This story originally appeared in Common Dreams on Dec. 6, 2021. It is shared here with permission.
While rising gasoline prices have adversely affected millions of working people in the U.S., the world’s biggest fossil fuel corporations have benefited immensely, raking in a combined $174 billion in profits during the first nine months of this year.
In the third quarter of 2021 alone, two dozen of the most profitable oil and gas companies—a group that includes Shell, BP, ExxonMobil, and Chevron—recorded $74.9 billion in net income, according to an analysis released Monday by the watchdog group Accountable.US.
Big Oil’s soaring profits come as “gasoline prices have hit a seven-year high in the U.S. due to the rising cost of oil, with Americans now paying about $3.40 for a gallon of fuel compared with around $2.10 a year ago,” The Guardian reported.
Warning that higher gasoline prices are detrimental to the pocketbooks of low-income households, the administration of President Joe Biden has on more than one occasion, including during COP26, urged the Organization of Petroleum Exporting Countries (OPEC) to ramp up production—an unsuccessful effort denounced by climate justice advocates, who say that such demands undermine calls to transition swiftly from fossil fuels to renewable energy.
Following a coronavirus-driven decline in drilling, fossil fuel corporations in the U.S. have also been reluctant to increase supply despite growing consumer demand, prompting the Biden administration last month to order the release of 50 million barrels from the national Strategic Petroleum Reserve in a bid to reduce costs at the pump.
Big Oil is “taking advantage of bloated prices, fleecing American families along the way,” Accountable.US says in its new report. “Rather than taking steps to lower prices, oil corporations are reveling in their massive profits and using that money for their real priorities: stock buybacks and lining shareholders’ pockets.”
“Americans looking for someone to blame for the pain they experience at the pump need look no further than the wealthy oil and gas company executives who choose to line their own pockets rather than lower gas prices,” Kyle Herrig, president of Accountable.US, said in a statement.
Most of the 24 fossil fuel corporations analyzed by the watchdog group shower their CEOs with annual compensation packages that surpass $10 million dollars, and 16 of them raised their dividend at least once in 2021.
Accountable.US found that 11 oil and gas companies gave a total of $36.5 billion in payouts to shareholders this year. In addition, a dozen bought back over $8 billion worth of stock, with plans to purchase even more in future quarters.
As The Guardian pointed out, “A glut of new oil drilling has made the U.S. awash with oil in recent years,” transforming the country into a major exporter of fossil fuels but keeping prices low, much to the chagrin of investors.
The unwillingness of oil and gas companies to boost production “has been driven by investor sentiment,” Helima Croft, head of global commodity strategy at RBC Capital Markets, told CNN last month. Wall Street, she said, doesn’t want producers “to spoil the party” by expanding supply.
Notably, the oil and gas companies that have been disregarding Biden’s pleas to increase production are part of the same industry that resisted his now-defunct moratorium on new fossil fuel leasing on public lands and waters.
“It’s not the government that is banning them from drilling more,” Pavel Molchanov, an analyst at Raymond James, told CNN last month. “It’s pressure from their shareholders.”
Progressives, meanwhile, have argued that Biden can and should pursue solutions to higher energy costs that don’t rely on increasing the extraction and burning of fossil fuels, which pollute the atmosphere with planet-heating emissions and deadly smog.
As political economist and Green New Deal proponent Robert Pollin explained in a recent interview, the federal government has the capacity to subsidize energy costs to guarantee affordable transportation and heating for all.
With energy prices expected to skyrocket this winter, Pollin argued that congressional lawmakers should make it a priority to keep expenses low for working families—not by strong-arming OPEC or Big Oil into boosting supply but by providing rebates that will help people “absorb the increased cost of energy.”