Commodities
Subterms
Latest story
More stories
- in US Politics
Biden implores US oil companies to pass on record profits to consumers
Biden implores US oil companies to pass on record profits to consumersPresident announces release of 15m barrels of oil from strategic reserve as he fights to keep gas prices in check before midterms Joe Biden has called on oil companies to pass on their massive profits to consumers as he announced the release of 15m barrels of oil from the US strategic petroleum reserve.Biden is fighting to keep gas prices in check ahead of November’s midterms. He blamed Vladimir Putin’s invasion of Ukraine for the global spike in oil prices and said his administration was doing all it could to keep prices in check.“Gas prices have fallen every day in the last week,” said Biden. “That’s progress, but they’re not falling fast enough. Gas prices are felt in almost every family in this country. That’s why I’ve been doing everything in my power to reduce gas prices.”He called on US oil companies to help. In the second quarter of 2022, the six largest US oil companies reported profits of $70bn, said Biden.“So far, American oil companies are using that windfall to buy back their own stock, passing that money on to shareholders, not consumers,” he said. “My message to all companies is this: you’re sitting on record profits. And we’re giving you more certainty. You can act now to increase oil production. You should not be using your profits to buy back stock or for dividends – not while the war is raging.”The announcement of the latest oil release speeds up the sale of the last of the 180m barrels that Biden announced in March would be sold. The announcement comes after the oil-producing Opec+ nations said they would cut oil production, driving up prices, in a move that angered White House officials.Established in 1975 to help mitigate shocks in US oil supply, the strategic petroleum reserve (SPR) is thought to be the largest emergency supply in the world. Stored in underground tanks in Louisiana and Texas, the SPR has capacity for 714m barrels of oil and is currently at its lowest level since 1984.The reserve now contains roughly 400m barrels of oil and Biden said more oil could be released if the situation does not improve. The administration has called the situation a “bridge” until domestic production can be increased and said the US will restock the strategic reserve when oil prices are at or lower than $67 to $72 a barrel.Biden faces political headwinds because of gas prices. AAA reports that gas is averaging $3.87 a gallon, down slightly over the past week, but up from a month ago. The recent increase in prices stalled the momentum that the president and his fellow Democrats had been seeing in the polls ahead of the November elections.An analysis Monday by ClearView Energy Partners, an independent energy research firm in Washington, suggested that two states that could decide control of the evenly split Senate, Nevada and Pennsylvania, are sensitive to energy prices. The analysis noted that gas prices over the past month rose above the national average in 18 states, which are home to 29 potentially “at risk” House seats.The hard math for Biden is that oil production has yet to return to its pre-pandemic level of roughly 13m barrels a day. It’s about a million barrels a day shy of that level. The 15m-barrel release would not cover even one full day’s use of oil in the US, according to the Energy Information Administration.The oil industry would like the administration to open up more federal lands for drilling, approve pipeline construction and reverse its recent changes to raise corporate taxes. The administration counters that the oil industry is sitting on thousands of unused federal leases and says new permits would take years to produce oil with no impact on current gas prices.Environmental groups, meanwhile, have asked Biden to keep a campaign promise to block new drilling on federal lands.Because fossil fuels lead to carbon emissions, Biden has sought to move away from them entirely with a commitment to zero emissions by 2050. When discussing that commitment nearly a year ago after the G20 leading rich and developing nations met in Rome, the president said he still wanted to also lower gas prices because at “$3.35 a gallon, it has a profound impact on working-class families just to get back and forth to work”.The Associated Press contributed to this storyTopicsJoe BidenBiden administrationOilOpecCommoditiesUS midterm elections 2022US politicsnewsReuse this content More
- in US Politics
Environmentalists condemn Biden administration’s offshore drilling plan
Environmentalists condemn Biden administration’s offshore drilling planPolicy would ban new ocean drilling but allow up to 11 lease sales in Gulf of Mexico and Alaska’s south coast Joe Biden’s administration on Friday unveiled a five-year offshore oil and gas drilling development plan that blocks all new drilling in the Atlantic and Pacific Oceans within US territorial waters while allowing some lease sales in the Gulf of Mexico and Alaska’s south coast.The plan, which has not been finalized, could allow up to 11 lease sales but gives the interior department the right to make none. It comes two days after the US supreme court curbed the power of the Environmental Protection Agency to respond to the climate crisis.Environmental groups criticized the plan, and some expressed concern that the administration was backing away from the president’s “no more drilling” pledge during a March 2020 one-on-one debate with Bernie Sanders.Biden at the time said, “No more drilling on federal lands, no more drilling, including offshore – no ability for the oil industry to continue to drill – period.”Environmental groups also argued that new leasing would impede the Biden administration’s goal to cut carbon emissions by at least 50% by 2030 in an effort to keep global heating under the threshold of 1.5C (2.7F).“President Biden campaigned on climate leadership, but he seems poised to let us down at the worst possible moment,” said Brady Bradshaw, senior oceans campaigner at the Center for Biological Diversity. “The reckless approval of yet more offshore drilling would mean more oil spills, more dead wildlife and more polluted communities. We need a five-year plan with no new leases.”Wenonah Hauter of Food & Water Watch said: “President Biden has called the climate crisis the existential threat of our time, but the administration continues to pursue policies that will only make it worse.”On Friday, the interior secretary, Deb Haaland, said she and the president “had made clear our commitment to transition to a clean energy economy”. The department’s proposal, she said, was “an opportunity for the American people to consider and provide input on the future of offshore oil and gas leasing”.California passes first sweeping US law to reduce single-use plasticRead moreThe proposal to sell off 11 leases must go through a series of reviews and a period of public comment that is likely to be contentious. Most of the new leases would be offered in parts of the western and central Gulf of Mexico, far from where legislators have outlawed new drilling near Florida.The executive director of Healthy Gulf, Cyn Sarthou, said the organization was troubled by the apparent change of policy.“Now is not the time to continue business as usual,” Sarthou said. “The continuing threat posed by climate change requires the nation to focus on a transition to renewable energy.”Nearly 95% of US offshore oil production and 71% of offshore natural gas production occurs in the Gulf of Mexico, according to the Natural Resources Defense Council. About 15% of oil production comes from offshore drilling.The proposed leases come after sales in two regions of the Gulf were abandoned because of legal challenges.Advocates for the oil industry welcomed the new proposal, including the Democratic senator Joe Manchin of West Virginia.“Our allies across the free world are in desperate need of American oil and gas,” Manchin said in a statement. “I am disappointed to see that ‘zero’ lease sales is even an option on the table.”One of the proposed new leases could be granted in Alaska’s Cook Inlet, an area that is already highly vulnerable to the effects of climate breakdown. “This decision is incredibly disappointing in the face of ongoing climate impacts that are already being deeply felt by our community around Alaska,” said the advocacy director at Cook Inletkeeper, Liz Mering.Mering added: “Alaskans have worked to ensure that Lower Cook Inlet remains this incredible place for our fisheries and tourism industry, which support a thriving local economy. Thirty-three years after the horrific Exxon Valdez disaster, Alaskans still remember and recognize the risk of more oil fouling our waters, killing our fish and hurting Alaskans.”The proposal came a day after the administration held its first auction of onshore lease sales, drawing bids of $22m from energy companies seeking drilling rights on about 110 square miles of public land across Colorado, Montana, Nevada, New Mexico, North Dakota, Oklahoma, Utah and Wyoming.After the sale, the Western Environmental Law Center attorney Melissa Hornbein said: “Overwhelming scientific evidence shows us that burning fossil fuels from existing leases on federal lands is incompatible with a livable climate.”TopicsBiden administrationJoe BidenOilGasUS politicsCommoditiesClimate crisisnewsReuse this content More
- in US Politics
The Guardian view on Biden’s risky gamble: betting on lowering oil prices | Editorial
The Guardian view on Biden’s risky gamble: betting on lowering oil pricesEditorialThe climate agenda risks being derailed by energy market disruptions caused by Russia’s war in Ukraine Joe Biden’s trip to Saudi Arabia this month highlights the paradox of American power. The US has the economic heft to punish an opponent – but not enough to alter the behaviour of a determined adversary. Sanctions will see Russia’s economy contract by 9% next year. But Washington needs more nations to join its camp to halt Moscow’s brutal invasion of Ukraine. Mr Biden has been forced to prioritise war objectives over ethics in meeting Crown Prince Mohammed bin Salman, who the CIA says ordered the barbaric murder of the prominent journalist Jamal Khashoggi.The havoc that Russia’s war has caused on the world’s energy markets is contributing to an economic crisis that is playing into the hands of Mr Biden’s domestic opponents. This highlights the west’s failure to confront the climate emergency with a less carbon-intensive economic model. The green agenda risks being derailed by sky-high hydrocarbon prices. This scenario could have been averted if western nations had accelerated their net zero agendas by driving down energy demand – the lack of UK home insulation is one glaring failure – and spending on renewables to achieve energy security. Instead, this week the G7 watered down pledges to halt fossil fuel investment over fears of winter energy shortages as Moscow squeezes supplies.Boycotts and bans against Russia, even as they take a toll on the global economy, will cause ordinary Russians hardship. But this has not moved Vladimir Putin. Soaring crude prices fuel Moscow’s war machine. A price cap on Russia’s petroleum exports might choke off the cash. But a concern is that China and India will buy Mr Putin’s oil at a price that still lets the Kremlin profit. Clever technical solutions mask hard choices. Sanctions drive up energy prices for consumers unless there are alternative supplies available. Right now, to bring down oil prices means producing more planet-destroying energy. That requires US engagement with Saudi Arabia and the United Arab Emirates, both of which bear responsibility for the disastrous Yemen war. Washington might have to woo Venezuela and Iran, nations which will play Moscow off against the west.The US is pursuing a three-pronged strategy: increasing pressure on Russia; getting more oil into markets to bring prices down; and allowing central banks to raise interest rates to levels that look as if they might cause a recession. The latter is designed to signal to oil producers that energy prices will collapse. The painful recessions of the 1970s and early 1980s played a part in bringing down oil prices after energy shocks – and contributed to the Soviet Union’s disintegration. But this took 15 years. Mr Putin’s Russia may not be as powerful as its forerunner. It might be more brittle than the Soviet Union. But there are few signs of imminent collapse.As the west seeks to reduce its reliance on Russian hydrocarbons, there seems to be a global “gold rush” for new fossil fuel projects defended as temporary supply measures. The risk, with the US as the largest hydrocarbon producer, is that the world becomes locked into an irreversible climate catastrophe. Europe might become as reliant on US gas as it once was on Russian gas. Donald Trump proved America could be an unreliable ally. Rightwing supreme court justices have hobbled Mr Biden’s power to limit harmful emissions. Meanwhile, China has emerged as a world leader in renewable energy as well as the metals on which it depends. Mr Biden had wanted to transition the US away from oil. Yet during his time in office the sector’s market value has doubled because prices have risen. Jarringly, as the climate emergency grows ever more urgent, fossil fuel appears the pivot on which the war in Ukraine will turn.TopicsUkraineOpinionClimate crisisJoe BidenUS politicsSaudi ArabiaMohammed bin SalmanOileditorialsReuse this content More
- in US Politics
Biden’s ‘cursed presidency’: gas prices are latest headache as midterms loom
Biden’s ‘cursed presidency’: gas prices are latest headache as midterms loomIn his 14 months in office, the US president has grappled with Covid, inflation, the Russia-Ukraine war and energy prices – and seemingly can’t catch a break The left are urging a green energy revolution. The right are sounding a battle cry of “Drill, baby, drill”. And American voters, tired of political excuses, are feeling angry.Will Biden’s handling of the Ukraine crisis prove popular with US voters?Read moreRising gas prices pose a fresh election year headache for Joe Biden. Republicans accuse him of pushing “a radical anti-US energy agenda”. Democrats put the blame on greedy oil companies and the assault on Ukraine by the Russian leader, Vladimir Putin.While some argue that crisis offers opportunity, consumers are feeling the pinch in the latest knotty problem for a US president who, after 14 months in office, seemingly cannot catch a break.“Biden has a cursed presidency,” observed Larry Jacobs, director of the Center for the Study of Politics and Governance at the University of Minnesota. “He’s gotten nailed by the continuation of Covid, by inflation being out of control, by a lunatic leader in Russia and now soaring energy prices that are hitting voters in the pocketbook. They want to be able to get gas for their cars and not spend a hundred bucks.”Prices at the pump, which hit a record high of $4.43 a gallon on average last weekend, were rising long before Russia invaded Ukraine as demand recovered from coronavirus lockdowns. But in announcing a ban on US imports of Russian oil, Biden sought to reframe it as “Putin’s price hike”.Republicans, however, saw a political cudgel with which to beat him. They argue that Biden campaigned on a promise to “wage war” on domestic energy production, signed an executive order to eliminate fossil fuel subsidies and suspended or halted oil and gas leases on federal lands.Mitch McConnell, the Senate minority leader, tweeted: “Nobody buys Democrats’ efforts to blame 14 months of failed policies on three weeks of crisis in Europe. Inflation and gas prices were skyrocketing and hurting families long before late last month. The White House needs to stop trying to deny their mistakes and start fixing them.”Republicans have also condemned the White House for reportedly considering deals with autocratic regimes for a back-up oil supply, undermining Biden’s moral authority at a critical moment on the world stage. Former president Donald Trump told supporters at a rally in South Carolina: “Now Biden is crawling around the globe on his knees begging and pleading for mercy from Saudi Arabia, Iran and Venezuela.”Their solution? Vastly increase domestic oil and gas production to end reliance on foreign countries. Introducing legislation to that end, Senator Josh Hawley of Missouri said: “To be strong and free as a nation, we must be energy independent. My bill will reverse Joe Biden’s disastrous energy surrender that has allowed Russian energy dominance and instead open up American production full-throttle.”But critics say that, while “energy independence” appears a resonant campaign slogan, it is based on false premise. The price of oil is set on the global market, not by domestic producers. The US exported more petroleum than it imported in 2021, according to the Energy Information Administration, while also increasing overall crude oil production.Nikos Tsafos, an energy and geopolitics expert at the Center for Strategic and International Studies thinktank in Washington, said: “We are energy independent by the definition that people use. We are a net exporter of energy and it doesn’t do anything to protect us, which is not a surprise to anyone who has ever thought about energy markets.”There is a different potential culprit. Consumer gas prices usually move in tandem with oil prices but this week, when oil prices fell below $100 a barrel as China’s Covid-19 outbreak threatened demand, there was little relief for at the pump. Democrats accuse giant oil corporations, already raking in billions of dollars, of profiteering.Biden wrote in a tweet: “Oil prices are decreasing, gas prices should too. Last time oil was $96 a barrel, gas was $3.62 a gallon. Now it’s $4.31. Oil and gas companies shouldn’t pad their profits at the expense of hardworking Americans.”Chuck Schumer, the Senate majority leader, and Frank Pallone, chair of the House of Representatives’ energy and commerce committee, requested that oil company chief executives testify before Congress on 6 April. Schumer said on the Senate floor: “The bewildering incongruity between falling oil prices and rising gas prices smacks of price gouging.”In an interview with the Guardian, Ed Markey, a Democratic senator for Massachusetts, pointed out that oil companies already have all the land they need to heed Republicans’ plea to “drill, baby, drill” – but will not do it because it is contrary to their business model.“Chevron, Exxon, BP, Shell – they made a combined $75bn in net profits last year and, despite all their crocodile tears right now about this crisis, they’ve already announced that they’re going to return $38bn to their shareholders instead of taking the $38bn and beginning to drill on the 12,000 leases that they have on federal land in the United States for oil and gas,” Markey said.“The reason they’re not going to do it is that they are hypocrites, they are liars. They don’t want to drill because if we produce more oil, that would lower prices for consumers. So it’s all one big lie.”Markey, who helped devise the Green New Deal platform to wean America off fossil fuels at home or abroad, welcomed Biden’s move to tap into the US Strategic Petroleum Reserve, which contains 600m barrels. But he added: “In the long term, we need a technology revolution. If we do it, we’re going to be looking at all these companies and countries in a rear-view mirror historically.“We need to go to ‘plug in, baby, plug in’. We need wind, solar, battery storage technologies, all-electric vehicles, all the other innovation technologies that reduce greenhouse gases, but also back out the need for oil and gas in our economy, the European economy, the economy of Japan and all of our allies.”Does Biden, juggling so many crises, still get that?Markey replied: “I was part of a meeting with the president last Wednesday night and he once again made a commitment to his effort to achieve that energy technology revolution in our country.”There is also grassroots pressure on Biden. More than 200 environmental and indigenous organizations signed a letter demanding that he use the Defense Production Act, normally deployed by presidents in wartime to force companies to make weapons, to compel businesses to produce solar panels, wind turbines and other clean energy sources.John Paul Mejia, national spokesperson for the Sunrise Movement, a youth movement to stop climate change, said: “The playbook of fossil fuel executives is clearer now than ever. They have used the crisis of war to surge prices at the expense of working people and the takeaway from this is that it is incredibly dangerous and anti-democratic to have an economy dependent on fossil fuels.“We need Biden to use the Defence Production Act to take decisive measures on the urgency, scope and scale of this crisis and transition to clean, renewable, reliable energy.”Biden has given little hint of such a move as he relies on Congress to take action. But his signature Build Back Better plan, which would have poured about $550bn into the clean energy and climate business, appears to be going nowhere fast. One of the chief obstacles is the Democratic senator Joe Manchin of West Virginia, who recently told an energy conference that he was “very reluctant” to see the development of electric vehicles. A key vote in the evenly divided chamber, Manchin has taken more money in political donations from fossil fuel interests than any other senator.Mejia added: “One of the things to view that’s specific to the United States right now is that the crook executives in the fossil fuel industry have a strong hold over American politics in the sense that they have incredibly powerful politicians bought out like Joe Manchin.“At this moment what we’re seeing, especially ahead of elections too, are the so-called conservative Democrats suddenly overnight flipping and pretending to be working-class champions as they morph themselves into caring about what working people are feeling at the gas pump right now. But they’re really just fulfilling their allegiances to their big oil donors.”Opinion polls suggest Biden’s handling of the war in Ukraine has broad public approval but, with hints of a fresh coronavirus wave, his list of problems never seems to shorten. Whatever the causes of inflation, history suggests that voters may punish him at the ballot box.The president’s legislative ambitions for the climate crisis and other priorities are about to collide with midterm elections in which all signs point to Republicans winning the House and possibly the Senate. Biden could find himself spending the second half of his presidency vetoing laws rather than signing them.Jamal Raad, co-founder and executive director of the campaign group Evergreen Action, said: “If there was ever a moment of need for moving to a 100% clean energy economy was more clear that now, I don’t know when would be with a fossil fueled enabled leader attacking another country and throwing the whole fossil fuel global market into chaos. I do believe this is a make-or-break moment.”TopicsJoe BidenUS politicsOilUS foreign policyCommoditiesfeaturesReuse this content More
- in US Politics
Big oil could bring US gas prices down but won’t – so hit it with a windfall tax | Robert Reich
Big oil could bring US gas prices down but won’t – so hit it with a windfall taxRobert ReichIn the US, in times of crisis, the poor pay the price and the rich cash in. Democrats know it doesn’t have to be this way This morning I filled my car with gas, costing almost six dollars a gallon. My car is a Mini Cooper I bought years ago, partly because it wasn’t a gas-guzzler. Now it’s guzzling dollars.Putin and Trump have convinced me: I was wrong about the 21st century | Robert ReichRead moreWhen I consider what’s happening in Ukraine, I say what the hell. It’s a small sacrifice.Yet guess who’s making no sacrifice at all – in fact, who’s reaping a giant windfall from this crisis?Big oil has hit a gusher. Even before Vladimir Putin’s war, oil prices had begun to rise due to the recovery in global demand and tight inventories.Last year, when Americans were already struggling to pay their heating bills and fill up their gas tanks, the biggest oil companies (Shell, Chevron, BP, and Exxon) posted profits totaling $75bn. This year, courtesy of Putin, big oil is on the way to a far bigger bonanza.How are the oil companies using this windfall? I can assure you they’re not investing in renewables. They’re not even increasing oil production.As Chevron’s top executive, Mike Wirth, said in September, “We could afford to invest more” but “the equity market is not sending a signal that says they think we ought to be doing that.”Translated: Wall Street says the way to maximize profits is to limit supply and push up prices instead.So they’re buying back their own stock in order to give their stock prices even more of a boost. Last year they spent $38bn on stock buybacks – their biggest buyback spending spree since 2008. This year, thanks largely to Putin, the oil giants are planning to buy back at least $22bn more.Make no mistake. This is a direct redistribution from consumers who are paying through the nose at the gas pump to big oil’s investors and top executives (whose compensation packages are larded with shares of stock and stock options).Though it’s seldom discussed in the media, lower-income earners and their families bear the brunt of the burden of higher gas prices. Not only are lower-income people less likely to be able to work from home, they’re also more likely to commute for longer distances between work and home in order to afford less expensive housing.Big oil companies could absorb the higher costs of crude oil. The reason they’re not is because they’re so big they don’t have to. They don’t worry about losing market share to competitors. So they’re passing on the higher costs to consumers in the form of higher prices, and pocketing record profits.It’s the same old story in this country: when crisis strikes, the poor and working class are on the frontlines while the biggest corporations and their investors and top brass rake it in.What to do? Hit big oil with a windfall profits tax.The European Union recently advised its members to seek a windfall profits tax on oil companies taking advantage of this very grave emergency to raise their prices.Democrats just introduced similar legislation here in the US. The bill would tax the largest oil companies, which are recording their biggest profits in years, and use the money to provide quarterly checks to Americans facing sticker shock as inflation continues to soar.It would require oil companies producing or importing at least 300,000 barrels of oil per day to pay a per-barrel tax equal to half the difference between the current price of a barrel and the average price from the years 2015 to 2019.This is hardly confiscatory. Those were years when energy companies were already recording large profits. Quarterly rebates to consumers would phase out for individuals earning more than $75,000 or couples earning $150,000.Republicans will balk at any tax increase on big oil, of course. They and the coal-industry senator Joe Manchin even tanked the nomination of Sarah Bloom Raskin to the Fed because she had the temerity to speak out about the systemic risks that climate change poses to our economy.But a windfall profits tax on big oil is exactly what Democrats must do to help average working people through this fuel crisis. It’s good policy, it’s good politics and it’s the right thing to do.
Robert Reich, a former US secretary of labor, is professor of public policy at the University of California at Berkeley and the author of Saving Capitalism: For the Many, Not the Few and The Common Good. His new book, The System: Who Rigged It, How We Fix It, is out now. He is a Guardian US columnist. His newsletter is at robertreich.substack.com
TopicsOil and gas companiesOpinionOilCommoditiesEnergy industryUkraineRussiaUS domestic policycommentReuse this content More - in US Politics
How the US ban on Russian oil risks splitting the west’s response
How the US ban on Russian oil risks splitting the west’s responseAnalysis: The lights will not be going out in America but the same cannot be said for the EU, given its energy dependence on Moscow
Ukraine-Russia war – latest updates
Joe Biden’s decision to ban imports of Russian oil increases the economic pressure on Vladimir Putin – but it is not without risk.On the face of it, the announcement from the White House looks like a bit of a free hit, given the fact that Russia accounts for just 7% of the oil imported by the world’s biggest economy. Three-fifths of Russia’s oil exports go to the EU, only 8% to the US.Even so, Biden is taking a gamble for three important reasons. The first is that a toughening up of sanctions has given another upward twist to oil prices. American motorists were already paying higher pump prices, even before the latest surge in the cost of Brent crude above $130 a barrel and, as the US president admitted, they will soon be paying even more.Oil prices are up by 70% since the start of the year and there is no sign of them coming down anytime soon. The Oslo-based consultancy Rystad Energy has predicted a complete ban on Russian oil and gas could send crude prices to $200 a barrel. The previous milestone was the $147-a-barrel peak reached in 2008.The second risk is that Biden’s action fractures the western coalition against Putin, which in the first two weeks of the conflict has been solid. While support from the UK (phased in by the end of the year) means the US is not going it alone with its ban, other European countries clearly have misgivings. That is hardly surprising, because the EU gets 40% of its gas and just over a quarter of its oil from Russia.European oil receipts boosting Putin’s war chest by $285m a day, study findsRead moreSo when Biden said the west remained united in its determination to keep the pressure on Russia, that is not strictly true. The EU, as the German chancellor, Olaf Scholz, made clear 24 hours before the US ban was announced, is worried about its energy security and has decided not to follow suit, for now at least. There is no risk of the lights going out in the US; the same could not be said of every country in Europe.This dependency on Russian energy creates a third risk, namely that Putin gets in his retaliation first by cutting off supplies. The EU has announced steps to reduce its dependency on Russian oil and gas, and the crisis could well have the effect of speeding up the transition from fossil fuels to clean energy, but in the short term the loss of such a big chunk of its energy supply would result in weaker growth and higher inflation.While high energy prices eventually prove self-correcting because they tend to lead to recessions, the damage they can cause is considerable. UK living standards are on course for their biggest one-year fall since modern records began in the mid-1950s, with the war in Ukraine putting at risk the post-pandemic recovery. All of which makes it important that sanctions work quickly. The longer the economic war, the higher the cost.TopicsOilGasCommoditiesUS politicsEuropean UnionEuropeRussiaanalysisReuse this content More - in US Politics
Oil executives face ‘turning point’ US congressional hearing on climate crisis
Climate crimesUS CongressOil executives face ‘turning point’ US congressional hearing on climate crisisThe heads of top US oil companies will answer accusations that their firms have spent years lying about the climate crisis Supported byAbout this contentChris McGrealThu 28 Oct 2021 03.00 EDTLast modified on Thu 28 Oct 2021 03.01 EDTThe heads of major oil companies will make a historic appearance before Congress on Thursday to answer accusations that their firms have spent years lying about the climate crisis.For the first time, the top executives from the US’s largest oil company, ExxonMobil, as well as Shell, Chevron and BP will be questioned under oath about the industry’s long campaign to discredit and deny the evidence that burning fossil fuels drove global heating.The dirty dozen: meet America’s top climate villainsRead moreA leading critic of the petroleum industry behind the hearing by the House oversight committee, Representative Ro Khanna, said the executives’ testimony has the potential to be as significant as the 1994 congressional hearing at which the heads of the big tobacco companies were confronted with the question of whether they knew nicotine was addictive.They denied it and that lie opened the door to years of litigation which resulted in a $206bn settlement against the cigarette makers.Khanna told the Guardian that the oil company chiefs face a similar moment of reckoning.“They’ve got a very tricky balance. They either have to admit certain wrongdoing or they run the risk of lying under oath. If I were them, I would come in with more of a mea culpa approach and acknowledge what they’ve done wrong,” he said.“It’ll be a turning point for them. It could be the big tobacco moment. We’ve never had a situation where the big oil executives have to answer under oath for their company’s behaviour.”Khanna said that he wanted Americans to take away the message from the hearing that the oil companies “knew they lied” about the climate emergency.The CEOs, who have opted to testify by video, are Darren Woods of Exxon, David Lawler of BP American, Michael Wirth of Chevron and the president of Shell, Gretchen Watkins.The leaders of two powerful lobby groups accused of acting as front organisations for big oil, the American Petroleum Institute and the US Chamber of Commerce, will also testify.Khanna said the oil chiefs will be confronted with evidence of a persistent and coordinated cover-up, including documents that have not been made public before.“The documents confirm the misinformation and deception that they’ve engaged in in the past explicitly, and that they continue to engage in through third parties,” he said. “The record is so clear that they will be risking perjuring themselves if they deny the record.”But the hearing will also be a test for whether the oil industry’s critics can back up their claims of a sprawling conspiracy by the fossil fuel companies to block action on the climate emergency – an accusation also made in dozens of lawsuits by US states, municipalities and private organisations.Geoffrey Supran, a research associate at Harvard’s department of history of science and co-author of a groundbreaking study of Exxon’s communications on the climate crisis, said the oil executives are well-practiced at sidestepping responsibility.“This will be a challenging hearing. This is a situation where the historical record is incontrovertible but the climate denial machine has been like a sprawling, well-oiled, well-funded network for decades,” he said. “Given the range of actors and tactics involved, asking the right questions at the right time, having the right documents at your fingertips to pin them into a corner is tricky.”The hearings follow the release of a growing body of evidence that the oil industry knew about and covered up the growing threat from burning fossil fuels for decades. That includes a raft of Exxon documents held at the University of Texas, and uncovered by the Columbia Journalism School and the Los Angeles Times in 2015.In 1979, a study by Exxon’s own scientists concluded that burning fossil fuels “will cause dramatic environmental effects” in the coming decades. It called the issue “great and urgent”.Exxon’s response to that and similar warnings was to shut down research into global heating and to go on a public relations offensive to discredit climate science as no more than a theory, and to shift responsibility on to consumers.In 2019, Martin Hoffert, a professor of physics at New York University, told a congressional hearing that his climate modelling for Exxon in the 1980s showed that burning fossil fuels was “increasingly having a perceptible influence on Earth’s climate”.Meanwhile the company was pushing a different narrative.“Exxon was publicly promoting views that its own scientists knew were wrong, and we knew that because we were the major group working on this. This was immoral and has greatly set back efforts to address climate change,” said Hoffert.Other oil firms face similar accusations alongside trade groups and thinktanks they funded to deny climate science.This story is published as part of Covering Climate Now, a global collaboration of news outlets strengthening coverage of the climate storyTopicsUS CongressClimate crimesExxonMobilRoyal Dutch ShellChevronBPOilUS politicsnewsReuse this content More
