Democrats on Capitol Hill have a bone to pick with oil companies after they raked in record profits last year thanks to high prices at the pump, even as they call for less production to combat climate change.
Recent fourth-quarter financial filings show annual profits of roughly $36 billion for Chevron and nearly $56 billion for Exxon Mobil, shattering records and driving renewed calls from Democrats for Big Oil to be slapped with a windfall profits tax.
But the leading proponents of such a tax also advocate for less oil drilling because of its environmental impacts and for the Biden administration to further restrict energy production on federal lands and in waters, positions that analysts and energy companies say only drive prices higher amid a global supply shortage.
“It’s a little bit hard to know where to begin because … that stands on a platform of misinformation,” said Sen. Sheldon Whitehouse, Rhode Island Democrat. “What’s sad is that with these massive profits, these companies that talk green when they go to [the NATO climate summit] have chosen to basically pay off executives and shareholders rather than invest in the technologies that will move us away from danger.”
Exxon Mobil, Chevron, BP, Shell and TotalEnergies made a combined $190 billion in profits last year, according to an analysis cited by CNBC.
The whopping cash flow was due to average gasoline prices at one point topping $5 from Russia’s war against Ukraine and global demand outpacing supply. Markets determine the price of oil and gasoline, undercutting Democrats’ price gouging claims.
But the reality of a volatile energy market hasn’t stopped the White House from reverting to talking points that consumers are being ripped off after Exxon Mobil made history with the highest-ever profit for a Western oil company.
“It’s outrageous that Exxon has posted a new record for Western oil company profits after the American people were forced to pay such high prices at the pump amidst [Russian president Vladimir] Putin’s invasion,” White House spokesperson Abdullah Hasan said in a statement. “The latest earnings reports make clear that oil companies have everything they need, including record profits and thousands of unused but approved permits, to increase production, but they’re instead choosing to plow those profits into padding the pockets of executives and shareholders while House Republicans manufacture excuse after excuse to shield them from any accountability.”
Exxon CEO Darren Woods said that its numbers “clearly benefited from a favorable market” but that its production “provided the energy and products people needed as economies began recovering and supplies became tight.”
Sen. Ed Markey, Massachusetts Democrat and a leading proponent of a windfall profits tax, argued that Big Oil’s complaints about the anti-fossil fuel rhetoric from President Biden are all for show so that they can purposely keep supply down and prices high.
“They already have an area the size of Indiana that they have leased from the American people that they are not drilling upon,” Mr. Markey said. “If they really do have a concern about the need to drill for more oil and [natural] gas, there has been nothing stopping them over the last decade. The reality is they profit from having a shortage of supply.”