WASHINGTON – Officials at six major oil and gas companies on Wednesday shielded themselves from criticism that they are trying to boost corporate profits by refusing to produce more oil and gas, pointing to bias over who is responsible for the rise in energy prices.
They appeared before a House committee because high petrol prices had become a central issue before the midterm elections in November. Republicans have blamed the Biden administration’s regulations and environmental policy for the shortfall in energy production, while Democrats have questioned why companies can’t cut petrol prices because oil prices have fallen slightly since Russia’s invasion of Ukraine.
Trying to evade political debate, executives said they were not involved in price increases and were simply responding to global commodity prices beyond their control. They further said that they are working to transfer to clean energy.
“We’re here to get answers from the big oil companies about why they’re robbing the American people,” said Frank Palon Jr., a Democrat from New Jersey and chair of the Energy and Commerce Committee. “At the time of record gains, Big Oil is refusing to increase production.”
Oil officials have made exceptions to the Democrats’ allegations, but have remained less important in their response.
“Because oil is a global product, shale does not set or control the price of crude oil,” said Gretchen H., president of Shale USA. Watkins told the committee in his prepared remarks. “Today’s crisis and the pressure on hydrocarbon supply and prices underscore the urgent need to accelerate energy transfers.”
Michael Worth, Chevron’s chief executive, stressed that the company “has no tolerance for price increases.”
With his approval rating falling to a new low due to months of high inflation, President Biden has struggled to explain the rise in gas prices to the American people. In an effort to capitalize on widespread support for a crippling embargo on Russia, the administration has sought to label the recent rise in gas prices as “Putin’s price hike.”
But Republicans have tried to pin the rise on the president’s neck, noting that gas prices have been rising for a year long before Mr Putin’s invasion of Ukraine. They have used the concern over high gas prices as their main argument to voters about the need for a change in leadership.
Republicans have beaten Mr. Biden to revoke permits for the Keystone XL oil pipeline, as well as to suspend new leases for oil wells on federal land. White House officials have tried to explain that no policy is responsible for the rise in gas prices.
In fact, the easing of epidemic restrictions has increased the demand for gas when supply is not growing fast enough. Both supply and demand are driven by factors beyond the control of Mr. Biden and Congress.
Still, the attacks seem to be working. In a recent survey by Quinnipiac University, only 24 percent of respondents said they think rising gas prices are a result of the war in Ukraine, with more Americans blaming the Biden administration’s policies.
A recent NBC News poll shows that despite widespread support for a ban on Russian oil imports, most Americans are still worried about gas prices. Opinion polls suggest Mr Biden’s approval rating is closer to his presidency, at around 40 per cent, suggesting that Americans blame him for some of his foreign policy support.
Faced with competitive competition in November, some Democrats have pushed for a federal gas tax suspension by the end of the year. But Republicans quickly rejected the proposal, calling it a desperate attempt to appeal to voters.
Progressives have sought to use rising energy and gas prices to invest in clean energy to reduce reliance on foreign authoritarian leaders and oil companies. The UN Intergovernmental Panel on Climate Change said in a report released this week that efforts to reduce greenhouse gas emissions from oil and other fossil fuels would be significantly accelerated by limiting global warming to 1.5 degrees Celsius or 2.7 degrees Fahrenheit.
At Wednesday’s hearing, Republicans sought to capitalize on Mr. Biden’s weak position.
“This is not a price increase for Putin,” said Kathy McMurray Rogers, a Republican in Washington. “It simply came to our notice then. It’s been a steady climb since he took office. “He said Democrats are looking for another scapegoat, blaming the oil industry.
Ms Rogers and other Republicans have criticized the administration’s efforts to ease oil sanctions on Venezuela and Iran by increasing global oil supplies as well as blocking the Keystone XL pipeline, which would import more Canadian oil from that country’s oil sands. .
Russia-Ukraine war and global economy
The average price of a gallon of gasoline is about $ 1.30 higher than a year ago, in line with the price of oil, which is now below $ 100 per barrel.
Democrats have called on oil executives to increase dividends and suspend stock buybacks and to invest more in developing alternative energy and reducing petrol prices. They say their ingredients are suffering with oil companies for higher prices and are becoming increasingly annoyed.
Last week, Mr Biden said some oil companies had increased production but added that “many companies are not doing their part and are choosing to make huge profits without making extra investments to help supply.”
Anger over the oil company’s profits is not uncommon. Politicians often criticize the fuel industry for profiteering when gas prices rise, and then quietly drop their complaints when prices fall. In the last 15 years, oil and gas prices have gone up and down in three big cycles.
More recently, energy demand from the initial epidemic has recovered rapidly as vaccines have become widely available and the incidence of infections has decreased. But global oil production has not fully returned to epidemic proportions. U.S. production is a disgraceful 12 million barrels a day, nearly one million less than the record set just before the epidemic. As oil companies add rigs, the Department of Energy expects U.S. production to exceed 13 million barrels next year.
While Mr Biden has called on oil companies to increase production, Wall Street investors are urging them to be more cautious because they do not want companies to take the storm when prices are high and only lose money when prices fall again. This happened between 2011 and 2015, leading to bankruptcy.
At the moment oil companies are making record profits. Exxon Mobil said this week that its total profit for the first three months of the year could be $ 11 billion, the highest profit the company has had in a quarter since 2008, when oil prices were at শীর্ 140 a barrel.
Exxon has reduced costs and its workforce in recent years, even while increasing production in the Permian Basin, which stretches along the coasts of Texas and New Mexico and Guyana. Darren Woods, the company’s chief executive and a witness at Wednesday’s hearing, insisted that Exxon was working to reduce its greenhouse gas emissions to meet the country’s energy demand but was not responsible for the price increase.
“The uncertainty of supply in a tight market with increasing demand leads to significant price volatility – which we see today,” he said. Woods told the committee.
Scott d. Sheffield, chief executive of Pioneer Natural Resources, a large Texas producer, said his company and others could do just that to increase production quickly.
“I understand the desire to find a quick solution to the recent spike in gasoline prices,” he said, “but neither Pioneer nor any other U.S. producer can increase production overnight by launching a tap.” He noted that shortages of manpower and drilling equipment, and inflationary pressures on oil services, hampered production growth.