If it is a fairness argument, I don’t quite follow the logic since even with the windfalls Exxon has underperformed the overall market over the last 5 years.
— Lawrence H. Summers (@LHSummers) November 1, 2022
Big Oil has been crushing the rest of the stock market recently — Exxon’s share price has spiked 81% so far this year. The S&P 500, on the other hand, is down 19% this year and on pace for its worst year since 2008.
But oil is a notoriously boom-to-bust industry. Oil companies lost billions of dollars — and many went bankrupt — in 2020 when oil prices briefly crashed below zero for the first time ever during the Covid recession.
“If it is a fairness argument, I don’t quite follow the logic since even with the windfalls Exxon has underperformed the overall market over the last 5 years,” said Summers. …
Mike Sommers, CEO of the American Petroleum Institute, said in a statement on Monday that instead of “taking credit for price declines and shifting blame for price increases,” the Biden administration should “get serious” about addressing the supply and demand imbalance.
[Summers is well advised to remain confused, since there is no rational argument for a windfall-profits tax on oil and nat-gas producers. They’re not hoarding capital for capital’s sake; Biden’s energy policies make long-term investment in exploration and extraction impossible. — Ed]
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