President Joe Biden slammed oil companies for earning unprecedented profits in 2022 and accused them of doing too little with their high earnings to alleviate high energy prices.
Biden, during his State of the Union address Tuesday, repeated charges that oil majors invested too little to increase production after oil prices skyrocketed following Russia’s invasion of Ukraine. Prices remained above $100 per barrel for months before falling, which helped drive retail gasoline prices to a nominal record over the summer.
OIL MAJORS HAD A RECORD 2022. CAN THEY DO IT AGAIN?
ExxonMobil, Chevron, BP, and Shell all reported record earnings for the year. BP, the last of the four to post fourth quarter and year-end earnings on Tuesday, brought in $27.6 billion compared to its previous record of $26 billion set in 2008.
Exxon brought in $56 billion last year, Chevron’s earned $35.5 billion, and Shell reported $40 billion in profits for the year.
Biden called the numbers “outrageous.”
“They invested too little of that profit to increase domestic production and keep gas prices down,” Biden said. “Instead, they used those record profits to buy back their own stock, rewarding their CEOs and shareholders.”
Shell recently announced $4 billion share buyback. Other companies’ recent buyback programs, including Exxon’s, total in the tens of billions of dollars.
Energy companies have rebuffed Biden, making the case that the sector needs fewer regulatory restrictions and more in the way of positive “signals” from the government that its products will not be phased out quickly.
They’ve also pointed to increasing capital expenditures that drove production upward. Chevron, for example, announced record oil and gas production in 2022.
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Some Democratic lawmakers have pushed for a windfall profits tax to be levied on energy companies’ profits during periods of high oil prices, although proposals haven’t moved far in Congress.
