Big Oil under fire for ‘grotesque greed’ after record profits as people struggle with cost of living

·4-min read

Big Oil is coming under fire for its record-breaking profits at a time when regular people are buckling under the rising cost of living and the consequences of the climate crisis, from wildfires and dangerous heat to deadly flash floods.

On Wednesday, United Nations Secretary-General Antonio Guterres blasted the oil and gas industry for “grotesque greed” and called on governments to tax their profits.

“It is immoral for oil and gas companies to be making record profits from this energy crisis on the backs of the poorest people and communities and at a massive cost to the climate,” Mr Guterres said.

“This grotesque greed is punishing the poorest and most vulnerable people, while destroying our only common home,” he added.

Global gas prices have soared in the past year as oil prices have risen, especially after Russia’s invasion of Ukraine. As many countries sanctioned Russian oil, supplies dropped even further, which pushed prices higher.

US oil refineries are also processing less oil than before the pandemic, further restricting supply and raising prices.

The public has had to bear the brunt of those skyrocketing prices. In mid-June, gas hit a record $5.01 per gallon on average across the US, according to AAA. In addition to paying more for fuel, households are seeing higher prices for food as increased transportation and distribution costs filter down.

Meanwhile, oil companies have raked in billions of dollars in profits for their shareholders, earnings calls recealed in the past week.

ExxonMobil reported $17.6billion in profit this quarter, with Chevron at $11.4bn – both more than 200 per cent higher than this quarter last year. Shell reported $11.5bn in profits, and BP hit $8.5bn in profit.

The bumper boosts to profits haven’t gone unnoticed. In June, President Joe Biden remarked that ExxonMobil “made more money than God this year” during a speech in Los Angeles.

This week, Democratic Representative Frank Pallone, chairman of the House Energy and Commerce Committee, wrote a letter to oil executives demanding that they explain how they’re using these sky-high profit margins.

These are record-shattering figures for the companies and the result of them reaping enormous profits on the backs of hardworking families,” a statement from Mr Pallone’s office stated.

“The Committee is investigating what oil companies could and should be doing to help bring down gas prices,” his letter read.

Some Democrats have proposed a windfall tax on the industry. The bill would impose a tax on some big oil companies’ profits and send the proceeds to US taxpayers as a rebate. However it is unlikely to be passed in Congress.

On Twitter last week, Democratic Senator Sheldon Whitehouse, who introduced the Big Oil Windfall Profits Tax Act with Congressman Ro Khanna, called Exxon’s profits “highway robbery”.

The Democratic Senate candidate for Pennsylvania, Lieutenant Governor John Fetterman, noted the gap between rising oil industry profits and stagnant wage growth for workers.

“Did wages go up 200%?? I must have missed it,” Mr Fetterman tweeted.

Gas prices are now dropping, with the price per gallon reaching an average of $4.13 on Thursday, down nearly a full dollar from the June high.

But some environmental groups have attacked the long-term fallacy of relying on the fossil fuel industry, and slammed Big Oil’s profits. The production and combustion of fossil fuels is largely responsible for the planet-heating emissions driving the climate crisis to more intense cycles of fire, heat and extreme storms.

“As long as we depend on risky, volatile fossil fuels for our energy needs, we’ll always be vulnerable to price spikes and the whims of greedy fossil fuel executives,” Sierra Club’s Kelly Sheehan said in a statement.

Democrats seem to be on the cusp of passing the Inflation Reduction Act (IRA), which would invest heavily in both renewable energy - and fossil fuels - after a deal was reached between Senator Joe Manchin of West Virginia and Senate Majority Leader Chuck Schumer.

With an economy more reliant on renewables like solar and wind power, as well as electric vehicles and public transportation, Americans could be more insulated from the fluctuations in fossil fuel prices – leading to less of a challenge when gas prices rise.

Some green groups like the Center for Biological Diversity and Greenpeace have criticized the fossil fuel investments in the IRA bill. But others, like the Sierra Club and the National Resources Defense Council (NRDC), have noted their concerns with the fossil fuel spending, but urged Congress to pass the bill anyway.

The bill “provides strategic clean energy and justice investment to confront the climate crisis in a way that cuts energy costs for our families, makes our economy stronger and our country more secure,” NRDC’s Manish Bapna argued, via their statement.

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