A new analysis released Tuesday estimates that U.S. oil and gas corporations are poised to rake in windfall profits of up to $126 billion this year as they exploit Russia’s deadly assault on Ukraine to raise pricesAt the pump
The survey was conducted by Oil Change International, Greenpeace USA and Global Witness. analysisUses database that tracks the fossil fuel industry’s production economics to assess how much money the industry is set to make as a result of high global oil prices.
“Under conservative estimates, we find the U.S. upstream oil and gas industry will collect a windfall of $37 to $126 billion in 2022 alone,” the groups’ report states.
The higher-end profit estimate is dependent on oil prices spiking to $120 per barrel this summer and remaining elevated as the West moves to restrict Russian oil imports — a major opportunityParticularly for U.S.-based fossil fuel companies, especially as the Biden government looks to ramp up gas exportsEurope
According to the new analysis, if oil prices average $88 a barrel, the U.S. Oil and Gas industry would see $37 billion in additional profits by 2022.
According to the report, the industry giants ConocoPhillips and Chevron were the biggest beneficiaries of the windfall.
“It is unconscionable that U.S. upstream companies like Chevron, Occidental, and ExxonMobil, who receive federal tax subsidies totaling millions of dollars every year, are now set to make billions of dollars more from these high wartime gas prices,” Tim Donaghy, the research manager at Greenpeace USA, said in a statement Tuesday.
“American consumers don’t get a break from high prices just because we drill more here at home,” added Donaghy. “Instead, we get more air and water pollution and higher public health risks. The only way to achieve true energy independence is to cut our ties with fossil fuels entirely.”
Collin Rees (the U.S. program manger at Oil Change International) argued that the new findings support the case for a windfall profit tax of the type Congress Democrats advocate. introducedThis was earlier in the month.
“From lobbying against climate solutions to actively spreading misinformation, the oil and gas industry has spent decades doing everything in its power to deepen our dependence on dirty fossil fuels,” said Rees. “Now, Big Oil and Gas executives are rolling in cash while working families suffer.”
“It’s high time for Congress to pass a windfall profits tax and prevent the fossil fuel industry from harnessing a war to make billions,” Rees continued. “This can be a clear step toward a fossil-free future if paired with real investments in a renewable energy future.”
The Big Oil Windfall Profits TaxRep. Ro Khanna, a Democratic-Calif., and Sen. Sheldon Whitehouse in the Senate would both lead the effort to tax large fossil fuel companies with a quarterly fee equal to 50% of any difference between the current oil price per barrel and the average pre-pandemic price for oil between 2015 and 2019.
“At $120 per barrel of oil, the levy would raise approximately $45 billion per year,” according to a summary released by Khanna’s office. The bill would use new revenue to pay a quarterly rebate for consumers.
Recent survey by the League of Conservation Voters found that 80% of U.S. voters — including 73% of Republicans — would support “placing a windfall profits tax on the extra profits oil companies are making from the higher gasoline prices they are charging because of the Russia-Ukraine situation.”
Cassidy DiPaola is a spokesperson for Stop the Oil Profiteering campaign at Fossil Free Media, said Tuesday that “while Americans are struggling to keep up with high prices at the pump and on their utility bills, Big Oil is profiting off of the war in Ukraine, driving up gas prices and raking in record profits.”
“Fortunately, there’s a simple way to stop this profiteering: put a tax on the excess profits oil companies are making because of this crisis and use the money to send a check to the people who need it,” said DiPaola. “Making Big Oil pay for their greedy war profiteering is a win-win for our families and the climate.”
