Chevron CEO Michael Wirth is coming out swinging Wednesday in front of House Democrats who accuse oil company executives of price gouging.
“I want to be absolutely clear,” Mr. Wirth says in his prepared opening remarks. “We do not control the market price of crude oil or natural gas, nor of refined products like gasoline and diesel fuel, and we have no tolerance for price gouging.”
He’s one of six Big Oil executives ready to turn the tables on Democrats at a House Energy and Commerce Committee hearing, as first reported Tuesday by The Washington Times.
Mr. Wirth and executives from BP America, Devon Energy, ExxonMobil, Pioneer Natural Resources and Shell USA will say energy policies from President Biden and Democrats, as well as the Russia-Ukraine war, bear the responsibility for Americans’ pain at the pump.
“Fuel prices are impacted by factors that involve far more than one company or even one country,” Mr. Wirth says in the prepared remarks.
Likewise, Shell President Gretchen Watkins will tell the committee that they do “not set or control the price of crude oil” because it is a global commodity.
“Similarly, Shell does not set or control the price that consumers pay,” her prepared testimony says. “Indeed, it would be illegal for Shell to do so because nearly all Shell-branded retail stations in the United States are owned by independent operators who set their own prices in the marketplace.”
Ms. Watkins says the administration could take two immediate steps that it has so far been unwilling to over climate change concerns: issue permits for “otherwise ready” oil and natural gas projects on public lands and waters that would bring new supplies “online within weeks or months,” and end the Interior Department’s pause on federal drilling leases.
The oil companies’ executives blame the volatile global energy market for limiting supply. The situation was exacerbated, they say, by the Russia-Ukraine war and embargoes against Russian oil. It is in this environment, they say, that Mr. Biden needs to support the industry and cut red tape for drilling on federal lands.
While Democrats have called for companies to immediately ramp up production to blunt high prices that were already rising before the war in Ukraine, industry insiders have blamed the lack of support from the Biden administration and its clean energy agenda for stunting long-term investment and critical capital needed for new production.
As recently as a few months ago, Democrats and the administration were discouraging some of the same energy companies that are testifying Wednesday from pumping out more fossil fuels. In an October hearing before the House Oversight Committee, for example, Rep. Ro Khanna, California Democrat, urged ExxonMobil, BP, Shell and Chevron to reduce their production to meet future greenhouse gas emissions goals.
“Are you embarrassed, as an American company, that your production is going up while the European counterparts are going down?” Mr. Khanna asked Chevron’s Mr. Wirth at the time.
With record-high gas prices and the unlikeliness that they’ll significantly deflate for voters before the upcoming midterm elections, Democrats have used the price gouging accusation and Russian President Vladimir Putin’s war in Ukraine as off-ramps.
“We want to hold them accountable. I really believe that the oil companies are gouging, and they’re keeping prices artificially high,” House Energy Chairman Frank Pallone, New Jersey Democrat, said in an interview this week. “They’re using the Ukraine war as an excuse. It’s disgraceful, in my opinion, that they make these huge profits at the expense of the public.”
As evidence of price gouging, Democrats point to oil companies’ recent record profits and statements to investors that stock buybacks and shareholder returns would be prioritized over increasing production. They also highlight that the majority of energy firms said in a recent Dallas Federal Reserve Bank survey that the main reason for restraining growth was “investor pressure to maintain capital discipline” while less than 10% said it was due to “government regulations.”
Devon Energy President and CEO Rick Muncrief came under fire for saying during a February earnings call that it will be “relentlessly focused on delivering high returns with capital employed, margin expansion, accelerating free cash flow growth and returning excess cash to shareholders.”
In his prepared remarks, Mr. Muncrief answers Democrats’ criticism head-on. He’ll say that Devon has increased production despite supply chain issues and a shortage of workers, which have increased their time to get a drill up and running from about six weeks to six months.
“Like other sectors in the market, our shareholders expect us to operate in a way that delivers a return on capital invested while providing additional value in the form of cash returns,” Mr. Muncrief says in his prepared opening remarks.
• Ramsey Touchberry can be reached at rtouchberry@washingtontimes.com.
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