Oil Executives Summoned by Democrats Over $4-a-Gallon Gasoline

Mar 18, 2022

(Bloomberg) Democrats in Congress are taking aim at big oil as they seek to deflect blame for eye-popping gasoline prices that could sink their prospects in the midterm elections.Both the Senate and the House are calling executives from the nation’s largest oil and gas companies to testify, saying the industry isn’t passing the benefits of record profits on to consumers at the pump.“I remain concerned that the oil industry is not doing enough to protect American consumers from rising gas prices,” Representative Raul Grijalva, chair of the House Natural Resources Committee, wrote to company executives in a letter sent Friday.The committee is requesting testimony from executives from EOG Resources Inc., Devon Energy Corp. and Occidental Petroleum Corp. for a planned April 5 hearing to “examine the fossil fuel industry’s failure to help stabilize American gasoline prices.”

The Senate Commerce Committee is planning a hearing, “The Corrosive Effect of Elevated Petroleum Prices on American Commerce and Consumers,” that will focus on pump prices, according to a letter seen by Bloomberg News and sent by Senator Maria Cantwell, the committee’s chair. Among the witnesses being sought is Exxon Mobil Corp. Chief Executive Officer Darren Woods, according to the letter.

The House Energy and Commerce Committee is also seeking the testimony of executives from BP Plc, Chevron Corp., Devon Energy., Exxon, Pioneer Natural Resources Co. and Shell Plc for a hearing planned April 6 on their company’s business practices and the industry’s impact on consumers.

“The industry appears to be taking advantage of the crisis for its own benefit,” Representative Frank Pallone, a New Jersey Democrat who chairs the committee, wrote in letters this week asking executives from the companies to testify.

West Texas Intermediate crude futures, the U.S. benchmark, have dropped from multiyear highs touched after Russia’s invasion of Ukraine but still remain over $100 a barrel, and the national average for unleaded regular gasoline was $4.27 a gallon Thursday, according to the automotive club AAA.

The near record-high price levels pose a significant issue for President Joe Biden and Democrats. A second planned release from the Strategic Petroleum Reserve this month announced by Biden has had a limited effect.

Industry Response

The oil industry’s top lobbying group, the American Petroleum Institute, said in a statement that the criticism from Democrats amounted to “political grandstanding.”

“The American people seek solutions from their elected leaders to help alleviate the pain they are feeling at the pump,” said Frank Macchiarola, API’s senior vice president of policy, economics and regulatory affairs. “Congress and the Biden administration should focus on policies that increase U.S. supply and encourage investment when it is needed most, rather than political grandstanding.”

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Asked about the plans by Democrats to hold hearings, House Minority Leader Kevin McCarthy responded Friday that Democratic policies are to blame for higher gasoline and energy prices.

“They’ve made their platform to put oil industry out of business in America and increase the business of Russia, Iran and Venezuela,” McCarthy said of Democrats during a news conference.

“They turn around and see the price is high. We have warned them about this time and again because of their policies,” he said. “Every action they’ve taken has put us in this place.”

Democratic lawmakers are underscoring the oil industry’s profits in demanding questions.

“There are certainly questions about the oil companies, how they are spending very substantial profits. Buying back stock. Big dividends,” said House Majority Leader Steny Hoyer.

Senate Majority Leader Chuck Schumer said he also plans to call oil and gas executives to testify “and explain why they see fit to reward shareholders instead of finding ways to give Americans a break at the pump.”

“It is nothing short of repugnant for oil companies to be touting what are truly dizzying profit margins, while soaking American families with these exorbitant prices,” Schumer said in a floor speech Thursday.