Congratulations To Exxon On Their Massive Profits That Surely Have Nothing To Do With Price Hikes!
On Friday, ExxonMobil and Chevron, the two largest gas companies in the United States, announced massive profits for their first quarter earnings. This marks the second quarter in a row during which their profits grew while gas prices around the country surged and Republicans blamed it all on Joe Biden stopping the Keystone XL pipeline, not forcing Ukraine to stay out of NATO, and existing in general. Surely, gas company executives have been pleased about this, as they would never want anyone to think of them as just being greedy.
Exxon actually doubled its quarterly earnings from last year, earning $5.5 billion in the first three months of 2022 — counting the $3.4 billion it lost as a result of pulling out of Russia. Chevron's increased even more — from $1.37 billion during last year's first quarter to $6.3 billion this year. Meanwhile, gas prices for actual customers are still over $4 a gallon.
“The quarter illustrated the strength of our underlying business,” said Darren Woods, Exxon’s chief executive. “Earnings increased modestly, as strong margin improvement and underlying growth was offset by weather” and other factors, he added.
Exxon reported that its oil and gas production was 4 percent lower than in the previous three months because of bad weather, divestments and planned maintenance. Kathryn Mikells, Exxon’s chief financial officer, said the company was being cautious about the future given the steep drop in energy demand and oil prices during the pandemic.
“We are going to be a little bit more conservative in the short term,” she said, despite the “positive momentum” the company was enjoying.
Well good for them and their strong underlying business helping increase their earnings "modestly," also known as "double"! And we're sure that drop in production due to "planned maintenance" was nothing like Enron's "planned maintenance," because that would be rude.
Earlier last month, several major oil executives, including some from ExxonMobil and Chevron, were brought before the House Energy and Commerce Subcommittee on Oversight and Investigations to explain why they were charging customers up the wazoo for gas. Subcommittee Chair Diana DeGette (D-CO) asked, fairly, "If the price of gas is driven by the global market, why is the price of oil coming down but the price at the pump is still near record highs?"
Their response, naturally, was that the whole thing is out of their hands and they have nothing to do with it, which seems like it might not be true.
Chevron's Chief Executive Mike Wirth said fuel prices are set by market dynamics that companies have little control over.
"Changes in the price of crude oil do not always result in immediate changes at the pump," Wirth said, adding that "it frequently takes more time for competition among retail stations to bring prices back down at the pump." [...]
Gretchen Watkins, president of Shell USA, said her company neither controls nor owns the 13,000 gas stations that carry its brand. "Each of these independent businesses is responsible for setting the local retail price of gasoline."
Exxon, the top U.S. oil company, on Monday said first-quarter results could top a seven-year quarterly record. Other oil company earnings could also surge after Russia's invasion pushed up energy prices.
"No single company sets the price of oil or gasoline," said Darren Woods, chairman and CEO of Exxon. "The market establishes the price based on available supply, and the demand for that supply."
If that is the case, perhaps capitalism is just not a good fit for the oil industry. Perhaps this is not an industry that can be fairly regulated by "competition" and "supply and demand" and we should consider nationalizing, or "socializing" it, as Maxine Waters rightly suggested in 2008 during another congressional hearing about ridiculously high gas prices when a Shell Oil executive told her that they would keep raising prices until permitted to drill anywhere they want.
After all, fossil fuel companies are already getting very, very generous subsidies from US taxpayers — by conservative estimates, about $20 billion a year. So we are already paying these companies to exist, with our money, and they are then turning around and jacking up prices so they can take even more of our money at the pump and then blame it on a Democratic president so they can get a Republican one in there who will let them fuck the environment to their heart's content. That seems bad for all of us! And if these executives supposedly can't do anything to keep gas prices fair for consumers, then it is not clear what purpose they actually serve or why they are necessary. If they cannot manage their business without gouging American customers, then perhaps they don't need to have their business.
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Robyn Pennacchia is a brilliant, fabulously talented and visually stunning angel of a human being, who shrugged off what she is pretty sure would have been a Tony Award-winning career in musical theater in order to write about stuff on the internet. Follow her on Twitter at @RobynElyse