Profiting From Your Pain
Much blame has been heaped upon President Biden and Democrats for inflation, particularly high gasoline prices, by Republicans hoping to take control of Congress in the next election. Oil and gas companies have been running television ads blaming President Biden and Democrats for the exorbitant fuel prices by stating that their energy policies make it too difficult to explore for and produce oil and gas, the implication being that they would produce more oil if they could. The timing of the criticism makes perfect sense if you are in the oil and gas business. If your customers are hurting, blame someone else, but is it the truth?
Major oil and gas companies reported second quarter profits the last week in July. Bear in mind these are profits for just one quarter (3 months). Here are the results:
Exxon Mobil – $17.9 Billion (up from 4.7 Billion in the second quarter of 2022)
Chevron – $11.6 Billion (up from $3.1 Billion in the second quarter of 2021)
Phillips 66 – $3.2 Billion (compared with a loss of $296 Million in the second quarter of 2021)
It seems obvious that the oil and gas industry and refining industry are making a killing while deflecting blame for our pain upon President Biden, Democrats and Vladimir Putin.
Yes, I know that oil and gas are globally traded commodities and that the war in Ukraine and other geopolitical factors have combined to disrupt the balance between supply and demand, but I suspect the oil and gas companies like the situation just as it is.
It is also worth asking, what is it exactly that President Biden and Democrats are supposed to do about gas prices? President Biden can’t order domestic companies to produce more oil and he can’t nationalize these companies. Is he supposed to withdraw sanctions against Russia? Is he supposed to withdraw sanctions against Iran and Venezuela? He would be crucified for doing any of those things just as he was heavily criticized for talking to Saudia Arabia about producing more oil. President Biden probably feels like a piñata at a child’s birthday party.
There has been a there will continue to be talk in Congress about price gouging, profiteering, a windfall profits tax, etc., but nothing will happen and the oil and gas companies know it.
Capitalism may be a lot better than any other economic system, but it is foolish to believe these companies hold allegiance to anything other than profit.