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More drilling permits needed to ease gas prices, oil companies tell Congress

More drilling permits needed to ease gas prices, oil companies tell Congress

Executives from some of the world’s largest oil corporations will testify before a US congressional hearing on high gasoline prices that they need the government’s support in obtaining more drilling permits to help customers save money.

In prepared testimony, Darren Woods, CEO of Exxon Mobil Corp., and Gretchen Watkins, head of Shell PLC’s US business, claimed their companies don’t control gas stations and hence don’t set fuel pricing. The oil majors have stated that they require government assistance in order to produce more petroleum and fulfill increased demand, resulting in reduced gasoline prices.

In written evidence, Woods stated, “Government plays a crucial part in this.” Effective government permitting for oil corporations to lease territory, drill wells, and build pipelines “would help drive additional investment in U.S. oil and gas production,” according to the report.

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The hearing, which is being held by a subcommittee of the House Energy and Commerce Committee, comes as congressional Democrats try to emphasize oil firms’ record profits as gasoline prices near $4 per gallon raise political concerns ahead of the midterm elections. Top officials from BP America Inc., Chevron Corp., Devon Energy Corp., and Pioneer Natural Resources Co. will testify remotely alongside Exxon and Shell.

In prepared testimony, Watkins stated, “The Interior Department should terminate its moratorium on federal oil and gas leasing.” “Also, expediting the permitting of otherwise ready oil and gas projects would bring new oil and gas supplies online in weeks or months.”

According to a letter sent Monday to the executives of Exxon, Chevron, BP, and Shell, the companies spent $44 billion on stock buybacks and dividends last year and have promised $32 billion to investors this year, according to a letter sent by House Democrats to those companies’ executives asking them to suspend stock buybacks and dividends for the duration of the war in Ukraine.

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Representative Diana DeGette, a Democrat from Colorado who chairs the House Energy and Commerce Oversight and Investigations subcommittee, pointed out that some of the country’s top oil companies are reporting record profits.

As gasoline prices have risen in recent months, each of the participating executives’ testimony largely reiterated previous talking points, such as the need for streamlined regulations, their own investors’ demands for financial austerity, and the balance between increasing oil supplies while transitioning to low-carbon energy. They also discussed the importance of increased energy security in the aftermath of Russia’s invasion of Ukraine.

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“For much of my life, I’ve seen U.S. energy security — and our economic well-being — jeopardized by OPEC members, Russia, and other oil-producing countries’ energy domination,” Pioneer CEO Scott Sheffield testified. “I don’t want to see my grandchildren suffer the same fate as me as a result of actions taken to weaken the United States’ oil and gas industry or to create new reliance on China and other foreign countries for the batteries, solar panels, wind turbines, and rare earth minerals that we will need as we make steady progress toward a lower-carbon economy.”

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