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Oil companies defend production and profits amid White House criticism

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WASHINGTON — As oil company executives testified before Congress on Wednesday to explain skyrocketing gas prices, the White House called on the industry to invest in immediate production.

“Now is not the time to sit on record profits,” the White House spokesman said. Jen Psaki said in a video message.

Gas prices, which were already on the rise, surged further after Russia’s invasion of Ukraine and the President’s subsequent decision to ban US imports of all Russian energy products to target “the artery mainstay of the Russian economy.

Democrats called the increase “Putin’s price hike” while refuting GOP accusations that the administration’s energy policies are stifling production.

Continued: Biden says the Ukraine crisis shows why the United States must become energy independent. Is it possible?

Continued: Biden announces ban on all Russian energy imports following invasion of Ukraine; experts expect a spike in gasoline prices

As PSAKI did again on Wednesday, the White House tried to highlight the more than 9,000 approved but unused permits for production on federal lands.

“It’s time they used them,” Psaki said. “It is time to intervene for the good of the country, to invest in the immediate production that we need to respond to Vladimir Putin, to relieve the customers, not the investors and the leaders.”

AT During a hearing before a House energy and commerce subcommittee, oil industry leaders said they were working to provide more energy to the world.

They also pointed out that they have little control over any market dynamics that affect prices.

“The price of oil, gasoline and other refined products is determined by international markets,” said David Lawler, chairman and president of BP America. “Energy markets are complex and global in nature.”

Action from the White House: Biden releases up to 180 million barrels of oil from reserve to drive down gas prices

High gas prices are a political headache for the administration ahead of the midterm elections.

Biden ordered the release of 1 million barrels of oil a day over the next six months from the Strategic Petroleum Reserve. The action will represent the reserve’s largest release in its nearly 50-year history.

Russia’s invasion has complicated Biden’s ambitious goal of reducing greenhouse gas levels to half of what they were in 2005.

Continued: Biden will release up to 180 million barrels of oil from his reserve to drive down gas prices

The United States imported nearly 700,000 barrels a day of crude oil and refined petroleum products from Russia last year, the White House said. Banning them would deprive Russia of billions of dollars in revenue from American drivers and consumers each year, but it also means that reduced supply drives prices up unless demand falls.

Oil company CEOs have told lawmakers they have no plans to halt dividend payments to shareholders or restrict stock buybacks despite efforts by Energy and Commerce Chairman Frank Pallone, DN.J., and other Democrats to get them to do it.

“The reality is that during this crisis (in Ukraine) you have made record profits and share buybacks and the American people want to know why they are paying such high prices at the pumps and giving your industry lavish tax breaks as your profits are passed on to shareholders,” Pallone said.

Prompted by Pallone, the executives laid out the billions in profits their companies made last year, but also pointed to the huge losses they suffered when the global pandemic drastically reduced transport.

At Wednesday’s hearing, Republicans accused the Biden administration of squeezing U.S. fossil fuel production by shutting down the Keystone XL pipeline, banning new drilling on federal lands and increasing permit processing times.

“What we’ve seen over the past few months is an energy crisis unfortunately of our own making,” said GOP Rep. John Joyce, whose Central District of Pennsylvania is rich in natural gas deposits. “The only way to ensure reliable and affordable energy for the American people is to use the resources under my constituents’ feet.”

Contributor: Ledyard King

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