The Center Square
(The Center Square) – Lawmakers grilled a panel of leading oil company executives during a Congressional hearing Wednesday over high gas prices. The executives responded that restrictive government policies play a significant role.
The panel comes against the backdrop of soaring inflation, a ban on Russian oil imports, and gas prices that have hit all-time highs in recent months.
According to AAA, the national average for a gallon of gas is $4.16, a major increase from the same time last year, when the average was $2.87. Democrats have called on oil companies to lower gas prices.
“The American people are understandably fed up with these prices, and we are here today to demand answers from Big Oil about when they will finally start providing the American people some relief,” Energy and Commerce Chairman Frank Pallone, D-N.J., said during the hearing. “As oil prices rise and Americans are hurting, the six oil companies testifying today made more than $75 billion in profits between them last year. It’s also likely these companies will make even more money this year. In fact, on Monday Exxon announced that its first-quarter profits may be more than $9 billion – that’s higher than last year’s first-quarter profits of $8.8 billion. And all these profits while Americans are getting taken for a ride at the gas pump.”
The Subcommittee on Oversight and Investigations of the Committee on Energy and Commerce held the joint hearing. That hearing included testimony from David Lawler, chairman, and president of BP America, Michael Wirth, chairman and CEO of Chevron Corporation, Richard Muncrief president and CEO of Devon Energy Corporation, Darren Woods, CEO of ExxonMobil Corporation, Scott Sheffield, CEO of Pioneer Natural Resources Company and Gretchen Watkins, president of Shell USA.
The oil executives said they are working to keep prices down by expanding supply, which costs money via investment, new technology, and taking financial risks. They also pointed to the role of government policies. The Biden administration has taken fire for limiting pipeline development and drilling permits.
“No single company sets the price of oil or gasoline,” Woods of ExxonMobil said. “The market establishes the price based on available supply and the demand for that supply. … Government plays a critical role in this. Policies that reflect the importance of energy, create certainty and improve predictability, encourage industry investment, and ensure affordable and reliable supplies of energy. Consistent, efficient, and effective permitting processes, whether for leases, drilling, or infrastructures such as pipelines, or export applications, will help spur further investment in U.S. oil and gas production.”
High gas prices have become a hot-button political issue as Americans struggle to keep up with rising prices at grocery stores and the gas pump, as well as a range of other goods and services that have become markedly more expensive in the past year. Federal inflation data show the fastest rising prices in nearly four decades.
To combat inflation, the Federal Reserve announced a series of interest rate hikes. Meanwhile, mortgage rates surpassed 5% as the number of Americans seeking to buy a home plummets.
All those factors contributed to the results of a recent NBC News poll, which asked respondents, “Do you think that your family’s income is … going up faster than the cost of living, staying about even with the cost of living, or falling behind the cost of living?”
In response, 62% of those surveyed said “falling behind,” but only 6% said their income is “going up faster” than the rising cost of living. To help combat these economic woes, Biden announced last week he would release 180 million barrels of oil per day for the next six months. Biden touted the relief measure, but critics called it too little too late.
“But this is under 10 days’ worth of daily US oil use,” said Joel Griffith, a policy expert at the Heritage Foundation. “Meanwhile, this administration’s ‘war on energy’ continues – by including shuttering pipelines, closing off swathes of the nation to drilling, and even threatening oil executives with prison for providing the gasoline American business and families depend on.”
Biden has deflected the blame for high prices, pointing to Russia’s invasion of Ukraine. At Wednesday’s hearing, U.S. Sen. Ted Cruz, R-Texas, rebuffed that point.
“The Biden administration has waged a war on supply, and prices have skyrocketed,” Cruz said. “This is not an accident. This is not Putin. This is Joe Biden, the Democrats, and the Green New Deal. And they are desperately looking for a political excuse to blame somebody else for the consequences of what they promised they would do to the American people.”