMoney.com) -- Lawmakers grilled executives from the world's five largest publicly traded oil companies Tuesday, criticizing them for taking tax subsidies and not investing in renewable resources amid record prices for oil and gasoline.

"Americans are hoping that the top executives from the five largest oil companies will tell us that these soaring gas prices are just part of some elaborate hoax," said Ed Markey, D-Mass, chairman of the House Select Committee on Energy Independence and Global Warming. "Unfortunately, it's not a joke."

Markey slammed executives from Exxon Mobil (XOM, Fortune 500), Royal Dutch Shell (RDSA), BP (BP), Chevron (CVX, Fortune 500), and ConocoPhillips (COP, Fortune 500) for their opposition to eliminating about $18 billion in tax breaks over a ten year period amid record profits for the industry.

"Last year these companies alone made over $123 billion in profit," said Markey. "What is the oil industry doing with all this profit? Unfortunately, it goes as much to financial engineering as to renewable engineering."

Several lawmakers, mostly Democrats, want to take the tax break away from oil companies and use the money to subsidize renewable energy projects.

"This is where we should be putting scarce resources, not into areas that probably don't need our help," said Oregon Democrat Earl Blumenauer.

Shell Oil Company president John Hofmeister, said that the energy supply outlook was "sobering" and that the U.S. needed to tackle the energy quandary with programs akin to the Manhattan Project, or Apollo moon launch.

Tax breaks: A hard nut to crack

The oil industry, along with the Bush administration, argue that it's unfair to target the oil industry when these tax breaks are available to all manufacturers. They also say the breaks are essential to encourage domestic oil production and reducing the country's dependence on foreign oil.

"I do not believe that funding renewable energy by taxing current forms of energy serves American customers very well," said John Shadegg R-Arizona.

Stephen Simon, Senior Vice President, Exxon Mobil Corp. reiterated that point. "Imposing punitive taxes on American companies will discourage the investments needed to safeguard our energy security. The pursuit of alternative fuels must not detract from investments in oil and gas," he said.

The oil executives urged the panel to open up areas off the U.S. east and west coasts for oil and gas drilling, arguing that bringing more supply to market is one of the best ways to lower prices.

"The U.S. government restricts supply to American consumers," said Shell's Hofmeister.

"Open up the 95 percent of the outer continental shelf that's off limits," said Peter Robertson, vice chairman of Chevron.

Most drilling off the U.S. coasts has been banned since the 1970s. A proposal to lift the ban surfaced in 2006, but was defeated. But with sky-high oil prices and growing demand worldwide, interest in offshore U.S. oil has been revived.

"We all know that we have resources off the coast, and these can be developed," said Rep. Marsha Blackburn, R-Tenn.

Other lawmakers were far less sympathetic to the executives.

Markey hammered Exxon's Simon over the company's investment in renewable energy. "Why is Exxon Mobil resisting the renewable energy revolution?" asked Markey.

Simon said Exxon has given $100 million to Stanford to study renewables. "$100 million?" said Markey. "But you made $40 billion last year."

When pressed, Simon said Exxon believes the current generation of renewable energy options will not be able to significantly meet demand.

Referring to reports showing that low income people are paying 10 percent or more of their income on gas Markey said, "So your message to them is you can't do anything for them," he said.

Exxon has long said it is in the business of oil, and that it prefers to leave renewable energy up to the renewable energy companies. Although the company has received some praise - even from its critics - for its investments in cutting-edge battery technology.

The House has tried to repeal the tax break several times, only to have it shot down in the Senate and face a veto threat from President Bush.

With oil trading at over $100 a barrel and Americans forking out over $3 a gallon for gas, the oil industry has come under fire for its record profits over the last few years. Exxon Mobil made $40 billion in 2007 alone, and the other big companies have all posted record profits in the billions.

Critics say the oil companies deliberately keep supplies of gasoline tight, and there have been calls to break up the big firms and enact a windfall profits tax.

The industry has argued they need to be big to compete with large state-owned oil companies from places like Russia and China. They also say that while the raw numbers are high, their profit margin - at around 9 percent - is roughly in line with other industries.

Markey concluded the hearing with what sounded like warning - urging the oil companies to invest in renewables and do something to lower the price of gas before what he promised would be several more congressional hearings.

"To the extent that you don't have to take all of this as profit and you can lower your prices, I urge you to do so," he said. "My grandfather always said, you should try to start from where you know you'll end up."