Gas Cost Fallout: Major Oil Companies Amass $205B in 2021 Profits, Draw Criticism for ‘Not Flipping the Switch’ Fast Enough

offshore oil rig in ocean

While consumers dig deeper into their wallets to pay for record high gas prices, major oil and gas companies have been raking in massive profits. Instead of spending that money on more production to ease consumer prices, many are putting it toward shareholder dividends and stock buybacks.

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Twenty-five leading oil and gas companies announced a combined $205 billion in profits in 2021, reported, citing a new report from government watchdog Accountable.US. Companies used part of the proceeds to buy back more than $35 billion in stocks while also hiking dividends.

For example, Occidental Petroleum, Colorado’s biggest oil producer, announced in late February that it will hike its common dividend to $0.52 per share from $0.04 per share, the Denver Post reported this week.

The industry oil and gas industry expects an “even better” 2022 for shareholders, according to Accountable.US, with plans to buy back more than $80 billion in shareholder returns already announced. 

Meanwhile, the industry sits on 14 million acres of already leased land that isn’t being used, the Guardian reported in December. This has not gone over well with some people. Last year U.S. Energy Secretary Jennifer Granholm said oil and gas companies “are not flipping the switch [on new production] as quickly as the demand requires.”

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The oil and gas industry puts much of the blame on the Biden administration, which has attempted to pause new drilling permits on federal land. But that doesn’t explain why oil companies aren’t ramping up production on land that is already leased.

“It’s not the government that is banning them from drilling more,” Pavel Molchanov, an analyst at Raymond James, told CNN in December. “It’s pressure from their shareholders.”

More recently, Kyle Herrig, president of Accountable.US, said in a statement that the industry’s focus on the Biden administration’s land policies is “a cover to cash in on inflation and the crisis in Ukraine, and pass the benefits of their massive profits on to consumers.”

At the end of 2021, four of the world’s biggest oil and gas companies — BP, Exxon Mobil, Shell and Chevron — all posted the highest profits they’ve seen since 2014, the Denver Post noted. Each company attributed those profits to surging oil prices amid a rise in demand as COVID-19 restrictions eased, while supply remains low.

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About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, was published in 2021 by Atmosphere Press.
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