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tv   Oil Executives Testify on High Gas Prices  CSPAN  April 28, 2022 7:20am-10:01am EDT

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billion cubic feet additional, over and above. we have two new facilities coming online. so with that, madam chair, i want to thank you for your time. >> i thank the gentleman. at this time, all of the members of the oversight subcommittee have questioned the witnesses. and at the request of the witnesses, we are going to recess. and so the chair will announce that the committee will stand in recess for ten minutes. and we're going to return promptly, because we have many, many more people to question and we're going to have votes on the floor. so the committee is in recess for ten minutes.
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the meeting will come to order and the chair is now very pleased to recognize the distinguished chairman of the energy subcommittee, mr. rush, for five minutes. >> i want to thank you, madam chair, for this standing hearing. madam chair, the overall profits on the u.s. energy companies are the greatest profits ever recorded in the history of
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mankind, of the human species. let me be clear. these profits are outrageous on its face. madam chair, look at these profits. exxonmobil, in 2021, $23 billion in profit. chevron, 2021 profit came in at $15.6 billion. and last but not least, shell. shell company's profit, $19.3 billion. these are outrageous profits. in the weeks following the russian invasion of ukraine,
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many oil and gas companies listed themselves from the russia, including bp and exxon. ms. watkins, the same week that other companies announced that they would take a step back from russia, your company was buying cheap russian crude oil. shell bought over 700,000 barrels of russian crude oil for nearly $30 per barrel under the international oil prices. it managed to convert that oil into product that is sold at normal prices.
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that single purchase will represent over $20 million in profit. these profits are nothing short of war profits. blood money. soaked in the blood of innocent ukrainian citizens. shell has since apologized, but it seems to me that it is an insincere apology. are they sorry they did it or are they sorry they got caught while doing it? ms. watkins, let's have some truth now, some true things. when was the decision made to purchase that cargo of oil?
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>> congressman, i'm not sure when that decision was made. but i can tell you that we have -- >> you're not sure? who approved the purchase? >> our ceo, brendan burden, came out and said he had approved that and he had made a mistake and he has apologized for that. i can tell you, the situation in europe at the time was such that attempting to -- >> shell's chairman of the board also approved the purchase? >> sir, i'm not aware of how the approvals worked, to be honest. >> why does shell typically
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purchase urals crude oil? >> yes, urals is a type of crude we usually run on the our refineries, we were attempting to keep gasoline at our pumps for our customers. >> according to s&p, the russian crude oil bulk was supposed to be arrive. has that crude oil arrived, has shell taken possession of it and has shell processed that oil through any of its refineries? >> yes, sir, i believe we have, so that we can supply diesel and gasoline to our customers in europe. who at this point in time [ inaudible ] spot purchases of crude and we ceased all spot purchases of lng from russia. we're doing none of that at this time. >> madam chair, i'm running out
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of -- let me ask -- madam chair, i yield. >> the chair now recognizes mr. scalise for five minutes. >> thank you, madam chair, for yielding and for holding this hearing. i have some questions for the witnesses. but first, before we talk about why we're here, i think it's important to go back and look at how we got here. americans are furious that gas prices are so high but they also know that president biden walked in, day one, with an agenda to kill american energy. and don't take my word for it. let's go back to candidate joe biden. when joe biden was a candidate for president of the united states, he was very clear what he wanted to do to shut down american energy production. as a candidate, and here you see him to the left, ironically, the bernie sanders, joe biden said,
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quote, no more drilling on federal land, no more drilling including offshore, no ability for the oil industry to continue to drill, period, end. that was joe biden as a candidate, said he wanted to kill american energy. and i wish it ended there but that's just where it got started. he then went on and issued a barrage of mounds of red tape from every one of his federal agencies to make it harder to drill in america. not in other countries, by the way. just in america. look at all the agencies that president biden used to go after american energy producers. the department of energy, the federal energy regulatory commission, securities and exchange commission, the department of agriculture, the council on environmental quality, the department of state, the environmental protection agency, the department of justice, the department of interior, all of
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these federal agencies putting mounds of red tape on every american driller making it harder to drill in america. look at a few of them. of course we all know keystone, day one, coming from the state department. killed the keystone pipeline. he's not against all pipelines because he turned around and gave a gift to vladimir putin in green lighted nord stream so he made american energy less secure but he said it's okay for russia to produce oil and send it to europe, making them addicted to russian oil, helping fuel, by the way, putin's war against ukraine. putin is getting -- before the invasion, was getting over $700 million a day selling his oil to america and to europe because president biden issued this assault on american energy. now, again, go back to what biden said. he did say that he was going to do it. no more drilling, including offshore. so what happens when you kill
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american energy through all these biden red tape policies? the price goes up. just look at it. it didn't start when russia invaded ukraine. the price was going up from day one when biden took office because he carried out an assault on american energy. so if you want to solve the problem, you don't need to reinvent the wheel. how about you first get rid of this entire assault from every federal agency i just mentioned on producing oil in america? none of these rules and regulations, by the way, apply to russian oil. none of them apply to iranian oil. none of them apply to venezuela. yet that is who president biden is begging to produce oil. stop begging dictators to produce american energy and turn to america. where, by the way, we do it cleaner than anywhere in the world. russia has a much higher carbon footprint. maybe we can have a footprint on that. the carbon footprint of joe biden's anti-american-energy
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policy. the good news is there is help on the way. republicans have filed more than 60 bills, by the way, 60 bills to reverse this barrage and assault on american energy by president biden. more than 60 bills. our ranking member, cathy mcmorris rodgers, has a bill. there's bills to do all kind of things to actually allow us to produce our resources. by the way, cleaner than anybody else in the world. that's where we should be going with this. but i've got some questions for our witnesses. and i'm start with mr. lawler. my question is, does this whole mountain of red tape by president obama make it harder for you to produce more energy in america? yes or no? mr. lawler. >> in general, you know, regulations that are supportive of the industry are helpful. regulations that help improve the energy transition are helpful. >> so are these supportive of the industry? you've seen 'em, you know these, you have to comply with 'em.
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that's one of the reasons you can't produce. i talked to people who produce in all parts of the country and they tell me it's these regulations that are stopping them. mr. wirth with chevron, do these regulations make it harder for you to produce energy in america? >> yes, they do. yes, they do, congressman. >> mr. sheffield. >> yes, they do, sir. >> mr. moncrief. >> yes, they do. >> ms. watkins. >> congressman, certainly some regulations are necessary for our business. but as i said before -- >> do these? >> -- we've got outstanding permits that, if approved, would be -- enable us to bring even more production -- >> let's open up -- >> the gentleman's time has expired. the chair is pleased to -- >> i yield back the balance of my time. >> the chair is now pleased to
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recognize the hair of our house subcommittee, ms. eshoo, for five minutes. >> thank you, madam chairwoman, for holding this very important hearing today and for extending the legislative courtesy to me to participate. in response to russia's invasion of ukraine, over 50 american companies have pulled out of russia, including bp america, exxon mobile, and shell usa. to those who have, i salute you for that. those that haven't, that are with us today, do you plan to do so? no response? okay. one policy that congress is
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considering to address the soaring gas prices is suspending the federal gas tax, a tax holiday, so to speak, of 18.4 cents per gallon. and there is a serious debate over whether gas prices would actually fall by this amount in the not too distant future. my question is, if your companies can pull out of russia, can you also commit to passing on the full savings of a gas tax holiday to consumers? we'll go through the panel. it's a yes-or-no answer. are you refusing to say anything? it's a yes-or-no answer.
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>> congresswoman, i'll start, this is mike wirth with chevron, i was waiting to see if somebody was going to go through the list. we can certainly discontinue the collection that have tax. prices move every day in both directions. so i can't guarantee you that the price will go up or go down due to a variety of other factors that influence prices. but we collect the tax on behalf of the government and submit it to the government. if that tax were suspended, he would no longer collect it and pass it on to the government. >> so it would go to the government, but would the consumers that are buying the gas, trying to fill their tanks, would they be the beneficiaries of that, direct beneficiaries? >> i appreciate your question, congresswoman. let me try to be more clear. the consumers would no longer pay that tax, we would no longer collect that tax. the price of gasoline could go down more than that or it could
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go the other direction depending on a variety of other factors that are in work in markets eve and every day. >> to the other gentlemen and gentlewoman. >> yes, so congressman, what i would share is, a similar comment, in that it is a very complex market, that might precipitate increased demand which could also increase prices. and i would just tell you it's very complex, market-based decision. >> but can't you bring more clarity to this than just saying that everything is so complex? you know, i know that this is not pleasant, but the american people are really not with you. they're angry. they're angry. and, you know, when -- i think every american company owes something to america, to the
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american people. there's pain at the pump. and really, what underlies my question is, what can you do to help alleviate that? you know, if you don't plan to do anything or hope to do something, then i think that becomes absolutely apparent. but i think that it will just add to another layer of the deep anger and resentment of the american people. so let me go through the rest of the individuals that are testifying today on my original question. >> congresswoman, this is darren woods with exxonmobil. i will just tell you, i think the point mike made, it's a function of the supply and demand. if the demand picks up, the supply will pick up. we want to increase the supply
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to american consumers. >> you're essentially saying no, because if there were to be a tax holiday, then -- that the consumers at the pump to fill up would not get the benefit? >> no, what i'm saying is that that tax holiday doesn't change the amount of supply and the question is how does supply and demand balance out which will ultimately set the price. i think what you're seeing is nobody knows exactly how that supply and demand balance would be struck. but that is what would ultimately determine supply. the way to influence price is to raise supply. >> the gentlelady's time has expired. >> i thank the gentlewoman and i yield back. >> thank you. the chair now recognizes mr. latta for five minutes. >> i want to thank the chair for allowing me to waive on today's hearing and i also want to thank our witnesses for testifying before us today. today we're seeing the blame game played with maximum effort
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by our democrat colleagues. we have heard the other side of the aisle, the biden administration, to point their fingers in every direction to seek a culprit for the rise in energy prices. what the administration should be doing is pointing their fingers in the mirror. since day one of his administration president biden has pursued policies that would restrict the ability to produce oil and natural gas in the united states. he canceled the keystone xl pipeline, issued a moratorium on leases for oil and gas exploration on federal lands, used the immense regulatory powers of the administrative state to bog down the permitting process for energy infrastructure projects, and pushed his financial reporters to squeeze investments in the fossil fuel industry. now he's trying to convince the american people that this full-court press and anti-american energy policies is not contributing to the rise in gas prices. instead they say it's entirely the fault of greedy oil companies and the war criminal putin. i'm glad we're holding this
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hearing today so we can set the record straight and get the answers for the american people as to why they are hurting when they go to fill up their car at the pump. general mcmaster, first i want to thank you for your service to our nation. in light of the horrible crimes that were discovered over the weekend in ukraine perpetrated by the russian army, many western nations are now catching up to the united states and recognizing the need to end the importation of russian oil and gas. lithuania has become the model for this, where that nation went from being fully dependent on russia for energy only a few years ago to now having the ability to end any russian imports. general, what will be the result of this decision by the western european countries to end russian imports and how will that impact gas prices here and around the world? >> congressman, the result in the near term will be to constrain the supply even further. but i think the key is that we
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have to start racing now to catch up to be able to displace russian oil and gas in the market as well as to pursue solid supply chains for the transition to renewables. i think what's really important about what europe is doing is to follow up now on infrastructure investment. so much of that infrastructure was designed to keep russia's coercive power over those economies. some big investments needs to be made on infrastructure on our side of the atlantic as well as in europe. and then also it's really important to recognize that we need a rational approach to energy security and climate and carbon emissions. germany made a leap, they made a leap away from nuclear and a leap toward renewables without investing in hydrocarbon infrastructure and as a result, they leapt off a cliff and can't keep the lights on. so it's very important for us to recognize that as we pursue reductions in carbon emissions, that we have a sensible approach
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to energy security. >> thank you. mr. woods, there have been efforts to shut down pipelines across the country, including line 5, which serves five which michigan. last year, we saw how gas prices were impacted and shut down the colonial pipe line, would you speak to the consequences of antipipe line advocates if they got their way and more pipe lines were shut down? >> thank you for the question, congressman, infrastructure plays an incredibly important role with respect to energy supplies and keeping reliable and energy affordable for american people around the nation. what you tend to find is sources of supply, refining in the gulf coast is feeding demand in the east coast so having those pipelines available is absolutely critical. as up stream production and natural resources for gas are found, that production needs to happen up fed to markets and
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feed the pipe lines which are most efficient environmentmentaly sound, stopping those lines to consumers, or refineries or demand centers puts an imbalance to the supply and demand, increases prices and reduces security for people in accessing those reliable and affordable energy. >> thank you. mr. lawler in my last 30 second, what role can the united states play with supplying fuels and reducing gas need from countries like russia. >> thank you, i think u.s. is on track to be a leader and i think b.p. is participating in that, as i mentioned early, we're spending two to $3 billion this year, will be spending $4 billion around the 2025 time frame and it is important we keep our eye on both topics
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right now. very important we get near term supply up as we all discussed, also important we follow through on clean energy environment that we all want to live in in the future. >> now recognizes the chair of the select committee on climate change crisis, congresswoman caster from florida for five minutes. >> thank you, chair, again, holding this important hearing on price gouging by big oil companies. it's truly outrageous and we've seen since putin's attack on ukraine, a rise at least 75% or 75 cents and i feel feel for the small business owners and parents trying to get their kids to school everyday. they have supported the ban on russian oil imports to america so they're doing they're patriotic duty, willing to help the ukrainian people and now it's time for the big oil corporations to do the same. time for the big oil companies
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to lower prices rather than pad your bottom line. it is time for you to end the billions of dollars in american-funded tax payer subsidizes that are supporting your businesses. it's time to stop your decades long obstruction of the transition to clean energy which would provide lower cost to consumers, the cars and trucks we drive, the way we heat our homes and cool our homes. it's really scandalous it is this profiteering at a time when the ukrainian people and freedom are under attack and it's scandalous to watch year after year as you unleash your lobbyist and the grand oil party to block action to get to true energy security. and what can that look like? because america is already number one, the number one producer of oil and gas, has that insulated us from the volatility and price spikes?
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it hasn't, and i want to remind everyone, it was just a few years ago the congress and big oil companies pressed to allow export of petroleum products from the united states, something that many of us opposed at the time. u.s. exports, they said, would allow us to become more independent, this would lower prices. has that happened? no. and more than a half a million barrels of petroleum exports leave the united states for china everyday. going down the line, i want to ask each of the ceos how much of your product, produced in the united states does each of your companies export to china? largely being aligned with putin these days. mr. lawler? >> thank you, congresswoman, so i i can't speak to the exact volume. as you may know, the world
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market -- >> just a quick number is all we need. mr. worth. >> congresswoman, that's not a number that i have at hand, but i'd be happy to follow up with your staff. >> mr. monkery. >> we export about 10% of our production predominantly to europe. >> i'm just asking about china. >> oh, i don't think we have any to china. >> all right. mr. williams. >> i'm not aware of that number. i think it's a very small one, but we can follow up with you. >> mr. sheffield. >> a very small number. >> ms. watkins. >> i don't have the number, but i can also follow up with you with it. >> well, this is very important to know because we're looking for solutions. so one of the solutions may be to ban the export of our petroleum products to countries that are aligned influence in
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the world, but that's not the real answer. the real answer, of course, is breaking this dependence and addiction on oil and gas. renewable energy right now is the cheapest form of energy and it's getting cheaper every year. we've got to accelerate the transition to clean energy. it's more stable, more affordable, it's generated here at home. the house has passed legislation that's being blocked largely by lobbyists aligned with the fossil fuel companies that would lower the cost of your gas bill, would lower your ac bills, would lower the cost of electric vehicles and would provide, i mean, this is a time we've got to provide relief to americans and not double down on the same old wretched thing where we're addicted to oil and we can't get off. this is a time we must pivot, especially because the world's top scientists, early this week, said we are facing future
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catastrophe in much higher costs than the pain we see at the pump right now unless we make this break right away. our time is urgent and we have a moral obligation to our kids and future generations to give them a liveable planet and healthy economy where everyone can thrive and that's what we must do. i yield back my time. >> chair now recognized mr. guthrie five minutes. >> thank you, madam chair, masters, i have this question for you. and i've known you for 39 years now, from this summer and so i followed your career the whole time since we first met at west point. and i know your intellect, you're an academic, straight shooter, sometimes your straight shooting took you some lonely places so we should find your analysis and what you say to be very thoughtful and something we should find very sobering. in your testimony, you argue
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that energy security for saving the planet is not a false choice. energy security including american independence including fossil fuels is not a false choice and your book battle grounds which i read when it first came out you talked about climate change and the importance to address climate change, you absolutely do not dismiss it so would you expand upon the question that energy security versus saving the planet is not a false choice? >> thank you, congressman guffrie, for your service and the fond memories from many years ago at west point. i really believe it's a false choice, the problem is i believe what we've been doing is pursuing nonsolutions and we can't afford to pursue nonsolutions anymore and what i mean is this idea that we can have an energy transition that all of a sudden moves from fossil fuels directly to renewables without a bridge in place, and of course this is where the u.s. can play such an important role by providing the bridge associated with natural
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gas and the displacement of coal in particular. if we want to save the planet, we have to get off of coal for energy generation. that was the largest reduction in co2 emissions ever in the history of the world was what we did in the united states associated with the opportunity presented by few national gas. it's extremely important to recognize whatever we come up w whatever exquisite solution to co2 emissions and climate change, it has to be applicable in developing economies because they just won't do it. they're not going to compromise economic growth and moving people out of poverty for some exquisite solution that isn't consistent with what the market will bear. so affordable renewables, yes, huge part of it, but also a big part of it is relatively inexpensive natural gas which we can get to with increased production and export. and then finally, its emerging capabilities like next
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generation nuclear which can be combined with hydrogen to meet so much of this demand and do it at a zero emissions level so it's a combination, congressman, and what's sad about it, we continue to pursue these nonsolutions and get the opposite effect of what we desire. for example, burning coal exports going up, co2 emissions going up, in large measure because of our pursuit of these nonsolutions. >> thanks, i want to ask you another question. talking about, you said in renewables, we're still going to be dependent on supply chains in foreign countries. it's reportedly we left $3 trillion in critical minerals in afghanistan. we left them in the hands of the taliban and their new friends, the chinese. would you comment on that? >> congressman, the competition with china occurs in places outside of the indo-pacific region, in this case, pointing out how important south asia is but i would argue it cuts across
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the middle east, south africa and now the importance of resilient supply chains, especially those associated with renewable energy and energy transition. you know, of course, an electric car, i don't know how many magnets is in an electric car but it's a lot, and then magnet manufacturing the whole up stream supply with rare earths and other critical minerals, separation from ore, that has to be resilient and only way we'll get there is on shoring and near-shore and get that has to be a major focus of this committee as well as the biden administration. >> one more thing, in your written statement, you argue that opec isn't expanding their production when president biden has puts down a request because they're concerned with his dealing with iran and the iran deal, would you comment with that and also what's going on in yemen. comment on that as well? >> it is what i would characterize as a nonsensical
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committee policy, among them, saudi arabia and the united arab emirate and see they're upset about a very weak iran nuclear deal that would essentially give the dictatorships and iran cover for continuing the nuclear missile programs, a great threat to all of them in the region and obviously a great threat to israel and also our failure to designate the roofies in yemen as a terrorist organization, even when fireering into saudi arabia, so we ask them for cooperation but of course they're not giving it to us because they're angry with us and i think in some cases, rightfully so, because of a unwise approach to the middle east and to iran. >> thank you, my time's expired, i yield back and look forward to seeing you again soon. >> thank you so much, chair now recognized mr. sarbines five minutes.
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>> thank you, madam chair, thank our witnesses for being here today. let me say up front, put my cards on the table, i don't trust you. i don't mean that in a sense i question your personal integrity, i don't, but i recognize your role. your role is to lead large for-profit corporations that are looking to maximize the return to your shareholders. so when i say i don't trust you, what i mean is i don't trust you not to take advantage of this situation to try to meet that goal. i think that there's clearly an opportunity to profit from this crisis that's occurred in ukraine from the disruption to the global supply chain of oil and gas and it's an opportunity
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that you're seizing on, again, i understand why. you want to satisfy your shareholders. i won't speak to what it means for your executive compensation but that's your impulse. and earlier we saw a pretty revealing chart that congresswoman biguet layed out where she can see it obviously the price of crude oil had spiked when the invasion occurred, initially the disruption and predictably, the price at the gas pump went up as well but then she showed how the price of crude has come down but the prices at the pump have not come down.
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so i think what that reflects is this ability to kind of manipulate the situation your industry can say we expect the cruel oil price will go up, so you can anticipate that by charging more to the retailers and then if the price comes down, you can say well it's coming down, crude's coming down, but it's going to take a few days before that can be passed along, or maybe we can't pass it along yet because we think the price may go up again. you've got a lot of latitude to manipulate and take advantage of the situation in ways that will boost your profits. and sometimes it's legitimate to use phrases like there are a variety of factors in the market place, prices move up and down
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everyday. that's the industry. i understand that, but sometimes that can just be a good way to cover up what is an effort to, or an opportunity to price gouge. the fact of the matter is that your customers, not just the generic consumer at the pump, these are your customers. these are your red-blooded patriotic american customers. many of whom who when interview the are saying we're willing to take a hit, pay a little more to address this invasion. so they're stepping up. so if you realize savings, don't you think it's the patriotic thing to do to pass that savings along? let me start with you, mr. lawler. if bp america's realizing savings because the price of crude is going down now so
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you're saving money on that end, isn't it the patriotic thing to do to pass that savings along to your customers at the pump? >> so congressman, as mentioned before, we sell our crude oil into a market, and it's a competitive market and we sell all of our refined products into a competitive market and we buy feed stocks for our refinery in a competitive market and it is not something bp controls. >> mr. worth, i'm going to see if i can get a better answer from you. you have cost. costs go up, costs go down. if the price of crude is going down that represents a savings to your operation, does it not? >> yes, sir. the question, crude goes down, decreases cost of input to refineries, is that correct? >> is it the patriotic thing to
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do when that happens as it has happened based on what congresswoman showed us early, is it the patriotic corporately responsible thing to do to pass those savings along to your customers at the pump? >> congressman, no single company controls prices -- >> i got it. my time's out. there's a lot of hocus pocus language you can throw up here. i think you need to pass savings along when you realize you had done that recently, that can benefit the consumer. again, your loyal, devoted customer at the pump and i yield back. >> gentlemen's times's expired. >> thank you, madam chair, thank you again to the witnesses for coming to testify at this very important hearing. some of my democratic colleagues have for weeks and especially during this hearing, lambasted
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american oil and gas companies for prices at the pump and attempted to deflect criticism from the president and his rhetoric and policy that is critically sought to defer the domestic oil and gas production. my republican colleagues have talked about the negative impact that it has had domestically because of the president's green new deal policies. that's what they are. now, i want to highlight the biden administration that it isn't, in other words, is it jeopardizing the united states energy and independence and security, i think it is, it's actively intervening to stop foreign fossil fuel projects that empower our allies and reduce europe's dependence on russia's energy, for example, talking about the biden's administration recent reversal of the east met pipeline which would have delivered natural gas from east israel, and cypress, to southeastern europe. makes sense, the parts of europe
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most dependent on russia and i'll add the president in 2014, when he was vice-president, approved of this project. after establishment of u.s. support in 2019, for our allies, energy and dependent energy projects, specifically mentioning the pipeline, the biden administration reversed course. why? contradicting u.s. policy and not following the law as outlined and as coled and most of us voted for and was signed into law, the eastern mediterranean act of 2019. we're seeing what happens when europe is energy insecure right now in ukraine. nobody can deny that and even going back into 2006, the extended effect that that's had on your own national security and that of our nato allies. thank you for your service,
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general mcmasters and i have a question for you, in your testimony, you talked about putin's long history of trying to coerce neighbors to extend russia's influence. could you please briefly describe the positive impact the east met pipeline could have on reducing the energy dependence on southeastern europe countries, european countries, and hopefully preventing repeat, a repeat of what's tragically happening in the ukraine, in countries like romania, bulgaria, i could go on, moldova, let alone nato allies. if you could call on that, i would appreciate you. >> what you're highlighting is a tremendous opportunity for international investment in infrastructure. the current infrastructure giving russia course of power has to be circumvented and circumvented in a number of ways, from eastern mediterranean is one tremendous possibility, as well as the infrastructure you see in southeastern europe
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such as curo island for import terminal, it's important to recognize a lot of the infrastructure russia's using is old soviet infrastructure, so for example in ukraine, where they're concentrating the offensive now in the donbas, that's the area in which about 90% of the energy infrastructure and potential in ukraine lies and that's not a coincidence. ukraine is designed to export, right, energy, not receive energy imports. so these sorts of infrastructure investments are immensely important and of course, people argue it's going to take a long time. well it takes a much longer time if you never start, so i think in every crisis we should look for an opportunity. one of the opportunities here is renewed investments in energy infrastructure globally. >> thank you general, common sense, just talking about the pipeline from a national security perspective as well. from what i've been hearing, my colleagues across the aisle and president of the united states don't seem to understand or
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willfully ignore that their absence not only affect current prices, but heavily influences decision-making focus in the future like investments, of course, oil futures and oil price contracting, all which feedback to defect the current and future prices as well. so mr. worth, i know that chevron, especially after your acquisition of noble energy, you have a significance presence and activity in the eastern mediterranean. could you please describe the impact of the administration's reversal on the east met pipeline, not only on other private and pluck investments on natural gas projects in the region, but the east met pipeline currently in the stage of seeking investments and evaluating viability? if you could answer that question i would appreciate it, quickly. >> congressman, i appreciate you raising this issue.
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it's an important one. the eastern mediterranean has tremendous gas resources that currently serve only local and regional markets. we're working on a number of options to try to extend that gas into other markets and europe in particular. the eastern met pipeline is one alternative. it's a complex, costly alternative but it's a real alternative. we're looking at floating liquefied natural gas. we welcome the dialogue with others that could help mobilize the capital and infrastructure to get that gas to your market. >> chair now recognizes mr. welsh for five minutes. >> thank you, gentlemen, two issues here. one is a debate about the long-term energy and how quickly, in my view, we need to transition to renewables. but there's another issue that is immediate, and that is the impact of the war in ukraine.
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that brutal invasion that blood thirsty putin has inflicted on the people of ukraine and how that is caused so much destruction, pain for consumers everywhere, for eastern europe to the united states. in the question that all of us have is what can we do to support the people of ukraine in their effort to survive and what can we do to help everyday citizens who are living paycheck to paycheck to be able to pay the bills that have escalated particularly at the pump and for home heating loyal. this is not for me a debate about long term policy, i know we have disagreements here between me and colleagues and fraps some of you, i think we need to get to clean energy as quickly as we probably can but here's what alarms me. in march 6th, 2020, just before the shutdown as a result of
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covid, u.s. crude oil production was 13.1 million barrels per day -- yeah, thank you. on january, 2022, it has declined to 11.4. so what we've seen in that time is production has gone down, prices have gone up, and what we have seen particularly since february in the invasion, is that profits have exploded, dividends have been raised, executive compensation is up and shareholder stock buy-backs are up, $41 billion. so the question i have, and i'll start with mr. worth, is in the board rooms, there can be a decision about the allocation of the resources of the company, putting it into pruk,
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production, to build up to prepandemic levels, stock buy backs and dividends. all of these have increased. has there ever been discussion about lowering the price at the pump to help folks who are helping to bear the burden of the u.s. and our european ally support for the people of ukraine? >> congressman, i appreciate your concern. we share that concern for americans. >> not ask any about your concern, i know you're concerned, i'll grant that. i'm asking specifically, any discussion on fellows, maybe we ought to lighten up on the stock buy backs, the dividends and maybe lower the price at the pump, it will be tough, less profit, but that might help the cause here? any discussion about that? >> congressman, we have very lengthily discussions about capitol allocation, our production in 2021 was highest in our history, higher than
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prepandemic, capitol spending this year is up 60%. >> but do you dispute on figures, do you dispute my figures about the u.s. production is less now than it was before the pandemic? >> congressman, we went through tremendous economic contraction during the pandemic. there was no need for more supply as supply was -- >> that's right. you know, this is really, pretty simple, because you all have to make decisions and it gets all complicated and you got your economic models your computer log rhythms, whatever you have, but bottom line, you have a decision with the profit. you put it into stock buy backs, that helps shareholders, you put it into dividends, it helps shareholders or you put it into production and probably, under these extreme circumstances, with a war, with people dyeing in ukraine you say you know what, maybe we'll lighten up a little on the stock buy backs, a little bit on the dividends and maybe lighten up a little bit to help folks in vermont getting
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hammered with the price at the pump. is that a discussion? >> congressman, it is a discussion. we're investing more capitol to grow production. we can do that and return value to shareholders, they're not mutually exclusive. >> it is a world market and i agree with that. you don't have, even minute oil companies don't have total control over what the price s but they do have control over how they allocate capital between increasing production, profits, stock buy backs and between dividends. i yield back. >> chair now recognizes mr. johnson five minutes. >> thank you, madam chair. first of all, i want to thank our panel, some of the biggest names in oil and gas, for joining us today. and thank you all for what you do to keep the lights on, to power transportation and industry, to create thousands of consumer products and millions of jobs and quite literally to
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fuel modern life as we know it in america. you deserve praise for that. what you produce has lifted billions of people out of poverty around the world. but there's a problem. many of you have big advertising budgets. why won't you tell that story? i'm not going to name names but we've all seen the tv commercials from big oil filled with solar panels green climate messaging about how you're diversifying portfolio and how you're embracing liberal, progressive values, what's been your return on investment with that effort? you've taken a shelacking today from the democrats, do they seem impressed to show your allegiance to the antifossil fuel agenda? can do they give you credit for green overtures, esg commitments or carbon cutting plans? no, they do not. for heaven's sakes, they're blaming you for high gas prices, for inflation, for bad weather and all the world's problems
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that their failed policies are actually causing. your industry has a lot to be proud of. and americans know it. you just have to help us tell them. but if you continue chasing these radical green progressive values, these moving goal posts over the real value that you bring to our country and the world then the environmental left and the esg investors will crush you and the millions of americans that support, that need your support. so today, i want to give you a platform, ladies and gentlemen. first, mr. sheffield these are yet or no questions because i got a lot of them, pioneer resources, are you and your employees still proud of the oil and gas that you produce, knowing that it goes into so many essential products and industries? >> yes we are. >> thank you very much, mr. monkrey, devon energy, are you
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proud of the great paying jobs you provide in america's oil and gas fields. >> yes. >> thank you, very much, that's a big yes. mr. woods, exon mobile, are you proud that your company, one of the world's largest, provides resources that quite literally lift billions of people out of poverty globally? >> absolutely. >> okay. mr. worth, from chevron, are you proud that the jet fuel, diesel and gasoline that you sell plays such a vital role in americans getting to their jobs, getting their jobs done, taking care of their families and keeping our economy moving. >> i am absolutely proud of our people. our product and see values. >> mr. watkins from shell, are you proud of your company's investments to export more clean abundant american-liquefied natural gas and are you proud of the cracker plant in
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pennsylvania that produces a raw material that goes into literally thousands of products needed in everyday life in america, are you proud that the gas that you produce, that our european friends and allies need so much right now that they are literally dying for it. are you proud that you produce that product? >> yes, congressman, i am. >> thank you, very much, mr. lawler from bp, estimates say oil markets are going to be 3 million barrels a day shortly. with russian crude coming off the market, but the world needs that 3 million barrels that the russian market is going to collapse. would you be willing to help make up that deficit, perhaps from american resources? >> well i can tell you, congressman, we are focused on that. >> okay, that's a yes. i appreciate that. thank you very much. ladies and gentlemen, these are a few commercials that you folks could run. you've got a good story to tell.
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use these ideas to tell the american people the truth about what you do so they can quit being misled by the barrage of negative disingenuous false advertisement that you see coming from my democrat colleagues today. i'm going to yield back a whole 18 seconds of my time, madam chair. >> i thank the gentlemen. chair now recognizes mr. carnus for five minutes. >> we see him online. >> okay, if mr. carnus isn't here, chair recognizes mrs. dingle five minutes. >> thank you chair for holding this hearing. times are tough right now, american and see my constituents are really feeling it in their wallets, gasoline prices in
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michigan doubled to tripled in the last couple years, this means families as everyone is talking about are forced to cut costs while they see the oil companies making record profits. i had a uaw worker who at christmas time told me he couldn't visit his family because he simply can't afford it anymore. another worker who used to visit her mother every sunday said it's really hurting her so times like this underscored the importance of ramping up investments in manufacturing and clean energy and i'm going to say to my colleague, mr. johnson, look, i'm a car girl. i come from an industry that operates with the internal combustion engine and yet global climate change is real, we're 30% responsible for carbon emissions and coming together to work together. the oems, the workers and environmentalists to try to get to the next generation. that's what we're all talking about like this. we need to make this
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transformational shift to electrifying the transportation sector to reduce carbon emissions and our dependence on foreign energy sources while creating good-paying american jobs and strengthening clean energy supply chains. the fact of the matter is this is an economic and national security issue. i've heard each of you today point to, thank you to our witnesses, but i've heard each of you today point to the complex global commodity market or describe your company simply as price takers. the way you talk about your business it's as if you have no control over anything and that you're just helpless participants in the global market. but i'm not sure that's true. your decisions on whether to increase, sustain or decrease production affect the price per barrel. but isn't it true that your product is the majority of the price that someone is paying, that the customer is paying for
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the cost of gasoline? so if the price of your product, crude oil, is high, then the price of gasoline at the pump is high. correct? i'll quickly go down the line, just yes or no. mr. lawler. >> yes, the price of crude does impact -- >> just yes or no, mr. worth? >> yes. >> mr. monkrief. >> yes. >> mr. woods. >> yes. >> mr. sheffield. >> yes. >> ms. watkins. >> yes. >> but looking back at this chart, the same doesn't seem to apply on the downside. and that's why we want to understand this better, because the consumer isn't seeing the benefit at the pump. so what i want to understand is what it is that your companies can and should do and what congress can do to incentivize
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action so we can alleviate the pain at the pump for our constituents. global demand has been rebounding nearly a year and projected to exceed two dozen '19 levels this year, the demand is there but we still haven't reached prepandemic levels of production and while i understand you simply cannot flip a switch or turn on a spigot we must be honest about the main reason some companies are choosing to ramp up production slowly. a survey of oil company executives by the dallas federal reserve found that nearly 60% of oil companies are restraining growth because of investment pressure. that same survey also found that for large firms like the ones you all sitting before us today, the price needed to turn a profit on a new well is somewhere around $50 a barrel on average, roughly half the current trading price per
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barrel. mr. monkrief let's start with you, you stated december 21st, 2021, investor call, that devon can officially sustain production at an ultra low wti, break even funding level of about $30 a barrel. is that still approximately your break even point? >> yes, it is. it's slightly higher than that with the inflation we've seen but pretty close. yes. >> mr. woods, on february first, 2022, you stated on a call with investors that exon's break even price for a barrel of brent crude is $41 per barrel and expected to average $35 a barrel between now and 2027, is that accurate. >> for the projects that were developing, that's accurate. >> mr. lawler, the guidance you gave investors for the second half of last year was that your break even price was about $45
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around a barrel for oil, is that still your break-even point? >> that sounds about correct, yes. >> mr. worth, your cfo told investors your break-even was around $50 a barrel to cover capitol expenditures and dividend, what is the break-even just to cover your costs without the dividend? >> our dividend congresswoman is about $10 billion a year. that is divide by our production of about a billion dollars it would be about $10 less than that. >> ms. watkins, your company's break-even is about $30 a barrel, correct? >> yes. >> mr. sheffield your break-even around $30, as well, correct? >> yes, that's correct. >> so my friends, the price of oil today was $96 for wti and
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$101.51 for brent crude, given those prices and break-even costs it's no surprise the oil and gas industry is suspected to collect a wind fall of $126 billion in 2022 alone. and while you break even at as low as $30 per and selling above $100, the oil industry is also taking subsidies for the american tax payer which are meant for struggling industries to stay afloat. with margins like this it's not clear to me you all are getting tax subsidies and tax payers are paying for it at the pump. so i'll leave it with that and yield back. >> i thank the gentle lady. chair now recognizes mr. bushan five minutes . >> thank you, madam chair, i want to say this. we are in a free market economy with publicly held companies that millions and millions of
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americans have as part of their portfolio and retirement accounts so i think we need to remember that, you know, this is a free market economy. and sometimes, i think some of my colleagues forget that. today, my constituents are paying record high gas prices, in evansville last month, unleaded gas, over $4 while geesal over $5 a gallon. while putin's invasion on ukraine undoubtedly had impact on the prices, republican members of this committee have been sounding the alarm on rising fuel and energy costs for months. in fact, since january of 2021, because that's when it really took off. we've been sounding the alarm on rising fuel and energy costs well before the invasion of ukraine. yet, today, my colleagues on the
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other side of the aisle are calling on the their usual play, it's price gouging, let's be clear, in my view this isn't remotely close to to why people can't afford to fill up their cars. it's been policies of the biden administration toward energy producers that helped to drive up prices in the last year. instead of looking how to reverse course on these policies we revert to the ftc which has never shown that price gouging is the main culprit for decades, every time it's been approached to study this. not only are these misguided policies emptying out wallets of my constituents, they're also threatening my national security. as we should be learning from european allies those misguided energy policies have given significant leverage to putin and must prioritize energy security as a matter of national security. it just baffles me why the biden administration continues to
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pursue policies that domestic energy producers weaken the position of allies and ultimately place in the hands of adversarial states around the world who seek to weaponize access to energy, we must get back to american energy dominance. general mcmaster, you mention authorities use their power over energy supplies to coerce opponents. the biden administration in my view is playing right into russia's hands by pursuing restrictive energy policies and negotiating with dictators in venezuela rather than producing american energy and getting our country back to prebiden administration energy dominance where we were net exporters then and some of this may be ground covered but general, can you explain what is at stake if the united states continues down this road and becomes irreversibly dependent on adversaries like russia and iran to meet energy needs?
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>> congressman, thank you, we all live and learn. i'm hoping the biden administration, all of us will learn from russia's use of energy for coercive purposes, should learn, obviously, our lesson in terms of investing in our own production and export which can help satisfy global ghand in a way that is to our benefit in terms of security and prosperity and prosperity in the world broadly but as you're alluding to the danger of becoming overreliant on supply chains that go through china, especially those connected to renewables. renewables associated with, you know, with solar and wind power and the hardware and equipment but also the manufacturing of electric cars and the batteries that go into them and the magnets that go into them as well as the minerals and various materials. so i think it's, and by the way, the oil that goes into them. every electric car is about 1/3
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made out of petroleum products so i think it's important for us to recognize an opportunity and i don't want to lay blame on anyone at this stage. as long as we learn our lesson and change the policies, we relax the regulations and permitting and be able to take advantage of the great promise of natural resources here and american innovation and ingenuity. >> i'm particularly concerned about china's strong position in the renewables market as you just mentioned, especially as we have a rush to green energy agenda while still discouraging mining of critical minerals and energy production in the united states. so i think you did touch on this, by pursuing this, without shoring up domestic mining and processing capabilities, particularly for our battery situation, are we simply going to create dependence on china for renewables that will echo dependency on middle eastern oil in the 1970s .
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>> congressman, i think that's exactly the danger, there has been good work done on this at the hudson institute, that shows how vulnerable we are to these supply chains that are vulnerable because they're overly dependent on china. >> i'm out of time so i yield back. >> thank the gentleman, chair recognizes mr. carnus five minutes. >> thank you, it's interesting that some people say we're rushing to green energy when it's been talked about seriously from the president's level, congress, and along all the analysts along the world for decades now. all of a sudden it's a rush to energy, i find that quite interesting. when it comes to clean energy, today the united states is the world's leading producer of oil and natural gas and this is undoubtedly brought our country numerous economic benefits including job creation, opportunities and trade, global competitiveness, nonetheless, russia's invasion of ukraine shined a light on how interconnected we are globally and i commend all the
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individuals in our countries, and heads of corporations for removing their operations, terminating operations with russia and i think it's important everybody understands of course we stand with ukrainian people and all peoples around the world who have been invaded by other countries and being decimated and atrocities occurring upon them. mr. monkery, prior to the crisis at the pump, how have you worked on the transition to clean energy domestically? >> thank you for the question. our fundamental business is producing crude oil and natural gas production. the best thing we can do is be a strong, healthy company. we continue to explore new ways in the energy transition. we've actually made some investments along the lines of venture capital to develop some realtime emissions monitoring, things like that. so it's something we're continuing to look at, look for opportunities. the reality is, sir, these are
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very low-return projects and we have to be mindful of that. over a decade of challenging -- >> yes, thank you. and i understand you have a legal and fiduciary responsible to your shareholders first and foremost as an executive, i understand that and thank you for your frankness about talking about where profits interject in your decisions on how much clean energy investments your company is going to make, that's not a criticism just an honest observation. mr. worth, as why work toward meeting energy independence, we can't ignore the on going crisis that is climate change which we know is a serious threat to our planet, national security, economic prosperity and the future of our people. on monday, the united nations interdevelopmental panel on climate change released a report on climate change which indicates global emissions have never been higher and we're on a pathway to nearly doubling the 1.5 degree limit that was agreed
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upon in 2015 in the paris climate agreement. with the current emissions trajectory, sciences forecast extreme climate change, unprecedented disaster and a world that is uninhabitable, as u.s. shifts to increase energy independence, what steps are you each taking to prioritize the transition to cleaner, more sustainable energy to reduce ghd emissions? >> congressman, thank you for the question and thank you for your genuine appreciation for the contributions that this industry makes to american competitiveness and our economy and the responsibilities a to the leaders of these companies do have. our strategy is to decarbonize our existing business by reducing the emissions intensity of the oil and gas that we produce and the world still consumes and continuing to reduce that co2 intensity over time while the world is using traditional sources of energy
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and then to invest in new lower carbon forms of energy at the same time, in three areas, renewable fuels, hydrogen and carbon capture and storage. this year, will spend nearly $4 billion on renewable fuels alone and have many projects we're working on developing in the areas of hydrogen, carbon capture and storage and other technologies. >> thank you, my time is limited and i'd like to also point out that without the respect the $4 billion you mention in investment, that's good, yet at the same time it was mentioned earlier some of your earnings, quarterly earnings are in upwards of 10 billion in one quarter so it's all relative as well, and i heard earlier, that it's about making sure your bottom dollar is met as well so maybe what we can see to the biggest country in the world when it comes to producing oil and fossil fuel production, maybe if we can get a little bit more aggressive and maybe be a better competitive to china so those economic forecasts don't play out if we're going to end
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up at the behest of china in the future, we all have a part to play. american industry is at the pump every single day in front of our folks like in california, prices have hit above $5.90 a gallon and all have a role to play in making sure we can do what we can to give some relief to the american consumer, the american families and american people. so with that, my time's expired, i yield back, madam chair. >> i thank the gentlemen. chair now recognizes mr. robert for five minutes. >> thank you, madam chair. the title of this hearing today attempts, i believe, to skirt blame away from what i hope we all know, that despite recent statements, the biden administration's policies have always and will continue to push us away from energy security in favor of unrealistic climate goals, first day in office, order revoking the cross border
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permit for key stone pipeline, my colleagues pointed out the long list of policies implemented since that time, whether it's the unrealistic cafe standards, recent fcc rules or on going threats to existing pipe lines like line five in michigan, all create inhospitalble environment for energy investment. meanwhile, constituents are suffering. recently, a constituent wrote to me, not far from my personal home, saying that someone had drilled a hole in their truck's gas tank overnight and stolen their gas. this is the environment that biden's inflation and president biden's energy policies have created. it could get worse. clearly, something needs to change. so gentlemen master, just a few months ago, sir, there were reports that the biden administration was actively
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exploring the possibility of terminating the line 5 pipeline in michigan, a u.s. canada pipeline which brings crude oil and natural gas to canada and our state and states across the midwest. doing so would cost thousands of jobs and further raise already record high costs for energy for michiganders, what message does the biden administration send both at home and abroad when they talk about closer cross-border pipe lines? >> congressman, i think the message is we're continuing to pursue nonsolutions and i think this shows a high degree of strategic incompetence. it's important for us to reduce carbon emissions. it's important for us to remove rapidly toward renewables and zero emission sources of energy, but we have to also recognize the global energy demand is going to go up 45%, you know, by the middle of the century. so it's important for us to undertake a range of actions to
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ensure our energy security and ensure the prosperity for future generations and, you know, canceling pipelines, this is a nonsolution, it makes no sense. because this is a way to move energy in a way that's much safer, more ecologically friendly and again i think there's a certain kind of ideology that drives a lot of this decision making and reveals that we're not displaying the degree of competence necessary to address these interconnected problems of energy security, national security, and carbon emissions. >> it pushes back against opec and russia's control of the gloenl energy market itself, doesn't it? >> yes, it does, especially if these pipelines can lead to export terminals that allow us to alleviate the supply restraints in the global energy market. >> thank you. ms. watkins, mr. woods and mr.
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lawler, line five services some of your refineries and i've been at some of those refineries. closing the pipeline, line five pipeline would mean thousands of additional trucks on the road, rail cars, tankers on the tracks, going through our communities, creating safety hazards and more emissions, actually, rather than a pipeline. do you agree that pipelines are the safest and most efficient way to transport fuel, ms. watkins? >> yes, sir. >> mr. woods. >> yes. >> mr. lawler? >> when properly maintained, absolutely. >> and that is key. properly maintained and the line five in fact is more than properly maintained, they're attempting to dig a tunnel underneath the great lakes to totally encase it, keep it protects from any type of damage to bring it across.
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so the fact that we can't and it would be great to have had our energy secretary here before we all talked today, so we could ask those questions in the context of what it's doing in your industry. i appreciate your answers and with that, i yield back. >> chair now recognizes ms. kelly for five minutes. >> thank you, madam chair for holding this important hearing. i want to start by thanking general mcmaster for his service to our country and appearing for a witness today, however my questions are directed at the oil company executives who are before us today because my constituents want to know why they're paying outrageous prices to fill their cars up. they want to know why your companies, whose crude oil makes up some 60% of the price of
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gallon for gasoline are not doing anything for prices of the pump going through the roof. you all talked extensively about your companies and the global nature of oil prices that really aren't in your control. certainly, i understand how there are things that can affect prices in ways that are out of your control. one of the things seems to be opec and opec plus. mr. woods, can you or one of your colleagues explain how opec affects prices on global markets? >> as we've talked about today, congresswoman, the main driver of price is the imbalance between supply and demand, and opec is basically gets together and decides on production and therefore supply in the market place which will then translate into that balance and then pricing. >> thank you, so it sounds like opec sets targets for production that have an impact on price. they restrict output and prices
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climb but i've also heard today how you and your companies are independently deciding not to invest in new supply or produce more to return value to the shareholder, so you don't control price but you do manage, or manipulate supply to restrict the amount of product on the market relative to rising demand we are experiencing. and you do that to create scarcity which in turn, drives up prices for that product. and of course, that's what creates value to the shareholder. so i guess my question for anyone that wants to take this, isn't that exactly what opec and its affiliates have been doing to the detriment of the american people and the economy since the oil shocks of the 1970s? how is your behavior any different than that of opec if anyone wants to answer. >> congresswoman, i would say you mischaracterize the approach the industry takes in general, particularly the approach exon mobile has taken, through 2017
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through 2021, have been extremely committed to improving production, increasing supply, and making sure that energy su sure that energy remains available and affordable for people all around the world. in fact, we did the hard things. when we weren't making money we continued to invest to ensure that the products that were going to be needed for additional supply from available and are now producing. last year was 25% than before the permit. our oil -- is at the highest it has been this year than it has been for 15 years. this company has been working to make sure we are making the investments and thinking about the impact on people all around the world, including the consumers here who are struggling with high prices to make sure that products are available to immediate their needs reliably. >> i am glad to hear that you are trying to do something, but,
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again, more needs to be done. and the other thing is, if the oil -- if the price of oil set by global markets the american people want to know why we should continue to shower your incredibly profitable companies with special tax breaks and subsidies if you aren't working in the interests of american consumers. oil companies like some of those testifying today get drilling tax breaks, percentage depletion allowance, tax deductions for tertiary injectant expensed, tax credits for producing oil and gas from marginal wells, tax deductions for income attributable to domestic production activities for oil and gas. and 70-year amortization periods for geological and geographical expenditures f. these tax breaks are not being used to increase
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supply and lower price for american consumers then it is time to consider whether tax dollars should just be padding our company's profits. thank you, i yield back. >> the chair now recognizes mr. mullen for five minutes. >> thank you madam chair. i appreciate all the witnesses being here today, and understand the difficulties that you face as a business. and so i kind of want to start with mr. man reef w the onset of the pandemic in march 2020 we saw the global demand for oil drop and the price plummet. we are finally seeing the demand rise to prepandemic levels. can you explain the process of ramping up production to meet these needs? >> the process of ramping up production is you need to go out asked secure services, you need to make sure you have manpower, you need to make sure you have infrastructure and all the permits.
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and that is something that here at devin we have been doing. so if you look at 2021, we average 14 rigs as we sit her today we are at 19 rigs. so we have been ramping that up. additional ramping takes a lot of considerations. and quite honestly, it is very challenging. you heard some testimony today about the shortage of manpower. we have a tight labor market. we also have tightness in rigs and services, and supply. so something that we really have to think about. but for our company, we are -- we not only increased activity. we are going to be bringing on 300 new wells this year. and that will have ana big implication not only on the back half of '22 but 2023 as well. >> from day won, president biden has been very vocal about being anti-gas and anti-oil. what kind of signals does that send to the industry when you
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are trying to plan your future for your company? >> well, for us, it's -- you know, we really need -- we need to have some dialogue. that's what we have been asking for is dialogue. for instance, congressman, with our company, about 20% of our activity or our acreage, excuse me, is on federal lands. however, 50% of our activity and capital budget is also on federal lands. and the production is corresponding. so we are seeing some ramping of production primarily in southeast new mexico, in lee and netty counties, the two most active counties i believe in the nation. we are seeing good response there. but we have to think about not just getting existing permits -- or new permits for the drill, but as we talked about, we also
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need additional permits. so we have to think about the right ways to get the infrastructure built out and you need to think about the long haul pipes getting to the market. >> thank you, sir. general mcmaster, many of our allies in europe are reliant on energy from ruggs w. russia waging war on ukraine is it evident now more than ever that europe needs energy from the united states? would you agree that energy independence creates global stabilization? >> absolutely, congressman. i don't know how else to say it. i mean, yes. yes. >> are there any geopolitical vulnerabilities from importing oil from venezuela, iran, and russia? >> absolutely, because we know it is the atm of oil exports that allows those oppressive regimes to stay ini power, to keep in place their criminalized
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governments. it is the income from the oil exports that allows them to continue their proxy war against the great satan, us, their arab neighbors, and against israel. >> president biden is pushing us away from fossil fuels. can you explain how this plays into the hands of communist china? >> well, it plays into the hands of china because we cannot meet global energy demands without the u.s. being really a major player in the global energy market in the area of hydrocarbons and i would say natural gas in particular. but then also, trying to jump ahead to renewables before renewables are economically viable in terms of developing economies puts china in a position of control where china can restrict access to renewable sources of energy and gain coercive power us that is reminiscent of u.s. dependency on middle eastern oil in the
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1970s. >> which brings me to the point i bring up all the time, american energy independence brings global stabilization. i had an opportunity to visit with a lot of our allies around the world. and they will tell you the same thing. they would rather buy oil from a friendly oil like ours than be dependent on buying from a country they know would rather take them down than see them succeed. once again, global stabilization happens when we have energy independence for america. i yield back. >> the chair recognizes mr. mckeep a.m. for five minutes. >> thank you, madam chair. appreciate the opportunity to be with you today. i would like to start off by disabusing the american people about myths a. lot has been said about the keystone pipeline. the reality is that it would not be operational until at least next year. the notion that that's how
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adversely affecting the price of oil and the price of gas at the bump is to me to be somewhat mystifying how someone can look at the american people in the eye and make that argument. what is more on keystone xl was essentially a canadian export pipeline designed to take canadian oil to foreign markets. canadian officials have said just as much. let me get to another myth that is going around the capitol, this notion if we were to create a federal tax holiday somehow the american people would feel it in their pocketbook. i would like to ask each of the major producer here starting with mr. lawler, if we decide to suspend the federal gas price, are you prepared to reduce the wholesale price of gasoline by that 18.5 septsds, sir? >> i can't commit to that again today. >> i appreciate that. how about you mr. riff?
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>> congressman, the way the market is we collect that tax on behalf of the government and submit it to the government. if it were suspended we would no longer collect it and would be passed through to the marketplace. >> your wholesale -- >> we add the tax onto our wholesale price of gasoline. if the tax were suspended we would no longer add that on. >> thank you, sir. how about mr. woods with exxon? >> the wholesale gasoline market is set by supply and demand levels. we don't set the price on that. as mr. worth said, depending on how that market translatesed in the supply and demand affects the price it would set the fries. >> the 18.5 cents wouldn't number the price? >> would not be in the price. >> that's not my question.
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if we declare a federal tax holiday is your pleiss price going to go down 18.3 cents. >> we don't set the wholesale price. that's set by wholesale demand. we won't collect the tax, but then the market will set the price for the underlying fuel. >> all right. i appreciate that. let's see. ms. watkins. how about shell. what will shell do if we declare a federal tax holiday of 18.5 cents. congressman, we are in a similar situation. we will no longer collect the federal tax. the price of gasoline will be set in the marketplace. and it is based on supply and demand. >> let me see if i have got this right. either one of the four that just spoke can correct me, please. what you are saying is that supply and demand is setting the price of wholesale gasoline, which obviously gets translated to retail, and ultimately to what my constituents pay for
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gasoline. so the 18.3 cents that we charge for a federal tax holiday really isn't affecting anything? other than the government's collecting some revenue? it is not affecting supply and demand? it is not affecting the price at the pump. is that correct? >> congressman, it is added to the price at which the wholesale gasoline is sold through the value chain. if it is is spended, that component leaves the equation. the rest of the dynamics remain in the marketplace as they do every day. >> so there is no promise this is a closed captioning test. this is a closed captioning test. this is a closed captioning test. this is a closed captioning test. this is a closed captioning test. do is disabuse the american public of this myth of if we do something like declare a federal tax holiday that the price of gasoline will go down. we don't know what will happen is what you are all saying
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because of the mysteries of supply and demand and this and that could have the wholesale price go up, sideways or just about any direction. madam chair, i appreciate this opportunity. let me say this. i think our solution ultimately ought to be we just need to give direct payments to the american people during this emergency so they have extra money to pay for gasoline that would be my solution. i have said as much as on the record. i have said as much to leadership. i look forward to the continuing of this discussion and i yield back the balance of my time. >> i thank the gentleman. the chair is now pleased to recognize mr. carter for five minutes. >> thank you madam chair and thank you for allowing me to waive onto this committee and thank all the witnesses for being here. what i have behind me is a charlotte of receipts that i have asked constituents of my district to send in to us. what you will see here, first of all, there is an $80 to fill up a tank, $80 receipt to fill up a tank in brunswick, gentleman.
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$135 in weight cross georgia. one constituent pointed out they spent $334 just last month on gas. behind each of these receipts is a story. sam is having to cancel his veterans affairs appointment because he can't afford to get there. kayla summarized the pressure facing the working class americans by saying, and i quote, i can't afford to go to work. but i also cannot afford not to go to work. unquote. we are forcing our seniors, our single parents, and our veterans to choose between groceries and gas. between a regular paycheck and regular fuel. it all comes down to the biden administration's refusal to recognize reality and instead rage wear a war on fossil fuels. i for one do not believe any of these assertions that have been made here, that it is putin's fault or that it is the big oil companies simply gouging the prices here. that is not what it is.
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this was happening before vladimir putin, his unprovoked invasion of ukraine. it has happened since the policies of this administration started taking place. general mcmaster, i want to ask you something. ukraine in theeio graphical area that they are in, they have the second biggest known gas reserves. they also have a lot of natural gas. in your written testimony, general mcmaster, you said russian military incursions have focused on the 10% of ukrainian territory that is home to 90% of their energy. look, vladimir putin is evil. he is the devil himself. however, he ain't dumb. he knows what he's doing here. general mcmaster, i want to ask you, can you elaborate more on the notion that russia is weaponizing energy against the free world. >> congressman putin has been
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engaged in this behavior for quite some time, weaponized energy against moldova, gull bulgaria, romania, now against ukraine and europe prodbly and germany in particular to soften or weaken our resolve in connection with the response to this brutal invasion of ukraine. he wants more of it. he wants to gain more and more access to oil reserves. in eastern ukraine where he can focusing this offensive and what one analyst called the ukraine heist associated with what russia is trying to do in the donbas region in particular. he has done the same thing in syria n. february of 2018 russian mercenaries attacked u.s. supported syrian forces in the euphrates river valley. they were going after the conoco oil facility because putin knew he didn't have the money he needed to help reconstruct the country he helped to rubble in syria. you see the same kind of adventurism in eastern libya for
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example, on the part of the russians. putin is trying to gain more coercive power, not less over the global economy through his control of hydrocarbon exports. it is in our interests to make sure he can't do that. >> let me ask you this general, because during the time, the week of the invasion of ukraine, i along with two other members this committee representative walberg and representative curtis as members of the conservative climate caucus we were in brussels, we were in europe when this happened. we were there to look at what europe has been doing in the way of clean energy. and it became very obvious to us that europe has jumped the gun too much. and that they have -- they have closed down for instance -- they have shut down some of their nuclear plants. it is an important lesson i think for us to learn here in america. would you say it is realistic to imagine that europe or the rest
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of the world could become energy independence of russia on renewables alone in the very knew future? >> in, that's impossible, especially if you take nuclear out of the equation, which germany did zw as well. sadly, my home state of california is shutting down a nuclear plant that generates 10% of the states electricity. it makes no sense to do that -- >> general, i'm sorry. one final thing. the american oil industry we can help with natural gas. is that not true? we could help europe here? >> that's absolutely correct. this is a solution that is important for energy as a result of the constraints on the gas market. so we need to export more gas and not only because it makes sense in terms of economic sense and in terms of energy security, also make sense in terms of climate and to reductions and getting off
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people and bridging off into cleaner forms of energy. >> and all by the way, natural gas in america is cleaner than russian gas. correct? >> absolutely. senator kramer and i penned a, a long piece on this are long essay on this and maybe a policy solution of this can help incentivize cleaner extraction transport of natural gas. consistent of what we do in america. >> good, thank you general mcmaster. i yield back, madam chair thank you. >> i think that gentlemen, share now recognizes miss clark for five minutes. >> i think the chairwoman for convening this very critical oversight hearing on big oil. and they gouging at the gas station. it is very clear to most americans a big oil, shameless profiteering is taking place. at the expense of the people end of our planet. at a time when democracy and democratic values are a threat,
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the people of ukraine are being massacred. and the american people are suffering due to a historic fight in gas prices, emerging from once in a century pandemic. there are companies are making a record profit. nobody is more impacted by your actions then the low income and working class communities who spent the highest amount of their income on transportation and basic goods. just to get by, these communities are suffering, they were suffering long before this current crisis. and now they are crying out for our help. and what is your response? you are enriching, your investors with stock buybacks. and dividends and lining your own pockets of millions after millions in additional executive compensation.
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many of my republican colleagues here in congress, i believe that your company as well are trying to take advantage of this moment as an excuse to push for more oil and gas permits unless environmental regulation. this is not the first time that you have done this. you say we need to drill our way out of this crisis. you say, we need to hurry and approve more gas leases and more drilling permits and build more pipelines. but in fact, the very opposite is true. we have been trying to drill our way towards energy security for decades. we currently have more drilling permits and leases then your companies are even using. but no amount of drilling can change the fact that oil is an unstable global commodity that is completely out of our control.
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today, it's putin's illegal war that has shocked the market and initially sent prices soaring. tomorrow, it will be something else. and no amount of drilling is going to change this basic underlying reality that oil and gas are finite resources. in the marketplace that is largely controlled by dictators and autocrats. let's also try to remember that the extraction and use of this fossil fuel as pushing ott planted on the very brink. of climate disaster and it's already destroying the lies and livelihoods of people of color. black and brown communities across the globe. now is not the time to drill more. and now is not the try to finally wake up to the reality that the only way out of this crisis and oil future oil
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crises is by investing and renewable energy and green energy workforce at the scale needed to achieve a kareen energy center by the year 2035. today that's acknowledge you to combat the climate crisis creates high paying jobs, and growing the economy all at once. the only thing that we are lacking is federal action to seize this moment and chart a new and bold path forward. this is why i've introduced the american renewable energy act with my friend and colleague, congressman peter wells. this is why we need to immediately renew negotiations for a climate centers, build back better act that will unleash a wave of green energy investment across our nation. before my five minutes are up, i would like to ask you each, each of our executives a yes and no question.
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number one, do you believe that we need a historic investment and renewable energy to combat the climate crisis and and our nations relying on fossil fuels? do you believe that your company should play a key part in this transition? >> though not all speak out once. >> yes, so congressman this is day. we do believe transition is very important. we have moved forward. >> so, is that a yes? >> yes. >> very well, mr. worth well >> congresswoman, i voted that we look to innovation. >> is that a yes sir or a no? >> i believe technology innovations, -- >> okay, it's not a yes or a no. i will take that as a no. >> mr. monte is not a yes or no? >> well, we have a lot of
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challenges. >> i got, it i got it. you are not ready to say yes or no. >> miss clark, your time has expired and we are trying to get everybody to the floor to vote. can we have the votes please? >> very well, let me thank you for once again madam chair i yield back. >> i apologize, thank you. mr. duncan you are recognized for five minutes. >> thank you madam chair, americans know they are paying much more for gasoline today than they were at the end of the trump administration. and they know why because the policies of the biden administration. this hearing is a complete and total reflection by the democrats to distract from the energy crisis that president biden and congressional democrats have created. they're trying to find someone else to blame. do not let them gaslight you, recognized gas prices don't just lay at the feet of vladimir putin or gas companies. just look at the daca tummy of their statement from the fall of 2021 and their attempt to lay brunt blame here today. i will ask this article to be submitted for the record. this is an article dated april
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5th, 2022. and it says that, last autumn they were demanding, house democrats were demanding the same oil and gas produce less oil to reduce the global supply of crew. that was just last fall. during the october 28th hearing, california read it isn't, -- for pledging to reduce their oil production. and then he asked all expects why they were not doing the same. u.s. oil exact's they go on to say that, and his questioning, he said do you commit to do anything matching european counterparts to bring the actual demand of oil production down? democrats are wanted to bring oil production down and now, they are trying to blame somebody else. kind of representing goes on to say that no, are you committed to lowering their production as the paris accord say? yes or no? if progressive truly cleared about climate, they would support him all u.s. oil in -- which could replace some supply from country with loyal
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environmental standards and higher emissions. in fact, california representative, killer porter illuminated this one she chided the ceo for opposing mr. biden's haul on new oil and gas leases on federal land. you cannot have it both way democrats. you cannot come in here and blame or others for the rising prices of gasoline at the pump when last fall, you were also blaming or at least, the dichotomy of that of trying to get the oil and gas companies to produce less. so, the day before putin invaded ukraine, gas prices were already up 55% from before the day biden took office. why? one reason was display by representative, that costly and burdens and read the drive the cross of production up. for a gas producers, in fact he provided these reds that i would like to submit for the
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record madam chair. the rags that are driving the cost of production up for american producers. we saw what president biden candidate said. i think he talked about that but let's just look at it as of why, 2022 budget. developing the budget, consideration was given to advancing three key objectives. one of which was, not funding work that directly subsidize fossil fuels, including work that lowers the cost of production. lowers the cost of consumption, that means lowers the price of the pump for american families. -- that was in joe biden's 2022 budget. you know, america is blessed with abundant natural resources. we are cursed with global politicians who are causing these problems and causing american families to pay more at the pump. crisis was not created by vladimir putin, he is capitalizing on.
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it is capitalizing on it because the nord stream 2 project was greenlight it by president biden in january of last year. not money that vladimir putin sells to europe, oil and gas to their countries and sells natural gas and oil to the united states pats his pocket and up space for his imperialistic aims in ukraine. and elsewhere, he is one of the richest men in the world. so i hope that we will just look at germany. germany should serve as a warning signal in the united states. they sold out a radical environmental ideology and now face an energy crisis. they simultaneously phase out nuclear power in coal and how important or than half of their natural gas from gas farms and other companies. they shut down 14 of their 17 nuclear plants. instead of prioritizing clean burning nuclear energy, germany made a policy decision heavily subsidized volatile and intermittent renewables. now, they're going back. and buying more coal and more coal plants are coming online.
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so a step across e of pushing climate change initiatives and being held out on the wrong has been a leader, and renewables and all of a sudden they say well, we need our so we will bring the coal. usually where believers which i don't think they are. they have been at the mercy of vladimir putin, on and off. you know, you cannot have it both ways. you cannot encourage lower production and then try to blame somebody when the prices go up. i yield. >> gentlemen, time is expired. lady from -- recognized for five minutes. >> thank you, charity gets for calling this important meeting. hearing and also to the witnesses for your testimony today. we have heard repeatedly, americans are paying for gasoline prices, higher than they ever have before. it really underscores the imperative for our country to be energy independent. in my state, the average cost of a gallon of gasoline is hovering above $4. which might not seem like a lot
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to some but it was $2.70 a year ago. and this spike is directly impacting delaware people. i've heard from four tire reads on fixed incomes, veterans, parents who are struggling to pay soaring gas prices. one constituent wrote to me that the cost actually went up by 20% a gallon while he was standing at the pump. we have seen president biden take action. we have seen many states, including delaware state lawmakers and governor carney working on legislation to alleviate some of this burden. and our leaders are planning to get $300 and direct payment to taxpayers to provide some economic relief as delaware continue to struggle with rising prices at the pump. throughout the hearing, we have heard from members of congress, with solutions but i want to talk to you about the solutions that you are focused on and that we can tackle together. we know that gas prices are
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complex and they have lingering economic impacts of the pandemic, global markets, putin's unprovoked war are all factors into the cost. but people are hurting, they want to understand, what is happening? why it's happening? and how we are going to tackle it. they are seeing oil companies break in record profits and want to understand where all of the money is going and why with these record profits, they are paying so much at the pump. oil companies felt the pain of the covid pandemic and as they saw their demand for gas evaporate, then the cares act provided generous bailouts to the oil and gas industries. and now as prices continue to soar, it is time for the industry to step up and help the american people. we need to work together to create more financially secure futures for all americans. we have heard a lot today about the sacrifices that americans are making.
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and i would like to hear about the sacrifices your companies are making now. and i want to be clear that i am asking this and i will just submit the questions for the record in the interest of time because in reading your testimonies, man if you talk about the things that you've supported in the past. and the things that you will do in the future. but people are hurting right now and i would like to hear from each of, you your commitments. i will submit that madam chairwoman for the record. but specifically, mr. muncrief in a recent interview, you highlighted your promise to be more disciplined to get cash back to shareholders with dividends and you ask yourself the question, is whether you are going to keep your promise or, whether you are going to be patriotic? mr. muncrief is your company willing to forego getting cash back to shareholders and order to ease their burden americans are feeling at the pump? hareholder s in order to congresswoman, thank you for that question. the last decade our company has
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spent 100 and 10% of its operating cash flow we took on debt, and still issued new shares. that put us in a position to be where we are today. a healthy company, as i mentioned earlier we are increasing our production, we are adding 14 rigs from 19 rigs. we have 300 new wells added this year. we are doing a lot. we also are going to take care of our shareholders. those are the shareholders who have stuck with us all these years, when we weren't profitable. we are finally turning a profit, we are not going to forget them. he would be hard-pressed to find a more patriotic industry, i think, then the united states oil and gas companies. >> as a follow-up, given putin's tragic invasion of ukraine do you still believe that returning cash to shareholders is your top priority? >> we have several priorities,
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returning cash to our shareholders is absolutely one of our top priorities, yes. >> okay, you answer the question. in your testimony you mention that even with constraints devin's net income reached a new high. supply chain issues and shortage of new workers are preventing you from new working oil rigs. your company works to maintain a low investment ratio. it's preventing you from increasing production capacity? >> no, i think the most important thing for us is adding additional capacity. >> i've run out of time, it's just a yes or no. >> excuse me, could you repeat the question? >> we will submit it for the record. again, thank you madam chair for your leadership. i thank you for the focus on our constituents, as well as their consumers. i yield back. >> i think the gentlelady.
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the chair will announce there are two votes on the floor at this moment. we are going to be in recess, but for ten minutes. i would like to call this
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meeting back to order. i would like to recognize the gentlewoman from arizona, miss lesko for her five minutes. >> thank you madam chair. thank you for the people testifying today. on this chart hopefully with the camera can zoom in a little bit, on this chart it clearly shows how the prices of gasoline have gone up iverson's president biden took office. the democrats took control of both the u.s. house of representatives and the senate. in arizona prices are even higher than this. gasoline prices in arizona are $4.65 a gallon, on average. in fact arizona has one of the highest, if not the highest inflation rate in the entire country. and so, general mcmaster i have a question for you. do you think it is a
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coincidence that gas prices started down here when trump left office and they have continually gone up, even though the strategic oil reserves through the oil -- war in ukraine. now they are way up here, do you think that is a current students? do you think it's partially at least because of the biden, democratic policies and their war against american oil and gas? >> congresswoman, it is not a coincidence. as you alluded to there is a number of factors at play but it is not a coincidence. >> i totally agree with you. that is why i call on president biden and my democratic colleagues to increase production of american oil and gas. i also think it is really interesting that biden, when asked, one of his answers to the high price of gas was, by
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an electric car. well first of all, electric cars are very expensive! not everybody can afford one. electric cars, and renewable energy require a lot of critical minerals. a lot of those critical minerals are actually processed in china. so, for instance, wind turbines, solar panels, they all require critical materials. electric cars require four times the amount of copper then do a standard car. yet president biden has closed down minds. there is a mine in arizona called resolution copper mine. under the trump administration it was given the greenlight to go ahead and continue mining. when biden was in office after two months, he closed it down.
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they couldn't mine! i went to visit there and that mine would produce 25% of all of the copper that is consumed in the united states, including for electric vehicles. i guess what i'm trying to say is the policies that president biden and the democrats have are hurting america. they are causing the prices to go up. the other thing that i find very interesting is recently, i was able to speak to former secretary of state pompeo. he was at a meeting, and he expressed how whenever he went to meetings with foreign countries he would use u.s. energy dominance, u.s. energy as a negotiating tool when
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dealing with foreign countries. general mcmaster, do you believe that the biden and democrats war against u.s. war and gas, and their war on u.s. domestic mining hurts our national security? >> congresswoman, we have to do everything we can to increase energy security. as you already mentioned, make up for that complacency in the area of mining and access to minerals that are critical to the emerging global economy and the energy transition. i agree with your broad point that we are behind, we have to make up for lost ground, much of it self inflicted. >> and i totally agree with you general mcmaster's. let's hope that the american people will realize that the democratic policies are hurting america and they are hurting american pocketbooks, with that i yield back. >> chair now recognizes miss
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paragon for five minutes. >> thank you madam chairwoman for holding this meeting on -- to hold the fossil fuel executives to take advantage of this war on ukraine to pad their pockets and take advantage of the american people. mr. worth public information shows that your conversation went from $29 million in 2020, to 33 million in 2021. is that accurate? does that sound accurate? >> the years are not accurate -- >> okay, but you gotta have 4 million dollar increase, does that sound about right? >> now, my pay went down in 2021. >> okay, do you have any idea what that was? >> that will be released in a proxy statement. >> okay, we have some information that is publicly available that shows you may 29 million in 2020, 31 million in
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2021. mr. wood, exxon the public information that i have says that you went from 16 million dollar in 2020, to 23.5 million in 2021. bp executive it looks like you're paid doubled from -- 2021, and the shell ceo made a 25% increase from 2020 to 2021. why is this important? because the american people are not getting a 4 million dollar raise. they are happy because their pay didn't double! what is happening is, they are feeling the pinch! they are feeling the pressure at the gas pump. they are asking, why is gas so high? that is what this hearing is about today? it's about asking, what is going on? big oil is lining their pockets with one hand and taking billions in taxpayer subsidies with the other. the american people are getting ripped off! these companies choose to keep
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production low so their profits can remain high. people are hurting, that is what they want an answer to. mr. sheffield, on a yes or no, do higher oil prices mean higher dividends for your share holders? >> yes. >> mr. mawn chris is that also true for you? do you agree with that? >> yes,. >> do you both of your companies offer variable dividends for those watching that means, your payment as a shareholder goes up when earnings are high, goes down on earnings are low? >> that is correct. >> yes. >> thank, you madam chair i would like to enter into a record an article on the little evidence from barons magazine, a financial magazine entitled energy is not on board.
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oil companies use a variable dividend to pay back more to their shareholders when oil prices are high and less when they are low. this article goes on to highlight he companies bragging about rapidly rising divisions, as profits come in from increased prices. a dividend of windfall profits here investors tied to the price of oil leaves a lot of room for exploitation. every company here is doing this in their own way. stock buybacks, ceo raises dividends, all of you are taking advantage of an oil subsidy. you have benefited in different ways from the cares act. this was the first coronavirus relief bill passed to help communities respond to the pandemic. for example, devin energy received 100 and $5 million from the care acts tax benefit. fossil fuels company received tens of billions of dollars in subsidized loans and tax writeoffs during the covid relief period. now the times are good for you, there is no return to the
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taxpayer. eturn tinstead americans are geg couched at the pump. we need a dividend for the american people. that is why i support the windfall profit tax. big oil windfall profit tax. to send big oils windfall directly back to the american people, to a quarterly dividend. congress took the step in 1980 in response to the opec oil embargo. we should do this again to provide relief to the american people. what is happening to them is not right. we need you to do your part, making sure that we are helping the american people. with that madam chairwoman, i yield back. >> i think the gentlelady. the chair now recognizes mr. pence for five minutes. >> thank you chairwoman degette and ranking member griffith for allowing me to join this committee today and thank you to the references for being here. petroleum is the lifeblood of
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our economy. let me say that again, petroleum is the lifeblood of our economy. today this hearing is an attempt by the biden administration and the democrats to help the chinese bleed us out of energy independence. with a background in the petroleum distribution business i can tell you, firsthand, that the misleading title of today's hearing does not reflect the reality of the domestic oil markets. as a national director of fuels for circle k i knew what the price of petroleum products from wholesale, retail, were based on a variety of factors across the value chain. our witnesses have discussed this today. wrongly accusing oil companies of price gouging is only meant to cover up this administration's own anti fossil fuel agenda, and my peers on this side of the aisle
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have pointed out, numerous times today. at every turn in the biden administration and my friends across the aisle want to make it harder to produce, distribute, and use fossil fuel for their chinese electrification agenda. for the hoosiers watching at home, that means higher gas prices, higher utility bills, and less energy security. the situation in ukraine tragically has compounded the presidents energy crisis. make no mistake, this problem started long before the beginning of march 2022 house democrats have been pushing complex equation for a green economy that is totally unattainable. can't get it done even if they want to get it done. that is why the build back better backed off. this administration has been creating regulatory uncertainty and investment pressure on financing fossil fuel projects that have squeezed oil
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companies fueling the volatile energy markets we see today. the president needs to reverse course, put our country back on a path towards long term, durable energy independence. by accusing the oil companies of price gouging now, it will only be a matter of time -- listen up america! before the argument is pushed to the health care industry, manufacturing sector, farmers and the rest of the economy! they want everyone to be accused of price gouging to cover up their inflation. price gouging cannot be a catchall response to inflation and an overwhelmingly regulatory environment that just keeps piling up, every single day! the only answer coming from this administration has been a misguided use of our strategic petroleum reserve to lower gas prices. and of course, this hearing. looking at the past two emergency strategic petroleum
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reserve releases we have failed to see meaningful effect on the pup for my hoosiers in my district. general mcmaster. what is the purpose of this? sorry, i hadn't made. the purpose of what? >> what is the purpose of the strategic petroleum reserve? >> well obviously, it's a reserve that is meant mainly for wartime into ensure that if there was an interruption in supply, that we can compensate for that. and that we will not intel national security risk associated with the supply constraint. >> okay thank you general, you and i both know the president's release was not announce in response to a supply disruption or a war. yet, we will go down to 40% of what is in their. the average price was below $30
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and now, i guess they will replace it around $100. if we are serious about lowering prices at the pump. when we be relying on this grow to stabilize energy markets and lower prices? does that help rallies think 1 million barrels a day? >> why 40 other witnesses on this, i would say it has a lot to do with obviously the supply and the building. >> mr. word, can you comment on my question? is this going to infect lowering pricing and stabilizing the market? >> congressman, in the short term i can send a signal that suggests there is more supply available, it's not a long term solution to the challenge. >> thank you sir, doesn't seem to be doing that three weeks ago. the price was about the same as it is today. thank you madam chair, i yield back. >> i think that gentlemen, turnout recognizes mr. soto for five minutes. >> thank you madam chair, the pandemic, the war in ukraine,
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record oil profits. add them all up and we see record prices at the pump for so many americans. but especially with record profits and record prices. americans are understandably angry. of course the republican colleagues talk a big game but fail to admit the role in this. there are public and must of the pandemic response. covid ran rapid. the economy creator and demand and production for oil nosedived. it still has not recovered. add in the cozy relationship of some house republicans with russia. voting against military aid for ukraine. voting against sanctions and that conclusion is clear. our republican colleagues are plenty of blame here today. but when little prices were down because of covid-19, the federal government came to your aid. with the cares act and american
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rescue plan. with tax relief and subsidies. many of which were supported by bipartisan majorities here. and now we get back to normal with the pandemic and supply chains are improving but slowly. and asked of the war in ukraine, we stand steadfast with ukrainians against this violent russian invasion. this also take some time. and in the face of these challenges, and the time of our greatest need, what did oil companies do? they do increase supply to keep places affordable? did you step up for us? for your country? for the american people? no, it kept production nearly the same and watch record profits role in. i get, it you had a bad 2020. you try to make up in 2021. we are in 2022. there should be no more excuses for record profits that are made on the misery of our nation. record profits for executive salaries, bonuses and fancy
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offices. record profits for the sake of your investors. you could see it right here, and this chart, meanwhile in central florida. family suffer. let me make it clear. we stand on the side of the american people. the irony is, this green maybe you're on doing. because of you, americans get it. we understand we need to transition to electric cars as soon as possible. they think about it, every time they see a tesla, and electric f150 or a chevy volt driving down i-four, anything when i still paying for gas? this is why the senate must pass the 500 billion dollar climate change investments. if this house already passed earlier this year. but in the short term, turning back oil itself is at 103 today and the u.s.. for a barrel, back in march 1st, we saw when oil prices were around $100. gas prices were $3.60. $3.70 and central florida.
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i had my staff check today. and custom-y, gases that $4.11. 40 to 50's cents higher than it was when gas was around this level, just a few months ago. during world war ii, your company stepped up from 1940 to 1945. overall, u.s. oil production increased by 30%. president biden has done his part by ordering a release of 1 million gallons, excuse me barrels per day for the next six months. so my question to all of you is, will you step up? will you increase production and commit to increasing production and for how much during april? so, first mr. wood thank you for being here. will you commit to increasing production during april and for how much are you willing to commit? >> we are producing production. increasing production, in fact we started that effort several years ago and continue our investments through the pandemic when we were losing
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money and that investment is now began to pay off. >> thank you. my timing is limited. we appreciate you all stepping up. miss watkins, the shell usa also commit to stepping up production in april to help meet this challenge our nation faces? >> as a matter, fact we have gone on stream in the gulf of mexico. a new field about a week or ten days ago. which will produce about 20,000 barrels a day, more and this morning, we ended up with another new wall coming on stream that will produce it back to 10,000 barrels a day. we are in the process of bringing on new production. >> thank, you mr. word. we'll chevron step up to help our nation and increase production over the course of april? >> congressman, i know with -- less than six months ago i was asked a pledge to produce production. and i revisited that request and pledged to increase production. and i reiterate that today. we will increase our production. >> thank you, my time is
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expired. >> i thank the gentleman chair recognizes mr. crenshaw for five minutes. >> thank you madam chair. certainly enjoyed watching my democrat colleagues can post-traumatic leave between two opposing stances. joe, more joe more angela's. mr., what you surely remembered october of last year, when you were asked repeatedly by democrats to commit to less chilling and less production. do you remember that yes? >> congressman, i remember it well. >> today, we have seen the same contradicting messages as one would expect. and we wonder how on earth did we get to this point whether such a clear mismatch between supply and demand and very clear, under investment in oil and gas production. and what a mystery this is. look at it possibly cost us? stopping federal leases? no. delaying are outright canceling pipeline permits? no, impossible. or the president literally promising that you would end the industry and we wonder, why capital is not just sprinting for old and gas exploration and production.
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analysts say we need an additional oil and gas investment of 225 billion dollars globally, by 2030 if we are to avoid an energy crisis. . let me remind you people die from lack of energy. and in large numbers. i love all of that green compassion i was here about how some answers for that. so the question is, how do we create the conditions so that you are investors change their minds and actually want to spend this additional money. one companies are on track right now to make up that 225 billion dollars. why not? any reasons, i want to talk about the cost of capital in the influence of esg. president biden's hiking up the cost of capital, weaponizing banking rules like the access rule. doubling down on guidance that would make it more costly to be a bank that lens to fossil fuel industries. democrats over at financial services are helping them proposed or charge rank a surcharge for lending the companies like yours. now you have the delivered actions for democrats that held back to this esg investors, scc that put that sums on the scales under the investments
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and unreliable green energy instead of reliable oil and gas. this is the same as cc, who's aiding activists investors who want to use a proxy advisory process to force companies out of oil and gas. looks over at exxon, we know that is all about. so my question i want to start with mr. sheffield. my question, i want to start with mr. sheffield. the weaponization of the financial industry has had and will have an impact on investment and world oil production, is that correct? >> that is correct. in the past and in the future. mr. lawler, same question? >> yes i will thank you for the question. from what i can gather from the markets at this point, b p has not had any issues attracting capital in maintaining the low cost capital going forward. >> mr. wirth, same question? >> congressman there are no shortage of efforts that appear to be intended to constrain access to capital for this industry. >> i appreciate that.
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i want to make some of the points here. let's get some facts straight, the future depends on us getting this right. we can continue down this renewables only path and keep watching our prices skyrocket while also failing to meet demand. while also doing next to nothing to reduce emissions. we can deal with some hard facts. american oil and gas production is cleaner than opec's, cleaner than russia's. global energy demand will increase by 50% by 2050. oil and gas is still expected to make up the lion share of production. you cannot change the facts. the fact is that renewables will never meet that demand, never. to meet that renewables only climate goal you need to mindlessly m 2000% more. you need to mind indian 2000% more. cobalt protection we need to grow from 218% more. for wind farm to renew the same amount as a nuclear plant would need 30,000 tons of concrete, 50,000 tons of armed late, and 50,000 tons of plastic blades it cannot be recycled.
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by the way, it also doesn't work when the wind stops blowing. it is not green! america national grass quadrupled exports in the next decade which is entirely possible according to industry experts we would do something amazing, displaced coal around the world. there is another sack half of the global emissions are from foreign coal. displace that goal with cleaner gas you would reduce emissions 60%. wow, just like that you saw the energy crisis and have reduced emissions far far more than the foolish ten trillion dollar green new deal ever could. by the way, to our witnesses thank you for being here, taking abuse. that is the argument he should be making. instead of behaving like you have stockholm seldom like your civility to the radical environmentalist in congress will one day like you, they will never like. you please stand up for your work, your employees, and your consumers. speak the truth, don't pander to what they want on the left. americans need you, billions around the world who want to rise out of poverty, live in
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life of prosperity, need to. thank, you i yield back. >> thank the gentlemen. chair now recognizes mr. cray for five minutes. >> thank you so much chairwoman degette, and chair pallone for this meeting to the day. let me get this straight, the six oil companies testifying in today's hearing collectively generated more than 76 million in profit in 2021, first quarter numbers look even higher for 2022. in the meantime, minnesota families are paying near record high prices at the pump and my republican colleagues are howling about energy independence, when your industry has 9000 oil leases given to you by the government that you are currently using. this is another dumbfounding day in washington, truly. i don't fault you for making money, you are business. but we have a pandemic, we have
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putin, and you are using these crises to gouge the american people. you are using these crises to count constituents. experts are predicting tens of billions of dollars in profit, yet again this year, for all of you. that is on the back of my constituents. we all know that the price of crude oil has dropped in recent weeks, yet minnesota to has very little relief in the pup. owen lee form of released from record high gas prices that my constituents have seen has come in the form of renewable biofuels. right now in fuel stations across my district the blend of ethanol and gasoline known as e15 or an laid it 88 is saving my constituents as much as 50 cents per gallon compared with traditional gasoline. we could replace every barrel of oil from russia today with
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renewable fuels. which begs the question, with those record profits and a history of touting your desire to increase investment in renewable fuel, are you investing in strategies to reduce costs for consumers, like efforts to increase the availability of e15? i would like to turn to mr. wirth, first, for my question. mr. wirth, i would like to better understand your company's commitment to renewable fuels. given your record profits, how much is your company investing in via fuel research and development, and expanded deployment? >> congresswoman, i do not have the research and development number but i can tell you in terms of deployment, we will spend four billion dollars. we are drilling a renewable natural gas business, biodiesel, and are working with companies to integrate back into the
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agricultural feed stock change to grow our noble fuel systems. >> thank, you i will have my team to follow up to make sure we are aware of all of those efforts. we can learn more about the percentage of research you are putting into biofuels, to drive down the cost of fuel for my constituents in minnesota. i want to now turn specifically to a 15, it was recently reported that bp began offering the 15% ethanol blends in terminals at eight states, including minnesota. this will not only save consumers money, but it will also increase energy security and increase carbon emissions with the domestically produced product. mr. lawler, i appreciate this business decision from bp, i hope that others in the industry will follow suit. unfortunately due to a court case brought by refineries, consumers across the country will reduce access to e15 without an emergency waiver from the biden administration
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or immediate action. mr. lawler, let's start with you. i will give you each about ten seconds. i want to ask you specifically, do each of you, please jesper now, do you support an emergency waiver for e15, year-round sales? do you support a permanent resolution to the e15 are vp issue, so this lower cost, lower carbon, renewable fuel can be available to consumers year-round? yes or no, mr. excuse me, miss watkins. >> i would need to understand the specifics of what you're talking about. when i can tell you is we are investing quite a bit of money into biofuels. particularly renewable natural gas, biodiesel, by a fuels. >> miss watkins, i appreciate. that it was a yes or no answer. mr. woods, do you support e15 year-round? >> there are challenges with e15 going into -- >> okay, mr. wirth do you
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support e15 year-round? >> subject to safety considerations with older vehicles, we blend ethanol at the maximum allowable limits for hours or fuels. >> mr. muncrief, year-round? >> i actually don't know enough about that issue to really comment. >> oh, boy you are all investing in by a fuels, i can really see that here today. mr. sheffield? >> we do not, on retail. >> all right, thank. you my time is up. i will yield, thank you for your time. >> thank the gentlelady shanks the ever patient mr. armstrong who has been sitting here all day for five minutes. >> thank you madam chair. let's be clear on what the title of this meeting should be it should be gaslighting american on gas prices. candidate biden responded in 2019 said he would make sure it
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was eliminated -- >> in january 2020 when asked about new pipeline infrastructure biden responded, yes, yes. in february of 2020 candidate biden stated we are going to get rid of fossil fuels. in march of 2020 candidate biden said no more drilling on federal lands. no more drilling, including offshore! no ability for the oil industry to continue to drill, period. and. in october of 2020 candidate biden stated it has to be replaced by renewables overtime. in october of 2020 candidate biden said no fracking and or oil on federal land. in order to prove that the words was not just campaign rhetoric the day of his inauguration president biden kill the keystone energy pipeline and halted energy on federal -- land inflated the social cost of carbon to regulate more of fossil fuel production. on march 2nd of 2021 democrats
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including some on this committee it's produced a bill to increase the cost and time of oil production on federal landl and gas production on federal land. democrats introduced a bill to place an excise tax on american energy companies to produce oil and gas. it will first of 2021, democrats proposed a national carbon tax on oil, gas and the by-products. and on june 1st 2021, president biden proposed a bunch of that would increase taxes on u.s. energy producers by at least 35 billion dollars. august 11th, 2021, president biden has foreign operators in opec, not domestic and producers and increased supply to address rising gas prices. october 29th of 2021, president biden and congressional democrats again, some on this very committee proposed a meth in tax on u.s. oil and gas production. november 17th, 2021. president biden tried to redirect the blame for rising
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gas prices and requesting the ftc investigates oiling asked companies on trumped up accusations of illegal activities. on february of 2022, brighten -- bush changes making it next to impossible to build the upgrade pipeline infrastructure by requiring both upstream and downstream carbon mitigation plans before permits would be approved. on march 12th of 2022, democrats are seemingly mister presidents memo requesting energy companies, increase production, introduced a bill that would implement a massive new tax, ross throwing any incentive for u.s. producers to produce more oil. and on march 21st, 2022, the scc in an attempt to morph into the securities and environment commission, issued a proposal that would target carbon energy companies and empower active this shareholders. march 28th of 2022, president biden in the middle of an energy crisis, once again
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proposed a tax increase on domestic oil and gas producers, totaling nearly 100, 45 billion dollars. just last week, in the middle of all of this, asking for more investment in this industry, the fdic chairman proclaimed a carbon emitting sources of energy present risks to the safety of the financial system. further starving off capitol through domestic production that is needed. in short, this administration and democrats in congress have done everything they can to disrupt, delay and defeat domestic energy productions and then gaslight the american public by blaming producers for not immediately investing billions of dollars into the industry in which you are trying to destroy. i have a couple of questions for mr. mick masters and then i will end. mr. mick masters, do you think our allies in europe would like cheap, affordable american energy during what is going on right now? >> absolutely.
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>> do you know of any way to export renewable energy? >> yes well, the you guys know that i am an adviser to support energy which has -- acts for capacities. but i mean really, it is what's the exports that allows us to escape the dilemma of energy security or reduce reductions. and allows us to make up for the gaps in energy supply. that russia is using for corset purposes. >> i agree with you on energy, let me be more claire. do you know of any way to export either wind or solar energy? >> no, not on wind or solar. no question will be battery capacity, ability to store it and there are some you know, advance ideas out there about using cables i could go across the oceans and so forth. but those are very much, very
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foreign in the future. >> i think the gentlemen, chair now recognizes for five minutes. >> thank you, chairwoman again. and chairman woman pallone for allowing me to waive on and participate in today's hearing. we are nearing the end of a very long day. and i want to thank our witnesses for your time and your insights during today's hearing. as the chairwoman noted, this is an investigatory an oversight hearing. not a legislative hearing. we are here today because people across the country are feeling pain at the pump. and we want to help. we are looking for ways to help, to ease the pain that inflation at the pump and elsewhere is causing for the people that we represent. these are serious challenges for our people, for the economy and for our policy making. that is why i am so disappointed that so much of the questioning that we've heard today hasn't around scoring political points and blaming others, rather than taking a serious look at the challenges that we face and their drivers as well as how we can address them.
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our energy ecosystem in this country and around the world is complex. as are the challenges that are presented in this moment, how we find the energy sources and extract them, move them, and refined them into fuels and petrochemicals and deliver them to consumers at home and around the world is vast, very complicated. and in my district and houston, we are involved in every single aspect of that work. and we are proud to do, it we supply energy to the world. for us, that means working collaboratively to partner with the people who produce energy, including our witnesses today, and with policy makers everywhere. and charting a path for the energy future, that understands the very real challenges of today, from supply issues, driving up prices to climate change and threatening our communities to create a lower carbon future. i hope everybody here heard that from the witnesses today, and the five minutes and i, have i cannot possibly respond to everything that has been said here today that i disagree with.
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but there are things worth remembering as we move forward. less than three years ago at the end of 2019, the united states had a new domestic production peak. just under 13 million barrels a day, more than 800 rigs were operating here in the united states. when the pandemic hit, demand for oil and gas collapsed and their unprecedented demand instruction. i cannot oversee the shot that we felt that hole, seeing oil trade for less than zero dollars a barrel. >> we are going to leave this recorded hearing were homeland security, alejandro mayorkas will testify about voter policy and other dhs operations. we will take questions from members of the judiciary committee. this is live coverage on c-span three.
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