Democrats accuse oil companies of ‘scamming’ gas prices | United States government and politics

By MATTHEW DALY – Associated Press

WASHINGTON (AP) — House Democrats on Wednesday accused oil companies of “ripping off the American people” and putting profits before production as Americans suffer from steadily rising gasoline prices during the war in Ukraine.

“At a time of record profits, Big Oil is refusing to ramp up production to provide the American people with much-needed relief at the gas pump,” said Rep. Frank Pallone, DN.J., chairman of House Energy and Commerce. Committee.

Oil executives, testifying before Congress for the second time in six months, responded that oil is a global market and oil companies do not dictate prices.

“We don’t control the market price of crude oil or natural gas, or refined products like gasoline and diesel fuel, and we have no tolerance for price gouging,” Chevron’s CEO said. Michael Wirth.

Facing pointed questions from Democrats, Wirth, ExxonMobil CEO Darren Woods and other executives said their companies have no plans to halt dividend payments to shareholders or restrict buyouts. actions that have enriched the shareholders and managers of the company. The six companies in the hearing posted $77 billion in profits last year, they testified.

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The hearing comes as President Joe Biden ordered the release of one million barrels of oil a day from the country’s Strategic Petroleum Reserve for six months in a bid to control soaring energy prices while the United States and its allies imposed severe sanctions. on Russia for its invasion of Ukraine. The national average gasoline price was $4.16 a gallon for Wednesday, down from $2.87 a year ago, according to AAA.

Biden and other Democrats blamed Russian President Vladimir Putin and the US oil industry for the rise, citing reports that oil companies have made record profits in recent months as prices rose after the invasion of Ukraine by Russia.

“It’s Biden’s price hike,” countered Rep. Cathy McMorris Rodgers of Washington state, the committee’s top Republican.

Noting that prices were rising before Russia invaded Ukraine in late February, McMorris Rodgers said Americans “are too smart and didn’t fall for it,” according to Biden and other Democrats. She called the hearing “purely political.”

Woods said Exxon had halted its investments in Russia and was pulling out of operations there. The company is increasing production in the United States, Woods said, including in the oil-rich Permian Basin of New Mexico and Texas. Exxon is also increasing production outside the United States, including “a world-class development in Guyana,” he said.

Rep. Kim Schrier, D-Wash., said gas prices were near $5 a gallon in her Seattle-area district. Her constituents “are crazy, and they should be,” she said, citing the record profits oil companies are reaping.

“It looks like scam. It even looks like profit,” Schrier said. Prices at the pump have not come down in recent weeks along with crude oil prices, she and other Democrats noted.

In times of war and high prices, “oil companies should not return profits to shareholders,” she said, urging oil executives to restore production to pre-pandemic levels.

Wirth, Chevron’s CEO, said his company produced a record amount of oil in 2021, while making sure to “return value to shareholders” through higher dividends and share buybacks.

“They’re not mutually exclusive. We can do both,” he said.

Democrats have introduced bills in the House and Senate to impose a windfall tax on oil profits, though the idea generated little momentum on Capitol Hill. West Coast senators, including Senate Commerce Committee Chair Maria Cantwell of Washington state, called on the Federal Trade Commission to investigate possible price manipulation on the West Coast, where prices in California exceed $6 a gallon.

“Americans have a right to know why one of our most important products doesn’t have the right amount of transparency and oversight,” Cantwell said during a hearing on Tuesday. Targeting what she called the “mysterious middle of the supply chain,” Cantwell said lawmakers and the FTC should ensure that — like during the 2001 energy crisis caused by Enron — “there is no There aren’t a lot of ‘smart guys in the room’ hurting consumers because they think we can’t figure out what’s going on.”

Rep. Tim Walberg, R-Mich., blamed Biden for high gas prices, citing the cancellation of the Keystone XL pipeline and a moratorium on new drilling leases on federal lands. Walberg said he was disappointed that neither Energy Secretary Jennifer Granholm nor any other administration official appeared at the House hearing “to answer for the failure of the government’s policies.” ‘administration”.

Biden has called on Congress to impose financial penalties on companies that lease public land but do not produce oil, a request that has so far been ignored. Biden also invoked the Defense Production Act to encourage the mining of critical minerals for electric vehicle batteries, as part of a broader campaign to reduce fossil fuel use and fight climate change. climatic.

“The bottom line is if we want lower gas prices, we need to have more oil supply right now,” Biden said last week when announcing the strategic oil release. Rising prices have hurt Biden’s approval domestically and added billions of oil export dollars to the Russian government as it wages war on Ukraine.

Oil companies have pledged to boost domestic production, but progress is slow. Executives point to supply chain and labor constraints resulting from the COVID-19 pandemic, as well as investors’ demands for yield. They applied for more federal permits to allow for additional leases.

Besides Exxon and Chevron, the other companies represented at the hearing were Shell, BP, Pioneer Natural Resources and Devon Energy.

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