Calls for Windfall Tax Grow as ExxonMobil Smashes Big Oil Profit Record With $56 Billion Haul

As ExxonMobil on Tuesday joined other U.S. oil companies in reporting record 2022 earnings amid rising gas prices, consumer and climate advocates renewed calls for a Big Oil windfall profits tax.

Texas-based ExxonMobil posted a $55.7 billion profit last year, breaking not only its own previous company record—$45 billion in 2008—but setting a historic high for the Western oil industry, according toReuters. The company's profit is a 144% increase from 2021 and, as Fossil Free Media director Jamie Henn noted, "enough money to send every person in the U.S. $178 to help offset the costs of high fossil fuel costs and gas bills."

Marathon Petroleum—the top U.S. refiner—said Tuesday that it raked in $16.4 billion last year while approving a $5 billion stock buyback, and Phillips 66 reported $8.9 billion in adjusted 2022 profit, a 253% increase from 2021.

Tuesday's earnings reports came just days after Chevron announced $35.5 billion 2022 profit, also a company record, and days before Shell, BP, and Total are all expected to follow suit on the strength of profits related to Russia's invasion of Ukraine and the European energy crisis.

Meanwhile, the average U.S. price of a gallon of gasoline crept up to over $3.50 on Tuesday, with average prices by state ranging from $3.40 in Nebraska to $4.93 in Hawaii, according to the American Automobile Association.

Last year, "familiesacross Pennsylvania paid $5 a gallon for gas while Exxon made profits that 'smashed earnings records' and Chevron posted 'record earnings," said U.S. Sen. John Fetterman (D-Pa.), responding to recent Big Oil profit reports. "This price gouging is simply disgusting, and I'm going to get to the bottom of it."

Cassidy DiPaola, spokesperson for Stop the Oil Profiteering, lamented that "while we're getting robbed at the pump, Big Oil's obscene profits are out of control and billionaire fossil fuel CEOs are getting richer and richer."

DiPaola continued:

Big Oil is shattering records precisely because of the pain the public is feeling at the pump. We're paying more for gas and electricity because Big Oil companies are gouging Americans and benefiting from a rigged system that keeps prices high in times of war and crisis. And on top of that, Big Oil CEOs are making massive bonuses and rewarding big Wall Street investors while families are having to decide between filling up their gas tanks or paying for medication and childcare.

"Enough is enough," she added. "It's time to fight back against the politicians and Big Oil CEOs who put their billions before the health and safety of our families, our communities, and our climate. We need to hold them accountable now with solutions like a windfall profits tax, and invest in clean energy solutions that can free us from expensive fossil fuels."

Robert Weissman, president of the consumer advocacy group Public Citizen, said that "Big Oil has imposed a private tax on the American people—to the tune of more than $90 billion from just two companies alone."

"It's past time for the American people to take that money back," he added. "A windfall profits tax would tax Big Oil on its inflated revenues—due only to the rising global price of oil and having nothing to do with Big Oil's costs or investments—and return the money to American consumers."

Last March, Rep. Ro Khanna (D-Calif.) introduced a bill to tax excess oil company profits and use the proceeds to pay American households a quarterly refund. That same month, Sen. Bernie Sanders (I-Vt.) introduced the Ending Corporate Greed Act, which would tax windfall profits of major corporations at a rate of 95%.

While President Joe Biden has threatened to support a windfall profits tax on oil companies if they don't ramp up production, he has not yet done so.

Responding to the increasing calls for taxing excess Big Oil earnings, ExxonMobil chief financial officer Kathryn Mikells toldReuters that windfall profits taxes are "unlawful and bad policy," and would have "the opposite effect of what you are trying to achieve."

In a Reutersopinion piece published Tuesday, Sandrine Dixson-Declève, co-president of the Club of Rome and project lead for Earth4All initiative, wrote that "oil and gas companies are perhaps the most flagrant example of our upside-down world."

"Despite being responsible for the majority of the emissions that cause climate change, they continue to make higher and higher profits," she explained. "At the same time, vulnerable people in the lowest-income countries, who have done the least to cause climate change and are most impacted by the extreme weather events caused by a warming world, are getting poorer."

"There is absolutely no reason not to tax windfall profits in all sectors, in particular when they have been made during periods of scarcity and speculation when the rest of the world is worse off," Dixson-Declève added. "Ending tax incentives and subsidies for fossil fuels is simply a no-brainer in a world where climate change is already costing untold financial and human losses every year."