WASHINGTON (AP) — House Democrats on Wednesday accused oil companies of “ripping off the American people” and putting profits before production as Americans suffer from ever-increasing gasoline prices amid the war in Ukraine.
“At a time of record profits, Big Oil is refusing to increase production to provide the American people some much needed relief at the gas pump,” said Rep. Frank Pallone, D-N.J., chairman of the 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 that oil companies don’t dictate prices.
“We do not control the market price of crude oil or natural gas, nor of refined products like gasoline and diesel fuel, and we have no tolerance for price gouging,” said Chevron CEO Mike Wirth.
The hearing comes as President Joe Biden has ordered the release of 1 million barrels of oil per day from the nation’s strategic petroleum reserve for six months, a bid to control energy prices that have spiked after the United States and allies imposed steep sanctions on Russia over its invasion of Ukraine. According to AAA, the national average gasoline price for regular was $4.16 per gallon on Wednesday. This is an increase of $2.87 from a year earlier.
Biden and other Democrats have blamed Russian President Vladimir Putin and the U.S. oil industry, citing reports that oil companies have made record profits in recent months, as prices have risen following Russia’s invasion of Ukraine.
“This is the Biden price hike,” countered Rep. Cathy McMorris Rodgers of Washington state, the committee’s top Republican.
According to her, prices rose before Russia invaded Ukraine in February. “The American people are too smart and have not fallen for this” claim by Biden and other Democrats, McMorris Rodgers said, calling the hearing “purely political.”
ExxonMobil CEO Darren Woods told the committee that his company stands with communities around the world “in deploring Russia’s aggression and the devastation it has inflicted on the Ukrainian people.” Exxon has halted investments in Russia and is withdrawing from operations there, Woods said.
Woods stated that Exxon has been increasing its production in the United States. This includes in Texas’s oil-rich Permian Basin. The company also is increasing production outside the U.S., including “a world-class development in Guyana,” Woods said.
Biden has called on Congress to impose financial penalties on companies that lease public lands but don’t produce oil, a request that so far has been ignored. Biden used the Defense Production Act as a way to promote the mining of vital minerals needed for electric vehicles. It is all part of a larger push to change to lessen our dependence on fossil fuels, and to address climate change.
“The bottom line is if we want lower gas prices we need to have more oil supply right now,” Biden said last week in announcing the release of oil from the strategic petroleum reserve. “This is a moment of consequence and peril for the world, and pain at the pump for American families.”
Higher prices have hurt Biden’s approval domestically and added billions of oil-export dollars to the Russian government as it wages war on Ukraine.
Biden ordered two releases of crude oil from U.S. stocks, but this has not resulted in a substantial shift in oil prices. Biden said last week he expects gasoline prices could drop “fairly significantly.”
Although oil companies pledged to increase domestic production, it has been slowing growing. The executives point out the supply chain, labor and investor constraints and demand for return and call for additional federal permits that will allow for leases.
Pallone questioned Woods, and others CEOs. They said that oil companies do not plan to stop dividend payments to stockholders. Or to limit stock buybacks that have made shareholders richer. Pallone heard that six of the companies present at the hearing had made $77 billion in profits for last year.
Other than Exxon and Chevron there were also representatives from Shell, BP and Pioneer Natural Resources. Devon Energy was not represented.
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