‘Big Oil’s Slippery Six’ Testify To Congress About High Gas Prices And Lie

Update to Senate To Call ‘Big Oil’s Slippery Six’ Back To Testify About Their Price Gouging On Gas Prices.

The Washington Post reports, House panel grills oil company executives on high gasoline prices:

The top executives of “the slippery six” of the nation’s largest oil and gas companies testified before Congress on Wednesday, at a time when high gas prices have become a political flash point in Washington and across the country.

The executives from BP America, Chevron, Devon Energy, ExxonMobil, Pioneer Natural Resources and Shell USA faced tough questions from Democrats on the House Energy and Commerce Committee about their purported role in Americans’ pain at the pump.

Gas prices surged after Russia invaded Ukraine in late February, hitting [a national average of] $4.33 a gallon on March 11 before falling to $4.16 a gallon Wednesday, according to AAA. Prices of crude oil have dropped much more steeply, from a peak of more than $139 per barrel in early March to about $107 on Tuesday.

Democrats hammered oil executives at Wednesday’s hearing over why gas prices have not fallen in tandem with crude prices, accusing the fossil fuel firms of engaging in “war profiteering” at the expense of American consumers.

“War profiteering” has a specific meaning and is unlawful. The War Profiteering Prevention Act, H.R. 400 (2017) makes war profiteering — overcharging in order to defraud or profit excessively from war, military action, or reconstruction efforts — a felony subject to up to 20 years in prison and fines of up to $1 million or twice the illegal profits of the crime. This smacks of old school collusion, price fixing, profiteering and price gouging.

“These prices are constraining our constituents’ budgets and patience,” said Rep. Diana DeGette (D-Colo.), chair of the Energy and Commerce subcommittee on oversight and investigations.

The executives defended themselves from such claims, noting that energy industry analysts have said it’s natural for gas prices to fall more slowly than crude prices. The trend is known in the industry as the “rockets and feathers” phenomenon [“When oil prices rise, gas prices quickly follow, shooting up like a rocket. When oil prices fall, gas prices slowly come down like falling feathers.” Otherwise known as profiteering or price gouging.]

“I want to be absolutely clear: 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 Michael Wirth, chairman and CEO of Chevron.

This is patently false. The retail price of gas at the pump is set by anti-competitive retailers. There is often collusion and price fixing among the largest retailers. From August of 2021, FTC to crack down on gasoline price manipulation, ‘unlawful’ U.S. oil industry mergers (excerpt):

The Federal Trade Commission will crack down on practices that may harm consumers at the gasoline pumpand seek to deter “unlawful” mergers in the oil and gas industry, FTC Chair Lina Khan told the White House in a letter last week.

The letter, obtained by Reuters, was addressed to White House economic adviser Brian Deese and promised to start an investigation of abuses in the “franchise market” for retail fuel stations, among other steps.

Deese, in an initial Aug. 11 letter to Khan, had asked the FTC to investigate why “gas prices tend to rise more quickly to adjust to spikes in oil prices than they fall when the price of oil declines.” [Rockets and feathers again.]

Khan replied: “I am especially interested in ways that large national chains may ‘restore’ higher prices through collusive practices, and I will direct our staff to investigate any signs of this type of conduct.”

Democrats also argued that fossil fuel companies have been using their soaring profits amid the war in Ukraine to enrich investors through stock buybacks and dividends, rather than to lower gas prices.

“We are here to get answers from the oil companies about why they’re ripping off the American people,” said Chairman Frank Pallone Jr. (D-N.J.). “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. Instead, they’re buying back their stock at an estimated cost of about $40 billion this year.”

Pallone asked the executives whether they would commit to doing “whatever it takes” to lower prices for American consumers, including by limiting stock buybacks and dividends to shareholders. None of the six executives committed to doing so.

Because the investor class aka the predator class on Wall Street demands ever higher returns to recoup their investment losses from the oil industry collapse from 2014-2020, the public be damned.

Scott Sheffield, the CEO of Pioneer Natural Resources, declined to dial back dividends, the quarterly payments that investors receive for owning shares. “The answer is no on dividends,” Sheffield said.

[R]ising gas prices pose a political liability for Democrats ahead of the midterm elections in November, when the party could lose control of Congress. Top Democrats, including House Speaker Nancy Pelosi (Calif.), have huddled to discuss legislative strategies for curbing prices at the pump in recent weeks.

One idea under consideration is to tax the “windfall” profits that oil companies have reaped amid soaring crude oil prices sparked by Russia’s invasion of Ukraine. Sen. Sheldon Whitehouse (D-R.I.), one of Congress’s most vocal climate advocates, has introduced a bill to impose such a tax, but its path forward is unclear.

[S]everal Democrats sought to walk a fine line, urging the energy companies to increase oil and gas production to alleviate supply crunches in the near term, while also investing in renewable energy to address the climate crisis in the long term.

“Long term, we need to wean ourselves off of this dependence on fossil fuels,” said Rep. Kim Schrier (D-Wash.). “But in the short term, we need you to step up” by ratcheting up production.

As the House hearing wore on, a group of Senate Republicans representing oil-producing states gathered reporters for a news conference at which they expressed amazement and exasperation that Democrats were pushing energy companies to produce more gas and oil, not less.

Several made reference to an October hearing of the House Oversight and Reform Committee, where some of the same executives testified about their companies’ purported role in spreading misinformation about climate change — and faced Democratic criticism for not doing more to wean the global economy off their product.

“They’re saying you need to invest more in terms of capital. Six months ago, these same House members were telling the executives you need to commit right now to producing less oil and gas,” said Sen. Dan Sullivan (R-Alaska), who called Wednesday’s hearing a “show trial.”

You should note that the climate change denying post-policy Republicans have no legislative ideas to bring down the price of gas in the short term, or to ween the U.S. off of fossil fuels that malignant actors like OPEC, Russia and Venezuela can manipulate and hold the world hostage. All they have is the false propaganda that “Democrats are responsible for higher gas prices.”  It is the fossil fuel industry which sets prices, not the government. Republicans are the lickspittle lackeys of the Carbon Monopoly and addicted to its campaign contributions.

The Democrats’ position is supported by a recent new study. Jessica Corbett reports, New Analysis Details ‘Master Class in War Profiteering’ by US Oil Giants:

An analysis released Tuesday by a trio of groups highlights how Big Oil has cashed in on various crises over the past year—including the Covid-19 pandemic, Russia’s war on Ukraine, and the global climate emergency—while enriching wealthy shareholders.

The new report from BailoutWatch, Friends of the Earth, and Public Citizen explains that there are two main tactics that fossil fuel giants use to benefit investors: “First, they repurchase shares of their own stock and retire them, reducing the number of shares outstanding and driving up the value of each share remaining in investors’ hands.”

“Second, they increase dividends, the quarterly payments investors receive for owning shares,” the report continues. “Oil and gas dividends, historically bigger than other sectors’, have spiked in recent months, outstripping every other industry group.”

“Amid high gas prices and war in recent months, oil and gas companies have kicked both tactics into overdrive,” the groups found, based on reviewing public statements and securities filings from the 20 largest U.S.-headquartered fossil fuel corporations.

During the first two months of 2022, “seven companies’ boards authorized their corporate treasuries to buy back and retire $24.35 billion in stock—a 15% increase over all of the buybacks authorized in 2021,” the report states. “Six of those decisions came in February 2022, after Russian warmongering lifted stock prices. The total since the start of 2021 is $45.6 billion.”

The analysis also reveals that in January and February, 11 companies raised their dividends—”often extravagantly”—and notes that “nine were increases of more than 15% and four were increases of more than 40%.”

“Six companies have begun paying additional dividends on top of their routine quarterly payments, including by implementing new variable dividends based on company earnings—a way of directing windfall profits immediately into private hands without any possibility of investment, employee benefits, or other uses,” the document points out.

“So far in 2022, these companies have started paying out an initial $3 billion in special windfall dividends,” the report adds. “Four of these companies—Pioneer, Chesapeake, Conoco, and Coterra—announced variable dividends beginning August 2021, as prices began to rise.”

As I said, the investor class aka the predator class on Wall Street demands ever higher returns to recoup their investment losses from the oil industry collapse from 2014-2020, the public be damned.

Chris Kuveke of BailoutWatch said in a statement that “Big Oil is living the second half of their unspoken mantra ‘socialize losses, privatize gains.’

“Two years after winning multi-billion dollar bailouts from the Trump administration, these newly flush companies are pocketing billions from an international crisis, and they don’t care how it affects regular Americans,” Kuveke added.

1 thought on “‘Big Oil’s Slippery Six’ Testify To Congress About High Gas Prices And Lie”

  1. Huffingtonpost reports, “Republicans Want Oil Execs To Stop Apologizing And Do Less To Avert Climate Disaster”, https://www.huffpost.com/entry/oil-executives-testify-republicans-energy-committee_n_624f4b7fe4b0587dee74cb92

    Two days after the U.N.’s dire warning on climate change, Republicans gave fossil fuel executives a pat on the back and a pass on saving the planet.

    Executives from six major oil and gas companies testified during a congressional hearing this week as gasoline prices neared record highs and a calamitous report on the urgency of fighting climate change was released.

    The hearing before a House Committee on Energy and Commerce subcommittee focused on whether the industry is prioritizing profits over increased domestic production, and lawmakers from both parties called on industry executives to get to work and boost output in order to provide relief at the pump. It was also, however, a rare opportunity for lawmakers to press major oil executives on what they are doing to combat climate change, which their industry has played an outsized role in driving.

    This week, a new United Nations report warned that global greenhouse gas emissions must peak no later than three years from now, then be slashed nearly in half by 2030 in order to stave off the worst effects of climate change.

    But that’s nothing to worry about, according to Republicans. Instead, two GOP members of the oversight and investigation subcommittee urged industry leaders to stop catering to environmentalists and instead double down on the very energy sources that have put the world on a path toward catastrophic and irreversible climatic change.

    Rep. Dan Crenshaw (R-Texas) touted the greenhouse gas emission reductions that could result if all coal-generated power were replaced with natural gas.

    “That’s the argument you should be making instead of behaving like you have Stockholm syndrome, like your civility to the radical environmentalists in Congress and this administration will one day get them to like you,” Crenshaw told the oil industry executives. “They will never like you.”

    “Please stand up for your work, your employees and your consumers,” he added. “Speak the truth. Don’t pander to what they want on the left, because Americans need you.”

    Among other things, Crenshaw’s comments ignore the suffering and devastation that climate change-fueled heat waves, drought and extreme weather are already causing around the globe — and that will grow worse with every additional degree of warming.

    Rep. Bill Johnson (R-Ohio), another huge beneficiary of industry campaign cash, gave an equally obsequious lecture, telling the executives they deserve thanks and praise for what they do “to keep the lights on” and “quite literally to fuel modern life as we know it in America.”

    “But there’s a problem,” Johnson said. “Many of you have big advertising budgets. Why won’t you tell that story? I’m not going to name names, but we’ve all seen the TV commercials from Big Oil, filled with solar panels, green climate messaging about how you’re diversifying your portfolio and how you’re embracing liberal, progressive values.”

    “What’s been your return on investment with that effort?” Johnson continued. “You’ve taken a shellacking today from the Democrats. Do they seem impressed by your efforts to show your allegiance to their anti-fossil fuel agenda?”

    Johnson fired off a series of yes-or-no questions about whether the executives are proud of the products and jobs they produce. After getting a series of yes answers, he called on the executives to use his line of questioning as a template for telling their story.
    He accused the industry of “chasing radical green progressive values.”

    The oil and gas sector has given Johnson $725,609 over his political career, more than any other industry.

    Republican lawmakers’ rhetoric about fossil fuels being superior to renewables — cheaper and more reliable — not only highlights the division in Washington over future energy policy, it also underscores one of the main takeaways from the new U.N. report: that the biggest obstacle to aggressive climate action is not technology or the affordability of renewables; it is political forces.

    Renewable energy is rapidly getting cheaper and more competitive. From 2010 to 2019, the price of solar energy and lithium-ion batteries fell 85%, while wind dropped 55%, according to the report.

    But politicians and conservative think tanks repeatedly attack green energy as not yet ready for prime time. A major example of right-wing climate misinformation played out last winter, when a powerful winter storm triggered blackouts across Texas. Crenshaw and Johnson joined a chorus of Republicans who initially blamed the grid outages on the failure of wind turbines and solar panels.

    In fact, the primary cause of the deadly blackouts wasn’t that renewables didn’t work in the extreme winter weather. It was that instruments froze at coal, nuclear and natural gas power plants.

    Crenshaw voiced no hope that existing fossil fuel infrastructure would prove more reliable the next time Texas experiences extreme weather.

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