Following the announcement of significant profits due to an increase in energy prices brought on by Russia’s invasion of Ukraine, President Joe Biden threatened big oil companies with a windfall tax.
ExxonMobil, for instance, declared on October 28 that the third quarter of 2022 brought in $19.7 billion in profits. This is more than the fossil fuel firm has ever earned in a quarter and is 10% more than its previous high, which was only reached during the second quarter of 2022, according to a story at the time in The New York Times. Biden was unimpressed, accusing the businesses of exploiting the conflict to bolster their profits and urging them to instead fight to lower prices.
If they don’t, they’ll pay a greater tax on their surplus profits and be subject to other limitations, Bendel told reporters on Monday. To examine  these possibilities that are open to us and others, my team will work with Congress. It’s time for these businesses to stop making money off of war, fulfill their obligations to this nation, and offer the American people a break while still doing extremely well.
The president is attempting to channel resentment about high gas prices onto energy companies and away from the Democrats, who are trying to retain control of both the House and the Senate, with Biden’s comments, which came a little more than a week before the midterm elections next Tuesday. The New York Times reported that Biden’s own approval ratings decreased this summer as gas prices hit record highs and then increased as prices began to decline.
Additionally, surveys reveal that when petrol costs are lower, Americans are more likely to think their nation is moving in the right way. According to Biden, the average gas price is currently $3.76 a gallon, down from more than $5 throughout the summer.
But according to Biden, gas costs would decrease by an additional 50 cents if oil corporations maintained the profit margins they had built up over the previous 20 years and invested the extra cash in raising output.
According to Biden, the oil industry’s current record profits are not the result of any novel or inventive practices. Their wealth is the result of the bloody conflict that is destroying Ukraine and harming tens of millions of people all over the world.
Although Biden only specifically mentioned ExxonMobil, all of the big oil and gas firms have traditionally performed well following Russian President Vladimir Putin’s invasion of Ukraine.
The combined earnings of ExxonMobil, Chevron, Shell, BP, ConocoPhillips, and total energy in the second and third quarters of 2022 were more than two and a half times higher than those in the corresponding quarters of 2021 and more than $100 billion higher than their total 2021 earnings, according to The Guardian. The enormous gains also occur in the midst of a year marked by extraordinary weather phenomena, from spring and summer heat waves to autumn hurricanes.
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Biden’s Demand for A Windfall Tax on Fossil Fuel profits Was Greeted Favorably by Several Congressional Democrats.
Rep. Ro Khanna of California, who has filed legislation to tax fossil fuel windfalls and provide the money to consumers as a refund, said in a statement to Politico, “I’m delighted to see President Biden publicly embrace this strategy.” I’ve had several private discussions with White House representatives, and I hope they will take action to help cut gas prices and send money back to hardworking Americans.
Gavin Newsom, The Governor of California, Has Also Asked for Such a Tax.
Although the price of crude oil is down, Californian gas stations are already charging more despite this. According to The Guardian, Newsom stated on Friday that this doesn’t stack up. We won’t remain silent while rapacious energy firms rob Californians blind. I’m advocating a windfall tax in its place to make sure that extra oil earnings go back to the millions of Californians who are being taken advantage of.
Progressives, though, questioned Biden’s demand for industrial production to rise despite the climate catastrophe.
According to Public Citizen President Robert Weissman, increasing drilling won’t result in cheaper pricing for American consumers, as The New York Times noted. Our reliance on fossil fuels will increase with increased investment in oil drilling.
Naturally, The Oil and Gas sector Was Against the Idea.
According to American Petroleum Institute President Mike Sommers, the Biden administration should get serious about addressing the supply-and-demand imbalance that has led to higher gas prices and created long-term energy challenges rather than taking credit for price decreases and shifting blame for price increases.
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Though Congress is not presently in session, and Politico reported that Republicans are certain to gain a majority in at least one chamber next Tuesday, it is unlikely that Biden’s windfall tax would become law.
The oil and gas sector has argued against national climate regulations that would limit drilling and fossil fuel exploration by citing the energy crisis as evidence. Climate change activists, however, have argued that the sector is hoarding unused leases in order to keep costs high and that only a shift to renewable energy sources can eventually stabilize energy prices over the long run.