Chevron Doubles Last Year’s Profits As CA Consumers Are Gouged At The Gas Pumps

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By Dan Bacher, THE DAILY KOS

January 27, 2023

Los Angeles, CA— Chevron Corporation, the San-Ramon based oil giant that is infamous for environmental devastation and degradation from the Ecuadorian Amazon to Richmond, California, reported 2022 earnings of $35.5 billion, more than doubling last year’s $15.6 billion. Financial data also revealed that the company doubled its per gallon profits off consumers.  

In addition, Chevron reported record oil and gas production in the the U.S., with production in the country increasing to 1.2 million barrels of oil equivalent per day.

“We delivered record earnings and cash flow in 2022, while increasing investments and growing U.S. production to a company record,” gushed Mike Wirth, Chevron’s chairman and chief executive officer, in a press statement. “The company’s investments increased by more than 75 percent from 2021, and annual U.S. production increased to 1.2 million barrels of oil equivalent per day, led by 16 percent growth in Permian Basin unconventional production.” 

“Again in 2022, we delivered on our financial priorities: returning cash to shareholders, investing capital efficiently, and paying down debt,” Wirth claimed. 

In the fourth quarter of 2022 alone, Chevron Corporation reported earnings of $6.4 billion ($3.33 per share – diluted) for fourth quarter 2022, compared with $5.1 billion ($2.63 per share – diluted) in fourth quarter 2021.

Consumer Watchdog had a much different take on the record profits by Chevron than Chairman Wirth as California consumers were hit with record prices at the gas pumps.

“West Coast refining margins were a startling 85 cents per gallon for 2022, doubling last year’s margin of 37 cents per gallon,” Consumer Watchdog pointed out in a press statement. “Chevron historically posted average profits per gallon of 46 cents over the last 20 years and only exceeded 50 cents three times in that period—until now. Chevron’s West Coast refining margins were the largest of any of its other regions.”  

The group said the legislature is considering legislation, SBx12 (Skinner), to establish a windfall profits cap on how much oil refiners can make in profit per gallon of gasoline. Consumer Watchdog has suggested penalties kick in after 50 cents per gallon.

“Chevron’s profit reports are the poster child for why we need a price gouging penalty on excessive profits,” said Jamie Court, President of Consumer Watchdog. “Chevron’s pocketed billions of dollars too much off Californians’ hard earned money and made them choose between paying rent and filling up their tank. With 30% of the California market and an 85 cents per gallon profit margin, Chevron would have paid a multi-billion dollar penalty if the price gouging penalty had been in effect and would have had to return the money to consumers.”

“Fourth quarter profits from Chevron’s refining operations alone nearly doubled to $1.18 billion over $660 million for the fourth quarter of 2021. For the year, the company reported more than doubling those refining profits to $5.4 billion over $2.4 billion last year,” Court said. 

Consumer Watchdog calculates profits per gallon by dividing the reported refining margin for the year of $35.80 per barrel by 42, the number of gallons in a barrel of oil. Refining margins reflect the difference between what a refinery pays for crude versus what it charges for finished products.

Price-gouging was at its peak in the second and third quarters of 2022,” the group revealed. “In the first quarter of 2022, Chevron made 63 cents a gallon on a refining margin of $26.50. Chevron raked in $1.12 per gallon in profits in the second quarter on a refining margin of $47.03 per barrel. It collected 95 cents a gallon in the third quarter on a refining margin of $39.99. In the fourth quarter, the gouging lessened to 70 cents on a refining margin of $29.58—still an unacceptable level.”

Under a new law, SB 1322 (Allen), the Oil Refiner Price Disclosure act, Chevron and other California refiners will be required to report monthly the cost of the crude oil they buy versus the wholesale price of the gasoline they sell and their profits made per gallon. This reporting requirement, designed for transparency in gasoline pricing, will produce data in closer to real time and will be reported to the California Energy Commission starting in March,” the group noted. 

“The price gouging penalty under consideration by California lawmakers will go hand-in-hand with those reporting requirements and is vital to enact,” said Consumer Advocate Liza Tucker. “This is a way to get a handle on the gouging practically as it is happening and apply a penalty whenever companies exceed 50 cents per gallon profit—a level that affords them plenty of earnings without affecting the supply of crude oil or gasoline.” 

Marathon and Phillips 66 will report their year-end earnings next week and PBF Energy reports in mid-February, Tucker added.   

The news of Chevron’s record oil and gas production in the U.S. comes as Ben Adler of Yahoo News reports that data from the Bureau of Land Management “shows that President Biden approved more oil and gas drilling permits in his first two years in office than former President Donald Trump.” 

“From Jan. 20, 2021, to Jan. 19 of this year, the BLM approved 6,430 permits for oil or gas drilling on federal land, compared with 6,172 drilling permits approved during the first two years of the Trump administration.”

Background: Big Oil Pumps Millions Into Influencing California Politicians and Regulators 

The total of $20 million spent by the oil industry to gather the signatures for a referendum to reverse AB 1137, a law that mandates 3200 foot health and safety setbacks around new and reworked oil and gas wells, is just part of the millions of dollars the industry spent as it was making enormous profits after California prices soared to record highs in 2022.

Flush with billions of dollars in record profits, the oil and gas companies in California have been spending big money lately in an attempt to influence the California Legislature and voters and continue the systemic regulatory capture that has fouled California government for decades.

The oil and gas industry has spent over an astounding $30 million in the first seven quarters of the 2021-22 Legislative Session against SB 1137, legislation to mandate buffer zones around oil and gas wells, and other bills they were opposed to. We won’t know the final lobbying numbers until around January 31, 2022.

Big Oil and the Western States Petroleum Association (WSPA) spent $4,573,758 in lobbying expenses from September 1 to October 31, 2022. That brings the total of oil and gas corporation lobbying expenses to $30,029,638 in the last seven quarters of the 2021-22 Legislative Session:… 

The Western States Petroleum Association, the largest and most powerful corporate lobbying group in Sacramento, spent $2,164,967 of that $4,573,758 in lobbying expenses in the seventh quarter of the legislative session. That brings the total of the lobbying expenses by WSPA alone to $8,910,825 in the 2021-22 session.

While a long and hard-fought campaign by environmental justice groups, with the help of Governor Gavin Newsom, was able to finally get SB 1137 approved by the Legislature, other important bills were stopped by oil industry-backed legislators. Those measures include a bill to ban offshore drilling off the California coast and another bill to divest State of California pension funds from investments in the fossil fuel industry.

The oil and gas industry also spent millions of dollars for legislative candidates it favored in the November 2022 election. The biggest sources of outside spending in legislative races in the November 2022 election cycle were oil and gas companies and electric utilities, according to Ben Christopher and Sameea Kamal of Cal Matters.

“Those organizations have spent more than $7.6 million, roughly one-fifth of the total. Most of that spending happened before Newsom announced a December special legislative session on his oil tax plan.”

Big Oil has been able to get away with what it does in California for decades because of the enormous influence the Western States Petroleum Association, the trade group for the oil industry, and oil and gas companies, has exerted over the California Legislature, regulatory agencies and media.

Over the past four years, fossil fuel companies paid almost $77.5 million to lobby lawmakers in Sacramento, reported Josh Slowiczek in Capital and Main on May 14.

“Oil and gas interests spent four times as much as environmental advocacy groups and almost six times as much as clean energy firms on lobbying efforts in California between 2018 and 2021, according to a Capital & Main analysis — reflecting the intensity of the industry’s efforts to influence policy in a state whose leaders have vowed to build an energy future free of fossil fuels,” Slowiczek wrote.  

WSPA and Big Oil wield their power in 8 major ways: through (1) lobbying; (2) campaign spending; (3) serving on and putting shills on regulatory panels; (4) creating Astroturf groups; (5) working in collaboration with media; (6) creating alliances with labor unions; (7) contributing to non profit organizations; and (8) sponsoring awards ceremonies, including those for legislators and journalists.

Media collaboration with Big Oil

WSPA and Big Oil have for years worked closely with media outlets and more recently have sponsored awards for legislators and journalists.

For example, Catherine Reheis-Boyd, WSPA President and former Chair of the Marine Life Protection Act (MLPA) Initiative Blue Ribbon Task Force to create “marine protected areas” on the South Coast, was on the “short list” of nominees for the LA Times “Inspirational Women Awards” held on October 18, 2022.

Can you guess who was one of the sponsors of the LA Times awards? Yes, you guessed right — WSPA was a sponsor.

According to a tweet from @OfficialWSPA, “Today @latimes acknowledged a woman who is already well known in our industry as a trailblazer and inspiration to tens of thousands of women. Congrats to our fearless leader @WSPAPrez for being recognized as a shortlisted nominee for the Inspirational Women Awards.” 

In addition, four LA Times reporters this year received the “Courage in Journalism” award from the Sacramento Press Club. Yes, the Western States Petroleum Association was one of the sponsors of these awards also.

In 2015, I wrote this article about how LA Times and the California Resources Corporation teamed up on a propaganda website: Fortunately, the Times is no longer managing and running that website. 

Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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