June 27, 2022

It’s time to stop profiteering at the pump

By Lindsay Owens, Hebah Kassem

Amid the ongoing atrocities in Ukraine, rising gas prices, and the existential threat of climate change, policymakers in Washington have a long list of crises to address. But there’s one step that could help mitigate all of them: reducing our dependence on oil — and the giant oil and gas companies who profit from it.

For decades, we’ve allowed big oil and gas companies to enrich themselves at the expense of our families, communities, and environment.

Now these companies are seizing a moment of geopolitical unrest to pad their pockets even more. Oil companies are celebrating some of their biggest profits in years. In the first three months of 2022 alone, ExxonMobil raked in a record $5.5 billion, ConocoPhillips $5.8 billion, and Chevron $6 billion.

On quarterly earnings calls with their shareholders, big oil CEOs can’t stop bragging about how the crisis in the Ukraine is a great excuse to keep prices high and bring in historic profits — while consumers literally pay the price.

Just listen to the CEO of Texas-based Pioneer Oil. When a reporter asked the CEO whether the company would consider taking measures to reduce prices after Russia’s invasion of Ukraine, he replied: “No.”

Why? He explained: “It’s all about the shareholders. Our shareholders own this company. They want a return of cash.”

Pioneer Oil isn’t the only one: 59 percent of oil and gas executives recently told the Dallas Fed that “investor pressure to maintain capital discipline” — i.e., to keep profits soaring — is the primary reason publicly traded oil companies are throttling supply despite high prices.

If you think these CEOs are worried about the toll high gas prices are having on families trying to get their kids to school or drive to work, think again. As Diamondback’s CEO told investors this month: “I think what matters most…is that we’re returning cash to shareholders.”

As long as we depend on oil and gas to fuel our cars, heat our homes, and power our electric grid, we will remain vulnerable to the bottomless greed of fossil fuel executives, their shareholders, and a volatile global market.

Unless we fight back, Big Oil profiteers will continue adding to their profits — and to those of the authoritarian petrostates they’ve long been in bed with.

The good news is, there are many policy tools at our disposal to rein them in.

House Democrats are advancing legislation that would grant the Federal Trade Commission expanded authority to crack down on profiteering energy companies charging excessive or exploitative prices for fuel.

Congress is also considering a Big Oil Windfall Profits Tax, which would make it a lot less lucrative for big oil companies to exploit moments of crisis. The revenue raised from the tax on price gouging would go back to families to give them direct relief while we do everything we can to quickly transition away from our reliance on fossil fuels.

However, our work cannot stop there. Russia’s invasion of Ukraine has laid bare the inherent risks of fossil fuel dependency not only for consumers’ wallets, but for our national security and the future of our planet.

Fortunately, one long-overdue solution sits before the U.S. Senate: a suite of investments in secure sources of homegrown, affordable, clean energy.

A bold reconciliation bill could make it $10,000 cheaper for families to electrify their home to sidestep the rising cost of heating from gas. The bill could also lower electricity costs by doubling the expansion of wind and solar power to create more competition with gas.

Congress has a narrow window of opportunity to stop profiteering at the pump and secure a more stable, sustainable future for all. It’s time to act — before it’s too late.

Lindsay Owens is the executive director of Groundwork Collaborative. Hebah Kassem is acting director of the Living Economy Program at the Sierra Club.