The rise in gas prices has corresponded with Russia's invasion of Ukraine, which prompted a surge in crude oil prices President Joe Biden has also banned imports of Russian-made oil to tighten the screws economically against Moscow for its bloody campaign. File Photo by Terry Schmitt/UPI | License Photo
April 6 (UPI) -- Democrats and Republicans squared off during a House committee hearing with some of the leading figures in the petroleum industry Wednesday, taking familiar sides during testimony that highlights the struggle to bring down high gasoline prices.
Democrats hammered oil executives over dividends to shareholders, stock buybacks and CEO pay while gas prices have hovered at record highs. Republicans defended the oil industry, charging it has been President Joe Biden's rush to green energy that has cut the legs from under the industry and currently prevents them from producing more oil and lowering prices.
"As oil prices rise and Americans are hurting, the six oil companies testifying today made more than $75 billion in profits between them last year," said House Energy and Commerce Chairman Frank Pallone, Jr., D-N.J., in his opening statement.
"In fact, on Monday Exxon announced that its first quarter profits may be more than $9 billion. That's higher than last year's first quarter profits of $8.8 billion. All these profits while Americans are getting taken for a ride at the gas pump."
Republican ranking member Cathy McMorris Rodgers, R-Wash., shot back calling the surging gasoline prices "President Biden's price hike."
"Today is purely political," Rodgers said in her opening statement. "President Biden needs cover for his war on American energy that has caused gas prices to skyrocket. First, the administration tried blaming Putin. They called it the 'Putin Price Hike.'
"But anyone who has been filling up their tank since last January knows this is not true. The average gas price when President Biden took office was $2.38 and it climbed over a dollar a gallon more well before the invasion."
Executives from some of the world's largest oil companies were called to the hearing before the House energy and commerce committee titled, "Gouged at the Gas Station: Big Oil and America's Pain at the Pump."
Speakers included BP America President David Lawler, Chevron CEO Michael Wirth, Devon Energy Corp. CEO Richard Muncrief, Exxon Mobil CEO Darren Woods, Pioneer Natural Resources CEO Scott Sheffield and Shell USA President Gretchen Watkins.
Lawler said BP was already moving swiftly to low carbon energy investment, saying it will soon put up to $6 billion into clean energy sources, representing about one-third of its total investments.
Wirth said Russia's invasion of Ukraine is an added challenge to the oil industry already strained by the coronavirus pandemic. He added that Chevron does not control the market prices for petroleum or national gas.
"We have no tolerance for price gouging," Wirth said. "We are pursuing the responsible development of oil and gas while investing to advance a lower carbon future."
The rhetoric over a lower carbon future did not sit well with Democrats who claimed the industries were not moving to those futures fast enough. Republicans, on the other hand, said actions of Democrats and Biden have made the United States much more dependent on foreign oil, including from Russia.
U.S. gas prices have been on the rise over the past several weeks, with the national average reaching a record high of $4.32 per gallon on March 8, according to AAA. Prices are highest in California, at an average of $5.82 per gallon, and are above $5 in two other states -- Hawaii ($5.23) and Nevada ($5.16).
A fueling station in Furnace Creek, Calif., posted what are believed to be the highest prices anywhere in the nation -- around $9 per gallon.
There are a number of factors that go into what determines the final cost of gasoline -- state taxes, proximity to refineries, national and global market fluctuations and supply and production conditions.
The rise in prices also has corresponded with Russia's invasion of Ukraine on Feb. 24, which prompted a surge in crude oil prices, with West Texas Intermediate -- the U.S. benchmark -- reaching as high as $123.70. President Joe Biden has also banned imports of Russian-made oil to tighten the screws economically against Moscow for its bloody campaign.
Nonetheless, there are concerns among lawmakers and consumers about possible gas price gouging -- a situation in which gas companies or station owners exploit a particular situation to hike prices at the pump beyond what the market says they should be. These concerns have been amplified by reports of record or near-record profits from the oil companies.
According to AAA on Wednesday, the national average gas price is $4.16 per gallon, which is down from $4.24 a week ago. Photo by John Angelillo/UPI
The executives largely agreed that increasing the oil supply represents an effective means to quell the rising gasoline costs, which Biden has tried to do by tapping into the U.S. strategic reserve. The president announced last week that he's ordered an extra 1 million barrels per day from the reserve for the next six months -- a move that amounts to the release of 180 million barrels.
AAA said Biden's move has had an impact on gas prices.
"[The release] helped send the global oil price tumbling to near $100 [per barrel]," it wrote Tuesday. "The national average for a gallon of gas has fallen to $4.18."
"The upward push on oil prices caused by Russia's war in Ukraine is meeting stronger downward pressure from the planned [reserve] oil release and increased COVID fears in China," added AAA spokesman Andrew Gross. "And lower global oil prices are reflected in falling pump prices for consumers in the U.S."
According to AAA on Wednesday, the national average fell further to $4.16 per gallon.