A press release from Congresswoman Cindy Axne’s office:
Today, Rep. Cindy Axne (IA03) questioned why domestic oil producers aren’t producing nearly the amount of oil that they were before the COVID-19 pandemic and not taking advantage of millions of acres of federal lands they’ve already leased for drilling.
Before the COVID-19 pandemic, oil cost around $60 a barrel and domestic production was at about 13 million barrels a day. Despite higher oil prices for more than a year now, domestic oil production is down by 1.3 million barrels a day from 2020.
“About $65 to $70 a barrel is becoming profitable, and again, oil was trading at $90 a barrel… So pre-pandemic oil was around $60 a barrel and domestic production was about 13 million barrels a day. Since the pandemic, though, production is down 10 percent. So that’s about 1.3 million barrels a day,” Rep. Axne said to Rakeen Mabud, chief economist and managing director of Policy, Groundwork Collaborative. “Now, I understand companies can’t turn this on overnight, but oil has been over $60 for a year now. Dr. Mabud, do you have any explanation for why production is still so far below where it was?”
“The fossil fuel industry is not immune to the type of profiteering that I spoke about in my testimony. And this moment when things are in flux – when there’s a lot of geopolitical factors happening – is an opportunity to exploit those headlines and chaos and use their grip on the market to raise prices,” Dr. Mabud said. “You know, in fact, just five oil and gas companies raked in over $75 billion in profits last year, which was the highest increase in profits in seven years. The only thing more lucrative than pandemic profiteering is war profiteering, and sadly we are probably now going to be seeing both. Major oil companies including household names like Exxon Mobil, Shell, Chevron are set to return record buybacks to their shareholders in 2022.”
You can watch the conversation HERE.
During the hearing, Rep. Axne shared several quotes from oil CEOs within the last month that indicate they are not going to change their growth plans no matter how much prices rise, despite record cash flow. That included CEOs saying “whether it’s $150 oil, $200 oil…we’re not going to change our growth plans” and “we have to do what Wall Street wants…or else your stock craters.”
“This is my big concern – that Americans, working Americans, are suffering as more money is being put in shareholder pockets. Those calls for more oil production shouldn’t be coming to Washington – they absolutely need to be going to Wall Street,” Rep. Axne said. “Because that’s who is really demanding that oil companies not increase production.”