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Big Oil CEOs testify Thursday before the Senate Committee on Finance to defend the trillion dollars in profits they have made in the past decade thanks to you, the American consumer. Some in Congress will defend the billions of dollars in tax breaks and royalty relief taxpayers give to these same companies each year.
Public Citizen recently crunched the numbers and found that Big Oil's profits aren't the only eye-popping statistic - what the industry is spending its money on is equally astonishing. Big Oil lavishes more on stock buybacks, dividend payments, lobbying and marketing than on U.S. oil investments. Our research shows that since 2005, the largest five oil companies operating in the U.S. spent nearly half a trillion dollars buying back their own stock and paying dividends to shareholders. That's more money than they spent investing in their U.S. infrastructure.
This contradicts the industry's insistence that its billions of dollars a year in tax breaks are needed to create jobs and keep gas prices affordable. In fact, Big Oil's investment decisions are driven by market prices of crude oil, not U.S. tax policy.
It's time our leaders stop bowing to corporate interests and put an end to the "take the money and run" tactics of Big Oil that are nothing short of highway robbery.
While the speculation-fueled price of oil per barrel has continued to escalate, the underlying costs to produce oil haven't. Consider this: On average, it costs $20 to produce a barrel of oil. Big Oil sells it to us for more than $100. This generates the massive cash flow that fuels oil companies' profits and spending.
For more than a century, we have regulated the profits of corporate electric utilities because we decided long ago that suppliers of energy serve a unique public service and therefore require special regulatory treatment. Big Oil should be no different. High energy prices and our continued addiction to oil present significant economic and national security challenges.
Just imagine if the mountain of money Big Oil spent on stock buybacks, dividend payments, lobbying and marketing had been put toward installing millions of rooftop solar panels, deploying electric cars, investing in mass transit or helping those of us in financial need.
With oil prices high but the cost of drilling unchanged, Big Oil is imposing a tax on us at the gas pump. We must implement a windfall profits tax to divert the revenue from high gas prices from Big Oil's profiteering, spending it instead on investments in rooftop solar, energy efficiency, the electrification of our transportation sector and mass transit. We do not seek to punish oil companies, but we should not allow ourselves to be victimized by their windfall profits, especially when that revenue could be used to strengthen America's economic competitiveness, reduce consumer energy costs and help avert catastrophic climate change.
Lawmakers in Congress must remember who they are elected to represent, repeal Big Oil's subsidies, enact a windfall profits tax and challenge the Big Oil CEOs to make public their IRS income tax payments so we can settle once and for all whether Uncle Sam taxes Big Oil too much or too little.
Public Citizen is a nonprofit consumer advocacy organization that champions the public interest in the halls of power. We defend democracy, resist corporate power and work to ensure that government works for the people - not for big corporations. Founded in 1971, we now have 500,000 members and supporters throughout the country.(202) 588-1000
"Chevron should not be doing $75 billion in stock buybacks while price gouging American families and accelerating the climate crisis," said one critic.
Climate and consumer advocates reacted angrily Thursday to Chevron's announcement of a planned $75 billion stock buyback amid record profits and a worsening planetary emergency exacerbated by the continued extraction and burning of fossil fuels.
California-based Chevron said Wednesday it would start buying back shares on April 1, and that the new repurchase will be three times the size of the last one, which began in 2019. Bloombergnotes that the new buyback is equivalent to nearly a quarter of Chevron's market value.
"Companies like Chevron are doing absolutely massive stock buybacks after price gouging working families for over a year," tweeted Pennsylvania state Rep. Malcolm Kenyatta (D-181). "Then these same companies will come back hat-in-hand begging for more tax breaks and tax cuts."
Brian Vickers, a business administration professor at Northeastern State University in Oklahoma, tweeted, "I kept saying gas price increases were straight-up price gouging and not indicative of the price of oil, and here's all the proof I was right."
\u201cAfter decimating Indigenous groups in the Amazon and evading a $9.5 billion pollution judgement in Ecuador, @Chevron is now reporting a $75 billion buyback of its own stock. How the rich get richer while the poor die.\n\nThis company should lose its license to operate.\u201d— Steven Donziger (@Steven Donziger) 1674760480
The Biden administration—which despite a worsening climate emergency has been pressing oil companies to increase production to keep gas prices down—denounced Chevron's planned buyback.
"For a company that claimed not too long ago that it was 'working hard' to increase oil production, handing out $75 billion to executives and wealthy shareholders sure is an odd way to show it," White House spokesperson Abdullah Hasan said in response to news of the buyback.
Thursday's announcement came as Chevron, BP, ExxonMobil, Shell, and TotalEnergies are set to announce a record $199 billion in collective 2022 profits, 50% higher than the previous record set over a decade ago, according to Bloomberg.
\u201cNEWSFLASH: Chevron should not be doing *$75 BILLION* in stock buybacks while price gouging American families and accelerating the climate crisis.\u201d— Climate Power (@Climate Power) 1674755389
Chevron's $11.2 billion third-quarter profit last year was its second-highest on record and nearly double the $6.1 billion it reported during the same period in 2021.
Reacting to Chevron's impending buyback, biogeochemist and Earth sciences professor Gabriel Filippelli said "so much is wrong about this."
"Record profits for Chevron and the [Biden] administration is mad that they don't pump that into more drilling?" he asked. "They should pump it into more renewables and a real divestment strategy to stop producing their deadly product."
On Wednesday, U.S. Sens. Catherine Cortez Masto (D-Nev.) and Ben Ray Luján (D-N.M.) reintroduced the Fair and Transparent Gas Prices Act, which the lawmakers argue "would give the Federal Trade Commission the tools it needs to investigate unfair practices, provide market transparency, and prevent price gouging by Big Oil and gas companies."
\u201cBig Oil is making record profits, while Nevadans still have some of the highest gas prices in the country. I see it every time I fill up my tank.\n\nMy bill will investigate Big Oil for price gouging and work to stop any unfair practices hurting Nevadans.\nhttps://t.co/bT3Qv1m5kx\u201d— Senator Cortez Masto (@Senator Cortez Masto) 1674745500
Last March, Rep. Ro Khanna (D-Calif.) introduced legislation that would tax excess oil company profits and use the proceeds to pay American households a quarterly rebate. That same month in the Senate Bernie Sanders (I-Vt.) introduced the Ending Corporate Greed Act, which would impose a 95% tax on the windfall profits of major companies.
President Joe Biden has threatened to back a windfall profits tax on Big Oil unless companies ramp up production, but has not yet done so.
While the move comes after law enforcement in Georgia killed a "Cop City" protester, one official said it is a "purely precautionary" measure before the anticipated release of video footage from an arrest in Tennessee.
Republican Georgia Gov. Brian Kemp on Thursday signed an executive order declaring a state of emergency through at least February 9 that will enable him to deploy up to 1,000 National Guard troops "as necessary."
The order follows protests in Atlanta after 26-year-old forest defender Manuel "Tortuguita" Teran was shot dead last week during a multi-agency raid on an encampment to oppose construction of Cop City, a nearby law enforcement training center. The Georgia Bureau of Investigation (GBI), which is investigating the case, has said Teran was killed after he shot and wounded a state trooper.
While the order begins by stating that "protests turned violent in downtown Atlanta" last Saturday, The Atlanta Journal-Constitutionreported that Kemp's aides signaled that the move was not about the Cop City demonstrations but rather in anticipation of any potential response to video footage from Memphis, Tennessee showing the arrest of Black motorist Tyre Nichols.
\u201cGeorgia Gov. Brian Kemp is calling up to 1,000 National Guard troops & declaring a state of emergency until Feb 9, a week after police killed forest defender Tortuguita. 12 Cop City opponents were charged with domestic terrorism since. Tomorrow the Tyre Nichols video comes out.\u201d— Alleen Brown (@Alleen Brown) 1674766682
As Common Dreamsreported earlier Thursday, five fired Memphis cops were charged with second-degree murder and other crimes related to Nichols' death. Footage of the 29-year-old's arrest is expected to be released sometime after 6:00 pm local time on Friday.
"We understand the executive order is purely precautionary based on possible unrest following the release of the videos from Memphis," an official in Georgia with direct knowledge of the situation told the AJC. "There are no immediate intentions to deploy the guard."
The Atlanta Police Department also mentioned the Memphis case in a statement Thursday:
We are closely monitoring the events in Memphis and are prepared to support peaceful protests in our city. We understand and share in the outrage surrounding the death of Tyre Nichols. Police officers are expected to conduct themselves in a compassionate, competent, and constitutional manner and these officers failed Tyre, their communities, and their profession. We ask that demonstrations be safe and peaceful.
In a series of tweets Thursday, the Atlanta Community Press Collective named several people killed by law enforcement in recent years and suggested that Kemp's order is about "trying to instill fear in anyone who stands up against police brutality."
\u201cKemp's declaration of a State of Emergency isn't about property damage at Saturday's protests at all. It's about police murdering #TyreNichols and Tortuguita within two weeks of each other. They're trying to instill fear in anyone who stands up against police brutality.\u201d— Atlanta Community Press Collective (@Atlanta Community Press Collective) 1674764329
Meanwhile, national groups and progressive lawmakers have echoed local demands for an independent probe in Teran's case.
The Georgia Bureau of Investigation has highlighted that it is separate from the Georgia State Patrol and said that GBI "is conducting an independent investigation," after which it will "turn the investigative file over to the prosecutor." The agency noted Wednesday that DeKalb County District Attorney Sherry Boston has recused herself from the case so a special prosecutor will be assigned.
Some have pushed back against the "police narrative" that the "corporate media has ran away with" for Teran's case, as forest defender Kamau Franklin toldDemocracy Now! last week, adding that "we find it less than likely that the police version of events is what really happened."
"And that's why we're calling for an independent investigation, not one that's done by the Georgia Bureau of Investigation, not one that's done by any federal authority, but a complete independent investigation," Franklin said, "because that's the only way we're going to know what really happened."
"Military industrial production can be redirected to civilian technologies that contribute to societal well-being and provide green jobs," says the Costs of War project.
A pair of reports published Thursday show that many workers employed in the U.S. military-industrial complex support shifting manufacturing resources from military to civilian use—a conversion seen as vital to the fight against the climate emergency.
Moving "from a war economy to a green economy" can help avert the worst consequences of the climate crisis, noted the Costs of War project at Brown University’s Watson Institute, publisher of the new research.
"Ever-higher military spending is contributing to climate catastrophe, and U.S. lawmakers need a better understanding of alternative economic choices," Stephanie Savell, co-director of Costs of War, said in a statement. "Military industrial production can be redirected to civilian technologies that contribute to societal well-being and provide green jobs. This conversion can both decarbonize the economy and create prosperity in districts across the nation."
In one of the papers released Thursday, Miriam Pemberton, an associate fellow at the Institute for Policy Studies, described "how the United States developed a war economy," as reflected in its massive $858 billion military budget, which accounts for roughly half of all federal discretionary spending.
As Pemberton explained:
When the U.S. military budget decreased after the Cold War, military contractors initiated a strategy to protect their profits by more widely connecting jobs to military spending. They did this by spreading their subcontracting chains across the United States and creating an entrenched war economy. Perhaps the most infamous example: Lockheed Martin's F-35 fighter jet, which is built in 45 states.
The strategy proved successful. Today, many members of Congress have political incentives to continue to raise the military budget, in order to protect jobs in their districts. Much of the U.S. industrial base is invested in and focused on weapons production, and industry lobbyists won't let Congress forget it.
Not only is the Pentagon a major contributor to planet-heating pollution—emitting more greenhouse gases than 140 countries—and other forms of environmental destruction, but a 2019 Costs of War study showed that "dollar for dollar, military spending creates far fewer jobs than spending on other sectors like education, healthcare, and mass transit," Pemberton continued.
Moreover, "military spending creates jobs that bring wealth to some people and businesses, but do not alleviate poverty or result in widely-shared prosperity," Pemberton wrote. "In fact, of the 20 states with economies most dependent on military manufacturing, 14 experience poverty at similar or higher rates than the national average."
"A different way is possible," she stressed, pointing to a pair of military conversion case studies.
"The only way to really lower emissions of the military is you've got to make the military smaller."
As military budgets were shrinking in 1993, Lockheed was eager to expand its reach into non-military production.
"One of its teams working on fighter jets at a manufacturing facility in Binghamton, New York successfully shifted its specialized skills to produce a system for transit buses that cut fuel consumption, carbon emissions, maintenance costs, and noise, called 'HybriDrive,'" Pemberton explained.
By 1999, Lockheed "sold the facility producing HybriDrive buses and largely abandoned its efforts to convert away from dependence on military spending," she wrote. "But under the new management of BAE Systems, the hybrid buses and their new zero-emission models are now reducing emissions" in cities around the world.
According to Pemberton, "This conversion project succeeded where others have failed largely because its engineers took seriously the differences between military and civilian manufacturing and business practices, and adapted their production accordingly."
In another paper released Thursday, Karen Bell, a senior lecturer in sustainable development at the University of Glasgow, sought to foreground "the views of defense sector workers themselves," noting that they "have been largely absent, despite their importance for understanding the feasibility of conversion."
Bell surveyed 58 people currently and formerly employed in military-related jobs in the U.S. and the United Kingdom and found that "while some workers said that the defense sector is 'socially useful,' many were frustrated with their field and would welcome working in the green economy."
"This was a small group so we cannot generalize to defense workers overall," writes Bell. "However, even among this small cohort, some were interested in converting their work to civil production and would be interested in taking up 'green jobs.'"
One respondent told Bell: "Just greenwashing isn't going to do it. Just putting solar panels up isn't going to do it. So we're trying to stress that the only way to really lower emissions of the military is you've got to make the military smaller."
"By the way, do we really need to update all our ICBMs [Inter-Continental Ballistic Missiles]?" the survey participant asked. "Don't we have enough to blow up the world three times over, or five times over? Why don't we take those resources and use them someplace else where they really should be?"