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Chevron doubles last year's profits as consumers are gouged at the gas pumps

by Dan Bacher
The news of Chevron’s record profits and record oil and gas production in the U.S. comes as data from the Bureau of Land Management reveals that President Biden approved more oil and gas drilling permits in his first two years in office than former President Donald Trump.
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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.
See: https://chevroncorp.gcs-web.com/static-files/346400b0-61a5-46cf-a0b2-7d7dfb3f98ab

”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.”
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