House Democrats on Wednesday accused oil companies of “ripping off the American people” and putting profits before production at a time when Americans are suffering from rising gasoline prices during the war in Ukraine.
“In a time of record profits, Big Oil is refusing to increase production to give the American people much-needed relief at the pump,” said Rep. Frank Pallone, D-R, chairman of the House Committee on Energy and Commerce. .
Oil executives countered that crude is a global market and oil companies do not dictate prices. It is the second time they have testified before Congress in six months.
“We do not control market prices for crude oil and natural gas, or for refined products such as gasoline and diesel, and we do not tolerate price gouging,” said Chevron CEO Michael Wirth.
Before the incisive questions of the democrats, Wirth; ExxonMobil CEO Darren Woods and other executives said their companies have no plans to suspend dividend payments to shareholders or restrict share buybacks, which have enriched shareholders and company managers. The six companies that participated in the hearing posted $77 billion in profits last year, the executives said.
President Joe Biden has ordered 1 million barrels a day from the nation’s strategic oil reserve to be put into circulation for six months in a bid to rein in energy prices, which have soared since the United States and its allies imposed strong sanctions against Russia for its invasion of Ukraine. Regular gasoline averaged $4.16 a gallon ($1.09 a liter) on Wednesday, up $2.87 from a year ago, according to the American Automobile Association. English).
Biden and other Democrats have blamed the increase on Russian President Vladimir Putin and the US oil industry, citing reports that companies in the sector have made record profits in recent months.
“This is Biden’s price gouging,” replied Rep. Cathy McMorris Rodgers, the ranking Republican on the committee.
Noting that prices were already rising before Russia invaded Ukraine in February, McMorris Rodgers said Americans “are too smart and haven’t believed” this claim by Biden and other Democrats. He said the hearing was “purely political.”
Woods indicated that Exxon has suspended its investments in Russia and is withdrawing from that country. The company is ramping up production in the United States, Woods said, including the oil-rich Permian Basin in New Mexico and Texas. Exxon is also increasing extraction outside the US, including “world-class development in Guyana,” he noted.
Democratic Rep. Kim Schrier said gas prices are close to hitting $5 a gallon in her Seattle-area district. Her voters “are angry, and why not,” said Schrier, who cited the unprecedented profits that oil companies are making.
“It feels like a scam, like speculation,” he added. Prices at gas stations have not fallen in recent weeks in line with crude prices, Schrier and other Democrats stressed.
In a time of war and high prices, “oil companies shouldn’t be sending profits to shareholders,” he added, urging executives to bring production back to pre-pandemic levels.
Wirth, Chevron’s CEO, said the company pumped a record amount of oil in 2021, and also made sure to “return value to shareholders” through higher dividends and share buybacks.
“They are not mutually exclusive. We can do both,” she pointed out.