Five Things You Need To Know About Oil And Gas Profiteering

  1. After years of regulatory rollbacks, oil companies still chose to cut production. After years of getting their policy wishlists fulfilled by the Trump administration, oil companies were still underperforming the broader stock market and struggling with excessive debt even before the pandemic struck. Much of the industry had already started to cut production and lay off employees. When oil prices collapsed in 2020 because of COVID, the oil and gas industry both at home and around the world responded by further slashing production. More than 100,000 workers were laid off in the United States, despite nearly $120 billion in government support for the industry.

  3. High prices are bringing in record cash for Big Oil. 2021’s rebound in oil demand and now the recent spike in prices around the conflict in Ukraine has generated enormous cash flows to big oil companies. Exxon Mobil, Chevron, Shell, BP, and ConocoPhillips all saw their highest annual profits in at least 8 years, bringing in a total of $78.8 billion in 2021 across just these five companies.

  5. Oil companies are holding back production to generate cash for investors. Ordinarily, a rebound in prices would incentivize oil companies to invest in more production, but right now the industry is choosing to keep supply tight and prices high so they can send $88 billion back to shareholders through stock buybacks ($38bln) and dividends ($50bln).

  7. Public lands and leasing policies have nothing to do with current price spikes. Oil and gas companies are already sitting on a decade’s worth of unused leases and drilling permits. By the end of fiscal year 2021, the number of drilling permits issued by the Bureau of Land Management was 10 times the number of active drilling rigs that oil companies actually had in operation (5,000 permits vs 508 rigs). As of September 30, 2021, the oil and gas industry held 9,600 approved onshore permits that are ready to drill.

  9. We can never drill our way to real energy independence. Oil company CEOs are motivated by maximizing profits and generating cash for shareholders, not by what keeps prices down at home. Oil and gas are traded on global markets, and unlike clean energy sources, fossil fuels can easily be loaded onto a boat and shipped to the highest bidder. Because of this, we will never be free from oil and gas price fluctuations no matter how much oil we drill at home.


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