Lawmakers press oil CEOs on high gas prices

Democrats on a subcommittee of the House Energy and Commerce Committee grilled oil executives Wednesday over the disparities between oil and gas prices, while the committee’s Republican members framed high prices as a consequence of Biden administration energy policies. 

Oversight and Investigations Subcommittee Chair Diana DeGette (D-Colo.) confronted the witnesses, who included executives from BP, Chevron, ExxonMobil, Devon Energy and Shell and Pioneer Natural Resources, directly asking them “Why is there a disconnect between the falling price of crude oil and the fact that the cost of gas is staying the same?”

In response, BP Chairman and President David Lawler cited the complicating factors along the supply chain that he said may delay any drop in oil prices being reflected in gas prices.

Democrats on the panel repeatedly emphasized the record profits the oil industry reported in 2021. Energy and Commerce Committee Chair Frank Pallone Jr. (D-N.J.) asked each witness for their profits in the previous year as well as whether they would commit to “doing whatever it takes, including increase production and reducing dividends and buybacks, to help American consumers.” 

While the witnesses generally committed to increasing production, they were noncommittal or outright declined to say they would reduce buybacks. 

Rep. Paul Tonko (D-N.Y.) noted that domestic U.S. oil production has increased since President Biden took office by about 2 billion barrels a day, while Rep. Ann Kuster (D-N.H.) lambasted the executives for referring back to the financial hardships of 2020.

“One bad year does not excuse the practice of ripping off consumers,” she said.

The witnesses largely defended their business practices, denying under oath that they had artificially increased prices to profit from the Ukraine conflict when questioned by Rep. Morgan Griffith (R-Va.), the ranking member of the oversight and investigations subcommittee.

Pioneer CEO Scott Sheffield said the company’s production was constrained because “we can’t get people back” to work on oil extraction in the Permian Basin.  

Griffith repeatedly pressed the witnesses on whether the Biden administration’s budget request mentioning an end to fossil fuel subsidies discouraged production. The witnesses were largely noncommittal except for BP CEO Darren Woods, who said it could have had a “chilling effect.” 

Rep. Cathy McMorris Rodgers (R-Wash.), the Energy and Commerce ranking member, dismissed the hearing as “purely political.” She said gas prices were on the rise before the invasion of Ukraine and the spike was “not the result … of companies suddenly deciding to make money in 2022.” 

Although a confluence of factors contribute to gas prices, congressional Democrats have targeted the oil industry as the cause ahead of a fraught midterm election season.

Democratic lawmakers introduced a bill last week that would tax the industry’s windfall profits, and Rep. Katie Porter (D-Calif.), a member of the House Oversight Committee, said it would be “entirely appropriate” for that panel to question oil executives as well.