Big Oil and Gas Corporations Profit as Working Montanans Pay More at the Pump

Big oil and gas companies continue to rake in enormous profits while working people across the country have struggled to pay for gas at the pump and keep up with rising energy bills. These prices force working families to make difficult decisions about their family budgets, sometimes choosing between or going without necessities, all against the backdrop of a high cost of living. Big oil and gas corporations have been accused of manipulating prices by engaging in price gouging, price fixing and other anti-competitive practices to keep prices – and their bottom lines – high at the expense of consumers. Federal legislation – in particular, the Inflation Reduction Act of 2022 and the Bipartisan Infrastructure Law of 2021—is working to lower gas prices and bring relief to families across the country, including working Montanans. 

Big Oil and Gas Profits Soar, Shareholders and Executives Reap the Rewards

ExxonMobil and Chevron, two of the top oil and gas companies operating in the United States, saw profits of more than $36 billion and $21 billion respectively in 2023. Exxon and Chevron had their largest annual profits in a decade last year. Nevertheless, gas prices remain high and these companies appear to be focused on maximizing their profit at any cost rather than making their product less expensive for the consumer. The companies spent astounding amounts of money on stock buybacks, which direct profits to shareholders and executives instead of easing the burden on average consumers. In 2023 alone, ExxonMobile, Chevron, Shell, TotalEnergies SE, and BP Plc spent over $113 billion on dividends and stock buybacks. 

Companies Pursue Anti-Competitive Practices to Keep Prices High

Large companies too often engage in anticompetitive practices – which reduce competition in the marketplace and raise prices or otherwise hurt consumers – in order to increase profits. Big oil and gas companies have been accused of such conduct. Recently, the Federal Trade Commission (FTC) filed a complaint that the former CEO of Pioneer Natural Resources privately coordinated with officials at the Organization of the Petroleum Exporting Countries (OPEC) in order to limit supply and increase prices by coordinating pricing between oil companies in the United States and foreign oil producers. Mergers and acquisitions also threaten to reduce competition in the marketplace, although not all mergers are deemed anticompetitive. Nonetheless, a growing number of United States gas and oil companies are merging, meaning less competition in the market. Recent examples include Chesapeake Energy’s purchase of Southwestern Energy for $7.4 billion in January and ExxonMobil’s acquisition of Pioneer Natural Resources for $60 billion. The merger between Chesapeake Energy and Southwestern Energy created the largest independent United States natural gas producer.

Impact on Montana

Gas prices in Montana currently average $3.33 per gallon and the state is ranked 13th in the country for the average price of gas. Working individuals and families across the country are hurt by high gas prices and the actions big oil and gas companies take to keep them high. The geographic and economic landscape of Montana makes these high gas prices particularly significant to working Montanans. First, Montanans must often drive meaningful distances to and from work, school and family and leisure activities due to the rural nature of the state. The more rural the community, the more its residents are affected by high gas prices as they must travel, most often by car, farther distances for work, health care appointments, and recreation. Also, high gas prices can also discourage tourism, therefore hitting local economies and small businesses especially hard. 

Laws that will Lower Gas Prices

The Inflation Reduction Act of 2022 and the Bipartisan Infrastructure Law of 2021, both signed by President Biden, will lower gas prices for working families across the country, including in Montana. Together, the two laws invest more than $430 billion into modernizing this country’s energy system and, by doing so, lowering household and business energy costs. The Department of Energy (DOE) estimates that the two laws will lead to an 11-13% reduction in gasoline prices over the period between 2022 and 2030. Furthermore, DOE estimates that the two laws will save families across the country $27 billion to $38 billion on electricity bills between 2022 and 2030. The Inflation Reduction Act’s tax credits increase the production of clean energy and this contributes to the savings individuals and families will experience.

The big oil and gas companies are relentless in their pursuit of profit, and working people across the country are forced to pay the price of this greed as they pump their gas, pay their energy bills and make difficult decisions about family budgets. Working Montanans feel the strain even more acutely as longer travel distances and little public transportation necessitate more use of cars. The Inflation Reduction Act and Bipartisan Infrastructure Law legislation on the federal level seeks to modernize our nation’s energy system, reduce the price of gas, and increase the production of clean energy, so that working Montanans no longer have to choose between gas and other necessities.