Oil executives talk about high gas prices at the hearing

WASHINGTON – Amid a whirlwind of guerrilla warnings about who is responsible for rising energy prices, leaders of six major oil and gas companies defended themselves on Wednesday against criticism of seeking to boost corporate profits by refusing to produce more oil. and gas.

They appeared before a committee of the House of Representatives as high petrol prices became a central issue ahead of the November by-elections. Republicans blamed Biden administration regulations and environmental policies for energy shortages, while Democrats wondered why companies could not cut gasoline prices as oil prices fell somewhat after a jump after Russia’s invasion of Russia. Ukraine.

Trying to avoid political debate, leaders said they were not concerned with raising prices and were simply responding to global commodity prices that were beyond their control. They also said they are working to move to cleaner energy.

“We are here to get answers from the big oil companies about why they are robbing the American people,” said Frank Palone Jr., a Democrat from New Jersey and chairman of the Energy and Trade Committee, during the hearing. “At a time of record profits, Big Oil refuses to increase production.

Oil executives took an exception to the Democrats’ accusations, but remained silent in their responses.

“Because oil is a global commodity, Shell does not determine or control the price of crude oil,” Gretchen H. Watkins, president of Shell USA, told the commission in his notes. “Today’s crisis and the pressure on hydrocarbon supplies and prices reveal the urgent need to accelerate the energy transition.”

Michael Wirth, CEO of Chevron, insisted that the company “has no tolerance for price increases.”

As his approval ratings fell to a new low as inflation remained high for months, President Biden struggled to explain the rise in gas prices to the American people. In an effort to garner widespread support for crippling sanctions against Russia, the administration has tried to characterize the recent rise in gas prices as a “rise in Putin’s prices.”

But Republicans have tried to hang the increase on the president’s neck, noting that the price of gas has been rising for a year, long before Putin invaded Ukraine. They used concerns about higher gas prices as a key argument for voters to change leadership.

Republicans have blamed Mr Biden for revoking permits for the Keystone XL pipeline, as well as for pauses in new leases for oil wells in federal states. White House officials have tried to explain that no policy is responsible for rising gas prices.

In fact, the easing of pandemic constraints has increased gas demand 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 Quinnipiac University poll, only 24 percent said they thought rising gas prices were the result of the war in Ukraine, with more Americans blaming Biden’s policies.

A recent NBC News poll found that despite widespread support for a ban on Russian oil imports, most Americans are still worried about gas prices. Surveys show that Mr Biden’s approval rating is close to the lowest for his presidency, at around 40 per cent, suggesting that Americans hold him accountable, even if they support part of his foreign policy.

Some Democrats, facing competition in November, have called for a suspension of the federal gas tax by the end of the year. But Republicans quickly rejected the proposal, calling it a desperate attempt to please voters.

Progressives have also tried to use the jump in energy and gas prices to push for clean energy investments to reduce dependence on foreign authoritarian leaders and oil companies. The UN’s Intergovernmental Panel on Climate Change said in a report published this week that the world must significantly step up its efforts to reduce greenhouse gas emissions from oil and other fossil fuels to limit global warming to 1.5 degrees Celsius. or 2.7 degrees Fahrenheit.

Republicans at Wednesday’s hearing tried to take advantage of Mr Biden’s weak position.

“This is not a rise in Putin’s prices,” said Katie McMorris Rodgers, a Republican in Washington. “This is the rise in Biden’s prices. It’s been a steady climb since he took office. “She said Democrats were looking for another scapegoat, blaming the oil industry.

Ms. Rodgers and other Republicans criticized the administration’s so-called efforts to ease oil sanctions against Venezuela and Iran to increase global oil supplies, as well as the decision to block the Keystone XL pipeline, which would import more Canadian oil than oil. sands of this country.

The average price per gallon of gasoline is about $ 1.30 higher than a year ago, moving up in tandem with oil prices, which are now just under $ 100 a barrel.

Democrats have called on oil leaders to stop raising dividends and repurchases and to invest more in developing alternative energy and lowering gasoline prices. They said their constituents were suffering and increasingly upset by oil companies over higher prices.

Last week, Mr Biden said some oil companies had increased production, but added that “too many companies are not doing their part and are choosing to make huge profits without making additional investments to help with supplies”.

Outrage over oil companies’ profits is not uncommon. Politicians often criticize the energy industry for profiting when gas prices rise, and then quietly reject their complaints when prices fall. Over the past 15 years, oil and gas prices have moved up and down in three major cycles.

More recently, energy demand has recovered rapidly from the lull in the early pandemic as vaccines became widely available and the decline in infections declined. But global oil production has not fully returned to pre-pandemic levels. Production in the United States is just under 12 million barrels per day, which is approximately one million less than the record set just before the pandemic. As oil companies add platforms, the Department of Energy expects U.S. production to exceed 13 million barrels next year.

While Mr Biden is urging oil companies to expand production, Wall Street investors are telling them to be more cautious because they do not want companies to raise a storm when prices are high, only to lose money when prices fall again. This happened between 2011 and 2015, which led to many bankruptcies.

Oil companies are currently making record profits. Exxon Mobil said this week that its profits in the first three months of the year could amount to $ 11 billion, the most it has done in the quarter since 2008, when the price of a barrel of oil exceeded $ 140.

Exxon has cut costs and manpower in recent years, even as it increases production in the Permian Basin, which stretches across Texas and New Mexico and off the coast of Guyana. Darren Woods, the company’s chief executive and witness to Wednesday’s hearing, insisted that Exxon was working to reduce greenhouse gas emissions while meeting the country’s energy needs, but was not responsible for rising prices.

“The uncertainty of supply in the narrow market with growing demand leads to significant price volatility – this is what we see today,” Mr Woods told the committee.

Scott D. Sheffield, CEO of Pioneer Natural Resources, a major Texas producer, said his company and others could do so much to increase production quickly.

“I understand the desire to find a quick solution to the recent rise in gasoline prices,” he said, “but neither Pioneer nor any other US manufacturer can increase production overnight by launching a crane.” He noted that shortages of manpower and drilling equipment and inflationary pressures on oil services are hampering increased production.

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