Democrat questions oil companies after record profit announcements
House Energy and Commerce Committee Chairman Frank Pallone Jr. (D-N.J.) is questioning the country’s biggest oil companies after they posted record profits amid high oil and gasoline prices.
Pallone sent letters to Exxon Mobil, Chevron, BP and Shell demanding answers about the companies’ latest earning reports and taking aim at the companies’ use of the profits for stock buybacks, which give more money to shareholders.
“As one of the largest private oil companies in the world, your company is positioned to help alleviate Americans’ pain at the pump, but I am concerned that you are more focused on rewarding company executives and shareholders,” he wrote to each of the companies.
Exxon, Chevron, Shell and BP have said in recent weeks that they made $17.9 billion, $11.6 billion, $11.5 billion and $8.45 billion respectively between April and June of this year — when energy prices were soaring. They also announced that they expect to buy back more shares of their stocks, giving more money to shareholders by increasing the price of their stocks.
In the letters, Pallone asked for information about how the profits will impact spending on executives, stock buybacks, dividends that the companies pay to shareholders and spending on both fossil fuel and renewable energy production.
He also said that his committee is “investigating what oil companies could and should be doing to help bring down gas prices.”
Gasoline prices on Wednesday were around $4.16 per gallon on average in the U.S., down more than 85 cents from their peak in June. But the $4.16 figure may still feel high to consumers, as prices are still up by about a dollar compared to a year ago.
The letters come as Democrats seek to pin the blame for high oil prices on fuel companies, with the House having passed legislation in May that would outlaw selling fuel at an “excessive” price during an energy emergency.
At the time, however, market analysts blamed high prices on Russia’s invasion of Ukraine and the coronavirus pandemic rather than price gouging.
Asked for comment, Exxon spokesperson Casey Norton said in an email that the company increased its oil and gas production in the Permian Basin by about 130,000 barrels per day compared to the first half of 2021 and increased its refining output — in which oil is turned into gasoline — by 180,000 barrels per day.
Norton also said that the company is expanding its refining capacity by about 250,000 barrels per day in the first quarter of 2023.
BP spokesperson JP Fielder confirmed receipt of Pallone’s letter but did not remark on its contents when asked for comment. The Hill has also reached out to Chevron and Shell.