Big Oil Delivers a Master Class in War Profiteering

by | Apr 6, 2022 | Money and Politics, Wealth Gap

Gas prices posted at a gas station in Los Angeles on March 23, 2022. (AP Photo/Damian Dovarganes)

Big Oil Delivers a Master Class in War Profiteering

by | Apr 6, 2022 | Money and Politics, Wealth Gap

Gas prices posted at a gas station in Los Angeles on March 23, 2022. (AP Photo/Damian Dovarganes)
Two years after winning multi-billion dollar bailouts from the Trump administration, these newly flush companies are pocketing billions from an international crisis, and they don't care how it affects regular Americans.

An analysis released April 5th by a trio of groups highlights how Big Oil has cashed in on various crises over the past year—including the Covid-19 pandemic, Russia’s war on Ukraine, and the global climate emergency—while enriching wealthy shareholders.

“Big Oil is living the second half of their unspoken mantra ‘socialize losses, privatize gains.'”

The new report from BailoutWatch, Friends of the Earth, and Public Citizen explains that there are two main tactics that fossil fuel giants use to benefit investors: “First, they repurchase shares of their own stock and retire them, reducing the number of shares outstanding and driving up the value of each share remaining in investors’ hands.”

“Second, they increase dividends, the quarterly payments investors receive for owning shares,” the report continues. “Oil and gas dividends, historically bigger than other sectors’, have spiked in recent months, outstripping every other industry group.”

“Amid high gas prices and war in recent months, oil and gas companies have kicked both tactics into overdrive,” the groups found, based on reviewing public statements and securities filings from the 20 largest U.S.-headquartered fossil fuel corporations.

During the first two months of 2022, “seven companies’ boards authorized their corporate treasuries to buy back and retire $24.35 billion in stock—a 15% increase over all of the buybacks authorized in 2021,” the report states. “Six of those decisions came in February 2022, after Russian warmongering lifted stock prices. The total since the start of 2021 is $45.6 billion.”

The analysis also reveals that in January and February, 11 companies raised their dividends—”often extravagantly”—and notes that “nine were increases of more than 15% and four were increases of more than 40%.”

“Six companies have begun paying additional dividends on top of their routine quarterly payments, including by implementing new variable dividends based on company earnings—a way of directing windfall profits immediately into private hands without any possibility of investment, employee benefits, or other uses,” the document points out.

“So far in 2022, these companies have started paying out an initial $3 billion in special windfall dividends,” the report adds. “Four of these companies—Pioneer, Chesapeake, Conoco, and Coterra—announced variable dividends beginning August 2021, as prices began to rise.”

Chris Kuveke of BailoutWatch said in a statement that “Big Oil is living the second half of their unspoken mantra ‘socialize losses, privatize gains.'”

“Two years after winning multi-billion dollar bailouts from the Trump administration, these newly flush companies are pocketing billions from an international crisis, and they don’t care how it affects regular Americans,” Kuveke added.

As Public Citizen researcher Alan Zibel put it: “Big Oil executives are reaping windfall profits while accelerating the climate crisis and sticking consumers with the bill.”

Zibel also acknowledged efforts to blame President Joe Biden for rising prices, rather than industry profiteering.

“The oil industry and their allies on Capitol Hill falsely claim that the Biden administration’s acceptance of mainstream climate science is stifling investment in the domestic oil industry,” he said. “But the industry’s actions show that they are intently focused on funneling cash to their shareholders rather than lowering prices for consumers.”

According to Lukas Ross, climate and energy program manager at Friends of the Earth: “This is a master class in war profiteering. Oil and gas companies are feeding off humanitarian disaster and consumer suffering in order to reward Wall Street.”

“Oil companies drove us into a climate crisis and are now price gouging us to extinction,” he warned. “Congress and President Biden must take action by passing a windfall profits tax to rein in Big Oil’s cash grab.”

The new analysis follows the introduction of multiple bills targeting Big Oil’s windfall profits, including a proposal spearheaded by Senate Budget Committee Chair Bernie Sanders (I-Vt.) designed to crack down on such behavior in all sectors, not just the fossil fuel industry.

Sanders on Tuesday morning held a hearing to call out how corporate greed and profiteering are fueling inflation. During his opening remarks, the chair took aim at Big Oil specifically while listing some examples.

“Yesterday, at a time when gasoline in America is now at a near-record high at $4.17 a gallon, guess what?” Sanders said. “ExxonMobil reported that its profit from pumping oil and gas alone in the first quarter will likely hit a record high of $9.3 billion.”

“Meanwhile,” he added, “Big Oil CEOs are on track to spend $88 billion this year not to decrease supply constraints, not to address the climate crisis, but to buy back their own stock and hand out dividends to enrich their wealthy shareholders.”

The House Energy and Commerce Committee’s Subcommittee on Oversight and Investigations plans to hold a hearing Wednesday titled “Gouged at the Gas Station: Big Oil and America’s Pain at the Pump.” Top executives from BP America, Chevron, Devon Energy, ExxonMobil, Pioneer Natural Resources, and Shell USA are set to appear before the panel.

Republished with permission from Common Dreams, by Jessica Corbett

<a href="http://commondreams.org" target="_blank">Common Dreams</a>

Common Dreams

Common Dreams has been providing breaking news & views for the progressive community since 1997. They are independent, non-profit, advertising-free and 100% reader supported.

0 Comments

Submit a Comment

Your email address will not be published.

Related Articles

May 16 2022

The Testing Lab That Missed 96% of Covid Cases

State and local officials across Nevada signed agreements with Northshore Clinical Labs, a COVID testing laboratory run by men with local political connections. There...
May 15 2022

Wealth Won’t Protect the Rich from Climate Change

Although wildfires in California have historically peaked in the late summer and fall, Orange County Fire Authority Assistant Chief of Field Operations TJ McGovern told...
May 14 2022

The Facts Surrounding the U.S. Baby Formula Shortage

As Republican fear mongers like Elise Stefanik whip out conspiracy accusations and blame about the baby formula shortage, the real facts from a pediatrician are more...
May 13 2022

Rick Scott — Florida Man Gaslights Himself

Rick Scott has published an 11-point proposal to raise taxes on the poorest of Americans and set the stage to destroy Medicare and Social Security. But he now claims it...
May 12 2022

Watergate — A New History of the Abuse of White House Power

As the 50th anniversary of the Watergate break-in approaches, a recent book charts the transformation of the Nixon administration’s bungled burglary into a wake-up call...
May 11 2022

Baby Formula Has Become the Latest Supply Chain-Monopoly Battleground

Six states are seeing baby formula shortages of more than 50% and stores are limiting purchases to three or four per customer, with prices surging to $33 per can.
May 07 2022

Healthcare Profiteering: Medical Bills Force a Family to Get Care in Mexico

The Fierro family was trapped in a situation of being “functionally uninsured.” They have insurance, but their healthcare plan is expensive and they don’t have the...
May 06 2022

Fossil Fuel Democrats Join GOP Senators Trying to Prevent Biden From Declaring Climate Emergency

Though the Senate resolution is non-binding, it clearly shows the fear the fossil fuel industry has of impending actions to reverse the damage they are causing to our...
May 02 2022

Private Utility Companies Also Got Into the Pandemic Profiteering Act

A new report details how private utility companies shut off electricity to U.S. households more than 3.5 million times since the start of the Covid-19 pandemic, even...
May 01 2022

Pumped Up Inflation: Big Oil Profits Double and Quadruple Amid Ukraine Crisis Excuses

One of the major factors of the current “inflation” is Big Oil intentionally profiteering off the war in Ukraine. Pump prices remain sky high even though no...
Subscribe for Updates!

Subscribe for Updates!

Join our mailing list to receive the latest news and updates from our team.

You have Successfully Subscribed!

Pin It on Pinterest

Share This