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Latest Leftist Outrage: Energy Companies Making Money

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It was only two years ago that low oil and natural gas prices had depressed major oil and gas company profits so much that ExxonMobil had to borrow money to patch them over. Even before the pandemic arrived, fossil fuel energy stocks reached their lowest share of the S&P 500 in decades (which signaled “screaming buy” to me).

The oil market turned around rather more quickly than I expected, but epicycles of oil and gas prices—and energy company profits—are hardly a brand new phenomenon. So it is with no little amusement that the Washington Post reports that energy companies that are enjoying higher profits right now are using those profits to . . . reward shareholders. Why those evil dastardly capitalists.

The nation’s biggest oil and gas companies have significantly increased stock buybacks and dividends since Russia invaded Ukraine in late February, raising questions about whether the firms are using wartime profits to enrich investors instead of curbing Americans’ pain at the pump, three liberal advocacy groups write in a new report shared exclusively with The Climate 202. . .

One could argue that boosting payouts to investors could be a net positive for the climate, should those investors choose to reinvest their money in renewable energy companies rather than fossil fuel firms. But Alan Zibel, research director at Public Citizen and another co-author of the report, questioned whether that scenario was realistic.

“I wouldn’t necessarily count on investors who collect oil dividends to foster the green energy transition,” Zibel said.

And I wouldn’t count on leftists to get over their outrage that capitalists want to return capital to shareholders, since it interferes with the primary urge of the left, which is to expropriate other people’s property.

Take in this one, for example:

“We have a choice. We can choose to have you continue to pay the federal gas tax this summer or we can choose to try to make the oil companies pay it out of their record profits. This is the kind of choice that I believe we should be trying to make, because I know where I stand. . .

“I believe we should impose an excess profits tax on the oil companies. They have record profits that they frankly are just sitting there counting because they are not doing anything new to earn it; they are just taking advantage of what is going on.”

Hillary Clinton, May 2, 2008

Some things never change.

For the record, averaged over the long term, the profit margin for major oil and gas producers is right about the average for all manufacturers—roughly 5 percent. The profit margin for Apple’s iPhones and other devices is typically 25 percent or better, which is one reason Apple has something like a $100 billion cash hoard, after significant stock buybacks (which it is continuing). Somehow the left never kvetches about the massive cash hoard, “obscene” profit margins, or stock buybacks in the tech sector like they do for oil and gas. I wonder why? (That’s a rhetorical question; of course I don’t wonder why.)

I like obscene profits, because it is the one kind of “obscenity” that the left actually opposes. It’s a start.

Chaser/periodic reminder:

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