As American Families Pay More At The Pump, The #GOPTaxScam For The Rich Is Paying Off For Wealthy Oil Executives And Failing To Deliver For American Families

May 21, 2018

USA Today: Higher Gas Prices Are Eating Into Trump Tax Cut, Trimming Spending By Americans

Houston Chronicle: Oil Companies To Reap Windfall In Tax Cuts, But Shareholders Get The Lion’s Share

Oil Companies Have Announced Billion Dollar Buybacks And Layoffs In 2018 Despite Benefiting From The Tax Law

New Video From Senate Dems Shows Coverage Across The Country Places The Blame for Higher Gas Prices Where It Belongs: President Trump


TWITTER

FACEBOOK

American families will pay hundreds more at the pump this year. According to independent estimates, gas prices could rise further because of President Trump’s decision to pull out of the Iran deal.

Goldman Sachs Senior Economist Daan Struyven: “On the activity side, we estimate that higher oil prices are currently weighing on the quarterly annualized pace of GDP growth by 0.1pp, with a negative 0.25pp contribution from lower real consumption outweighing a positive 0.15pp contribution from higher energy capital spending. The estimated drag on consumption is significant because it should roughly cancel out the 2018 consumption boost from tax cuts and is particularly large on the lower end of the income distribution.” [Q&A on Oil Prices and the US Economy, 5/15/18]

J.P. Morgan Economist Michael Feroli: “Looking ahead, the consumer now faces the added burden of higher gasoline prices.” [Reuters, 5/15/18]

Oil Price Information Service Global Head of Energy Analysis Tom Kloza: “The average family out there can expect to pay about $200 more than they paid last driving season and about $250 more than the 2016 driving season.” [NPR, 5/9/18]

AAA Spokesperson Devin Gladden: “If sanctions are reinstated, the U.S. could see potential impact on gas prices this summer, leading to the national average ranging between $2.80 and $3.00. Any immediate impact will be to crude oil prices, which will then trickle over to retail later this summer.” [Newsweek, 5/8/18]

Canary LLC CEO Dan Eberhart:  “Withdrawing from the Iran nuclear deal will support higher oil prices.” [CNN Money, 5/9/18]

PIMCO Executive Vice President Greg Sharenow: “The consumers are going to shoulder the bill.” ... “The U.S. economy will face headwinds from prices that will come as a natural result of this.’” [Time, 5/8/18]

Oxford Economics Chief Economist Gregory Daco: “In an environment of increased global supply tightness, this will put further upward pressure on prices.” [LA Times, 5/8/18]

Oxford Economics Chief Economist Gregory Daco:  “For the U.S. economy, a prolonged rise in oil prices could reverse part of the benefits from the fiscal stimulus,” … “this could offset half of the fiscal boost in 2018.” [CBS News, 5/9/18]

Again Capital Founding Partner John Kilduff: “If Trump announces full sanctions on Iran, oil could jump $5 to $10, immediately, said John Kilduff of Again Capital. ‘Gasoline prices would spike right along with it,’ he said. ‘You're talking $4 gas.’” [CNBC, 5/8/18]

GasBuddy Head of Petroleum Analysis Patrick DeHaan: “The potential exists the national average could go over $3 a gallon.” [CBS News, 5/9/18]

GasBuddy Head of Petroleum Analysis Patrick DeHaan: “‘Continuing the deal would be a surprise and could bring lower gas prices, while prices may move higher if the deal is killed,’ Patrick DeHann, head of petroleum analysis at GasBuddy, told Yahoo Finance. ‘Language will be key – will tensions with Iran be escalated? The strength of the announcement in terms of tonality is what I believe will dictate how oil and gas prices react.’ In terms of numbers, DeHann estimates cooling tensions could lower prices by 10 cents a gallon and escalating ones could push prices up by 25 cents a gallon overall.” [Yahoo Finance, 5/8/18]

Oil companies have passed along their windfall from the GOP tax scam for the rich to corporate executives and wealthy shareholders – not workers.

Reuters: Devon Energy will Lay Off 9 Percent Of Staff to Boost Returns. “Devon Energy Corp said on Tuesday it would lay off 300 workers, roughly 9 percent of staff, part of a plan to streamline operations and boost the shale oil producer’s sagging returns and stock price. The cuts will affect all areas of the company’s operations, not just its Oklahoma City headquarters. Staff will be let go ‘in the weeks ahead,’ Devon said in a statement. Devon, like many of its shale peers, has come under pressure from Wall Street in recent months to focus less on production and more on ways to boost shareholder returns. The company’s stock had, as of Tuesday’s close, lost more than 20 percent of its value in the past year despite a jump in oil prices.” [Reuters, 4/10/18]

Houston Chronicle: Hess Corp. to Cut 300 Jobs. “The oil and gas company Hess Corp. said it will lay off about 300 employees or 13 percent of its workforce this year as it labors to sell assets, slim down operations and post its first quarterly profit since 2014.” [Houston Chronicle, 1/16/18]

CNBC: Chesapeake Energy Lays Off 13% Of Workforce, About 400 Employees. “Chesapeake Energy has announced it will lay off hundreds of employees as the debt-burdened natural gas driller continues to overhaul its business. In a letter to employees, Chesapeake said it will let go about 13 percent of its workforce, which stood at 3,247 people as of September. A company spokesperson confirmed the Oklahoma City-based company would trim back about 400 positions. The layoffs will occur primarily at Chesapeake's Oklahoma City campus.” [CNBC, 1/30/18]

Houston Chronicle: “Chevron reported a tax benefit of $2 billion, but said it hasn’t changed its plans to spend some $8 billion this year and $25 billion over the next three years. The company is not planning ‘to make major changes to any compensation or benefits programs at this point,’ Chevron spokesman Sean Comey said. Chevron raised its quarterly dividend from $1.08 a share to $1.12 a share, its largest increase in several years.” [Houston Chronicle, 3/2/16]

ConocoPhillips Spokesman Daren Beaudo: ConocoPhillips “did not pay an additional bonus directly because of tax reform,” and “We don’t expect a change in hiring.” [Houston Chronicle, 3/2/18]

The Republican tax bill has been a boon to oil company executives and wealthy shareholders. Since the Republican tax bill passed, oil companies have announced nearly $15 billion in corporate stock buybacks. These buybacks overwhelmingly benefit wealthy shareholders and top executives. In fact, 84% of stocks are owned by the top ten percent of Americans.

Corporation

Share Buyback Announced in 2018 (Millions)

Date

Marathon Petroleum

$5,000

30-Apr

Phillips 66

$3,300

14-Feb

Valero

$2,500

23-Jan

Hess Corporation

$1,000

8-Mar

Devon Energy

$1,000

7-Mar

Noble Energy

$750

15-Feb

Anadarko Petroleum

$500

7-Feb

ConocoPhillips

$500

1-Feb

Delek US

$150

27-Feb

TOTAL Corporate Buybacks Authorized in 2018 by Oil Companies

 

$14.7 Billion

Jeffrey L. Ritenour, Executive Vice President and Chief Financial Officer, Devon Energy: “The recent changes in U.S. tax law were favorable to Devon and have enhanced our ability to return cash to shareholders in the future.” [Q4 2017 Results – Earnings Call via Seeking Alpha, 1/13/18]

Ryan Lance, Chairman and Chief Executive Officer, ConocoPhillips: “We safely delivered our plan again this quarter, while generating a strong improvement in free cash flow, reducing our debt and returning over 30 percent of cash from operations to shareholders through our dividend and buyback program.” [Press Release, 4/26/18]

Reuters: Chevron Says Looking To Resume Share Buybacks. “U.S. oil and natural gas producer Chevron Corp said it expects to increase its free cash flow this year onwards, putting it in a position to resume its share buyback program. Chevron had halted its share repurchase plans in 2015 to conserve cash amid a slump in oil prices.” [Reuters, 3/6/18

   ###