While There is Increased Pain at the Pump, There is Increased Pleasure in the Corporate Board Rooms of Shell and Exxon
by John Lawrence
Biden's ban on Russian oil is largely symbolic as it will do nothing to decrease the price of gas. On the other hand as gas prices soar, so will corporate profits. Booming prices for oil and natural gas propelled Shell’s profit in the fourth quarter of 2021, lifting its adjusted earnings to $6.39 billion, up from $393 million a year earlier. On the other hand consider the price of gas in Saudi Arabia - less than a dollar a gallon in Riyadh. Also less then a dollar a gallon in Kuwait. It's 38 cents a gallon in Lagos, Nigeria! The US produces as much oil as it consumes. So why are we at the mercy of oil and gas corporations? Why isn't Biden demanding that Shell and Exxon donate their excessive corporate profits to average Americans in order to keep the price of a gallon of gas at a reasonable level? Why are American consumers at the mercy of the global oil market?
Shell's profits were $20 billion in 2021. Shell is not even an American owned corporation. "High oil and gas prices boosted forecast-beating 2021 profits for Shell and BP, and are expected to continue doing so this year, allowing both U.K. energy giants to strengthen their balance sheets for energy-transition investments." Make sense? Increased profits will allow them to transition to greener energy. Such a rationale! These energy giants are using their excessive profits to buy back their own stock. This is enriching shareholders as well as CEOs whose pay packages are based on stock values. Everyone in the corporate board room is happy while American consumers are taking it on the chin among other places. The New York Times reported:
"Shell, Europe’s largest energy company, also said that it would accelerate returns to shareholders, buying back $8.5 billion in shares in the first half of 2022 — a big increase on the total of $3.5 billion set aside for buybacks in 2021.
"Shell also said it would increase the dividend it pays to shareholders by 4 percent, to 25 cents per share for the first quarter.
"In the short term, at least, Shell is carrying out a strategy of using the proceeds from oil and gas to reward shareholders as well as invest in new businesses like hydrogen."
So now is the ideal time for the government to give incentives to convert to electric cars. Biden needs to get those charging stations installed pronto and give everyone a generous subsidy to go electric. It's the right thing to do. All this talk about combating global warming is only so much poppycock as long as oil rules the world which it seems to do as Europe is so dependent on Russian oil. As long as that's the case, Putin is in the driver's seat. The last thing Europe will sanction is Russian oil. At the present time the oil market is driving the world. Oil corporations are enjoying record profits and pain at the pump is only filling corporate board rooms with glee.