President Biden’s feud with oil firms heats up again because the industry fires back. But could it find yourself just burning you?

‘They ain’t seen nothing yet’: President Biden’s feud with oil firms heats up again because the industry fires back. But could it find yourself just burning you?

It could be a brand new 12 months, but President Joe Biden’s feud with the country’s major gas firms is raging on.

Biden has taken issue with oil juggernauts like Chevron and Exxon Mobil which have been raking in profits this last 12 months — especially within the wake of scorching inflation and Russia’s war in Ukraine.

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Now, the oil and gas industry is popping up the warmth on the situation.

In his annual address in Washington on Jan. 11, American Petroleum Institute President Mike Sommers blamed the “barrage of negative rhetoric” from the White House for slowing domestic oil and gas production.

With gas prices still elevated, and plenty of households muddling through an expensive winter, the strained relationship between Biden and the country’s oil firms could mean the situation will only worsen over the subsequent few months.

Biden hasn’t minced his words

Biden has been waging a battle with oil firms since before he even took office, but he escalated it last November when he called their record profits “a windfall of war,” not the results of anything “latest or progressive.”

He went on, exhorting them to “act beyond their narrow self-interest,” and “spend money on America by increasing production and refining capability” on behalf of “their consumers, their community and their country.”

And in the event that they don’t? Biden warns they’re going to face “a better tax on their excess profits and … higher restrictions.”

Shortly after that, Amos Hochstein, a special presidential coordinator for Biden, told the Financial Times it was “un-American” and “unfair to the … public” that firms didn’t use those record profits to take a position in increased production.

What Biden appears to be proposing is a “windfall” tax, which might redistribute profits to American consumers still paying out the nose on the pump.

“It’s time for these firms to stop war profiteering, meet their responsibilities on this country and provides the American people a break,” Biden added.

Oil firms fire back

While gas has dropped from a record high of over $5/gallon in June, it’s still currently hovering around $3.28. And that, together with a dangerously low oil supply and a dwindling diesel stockpile is clearly weighing on Biden.

But oil firms argue they’re already contributing to the cause. Exxon Mobil’s CEO Darren Woods took a moment in the course of the company’s third-quarter earnings call on Oct. 28 to handle Biden.

“There was discussion within the U.S. about our industry returning a few of our profits on to the American people,” Woods said. “That’s exactly what we’re doing in the shape of our quarterly dividend.”

The president didn’t take kindly to that, tweeting his response a couple of hours later: “Can’t consider I actually have to say this but giving profits to shareholders is just not the identical as bringing prices down for American families.”

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The issue has become political

But all this back-and-forth could only be aggravating the situation. A blog post from the Institute for Energy Research accused the Energy Department of asking them to “undersell their product” and accused Biden of using the country’s Strategic Petroleum Reserve “as a political tool to lower gasoline prices.”

And in an interview with Bloomberg, Sommers from the American Petroleum Institute said the signals Biden is sending discourage investment in the oil and gas industry “does harm to capital.”

“If the government signals support for American energy, it would boost investor confidence in future projects to unleash needed supplies and strengthen infrastructure,” Sommers says.

Biden does seem prepared to compromise, though. According to another report in Bloomberg, Energy Secretary Jennifer Granholm addressed oil and gas executives in Washington in mid-December at a meeting of the National Petroleum Council, an outside federal advisory group with members from Exxon Mobil Corp. and Royal Dutch Shell Plc.

“We are eager to work with you,” Granholm said, adding that fossil fuels are likely to be around for a while.

She also acknowledged the administration has “butted heads” with the industry, referring to it as the “elephant in the room.” And with growing demand and a shortage of diesel in the northeast, she says the administration is aware fossil fuel production will need to increase soon.

Don’t expect Biden to capitulate

Still, the president isn’t likely to cave entirely.

Just a few short months ago in November, Exxon and Chevron, two of the country’s biggest oil companies, reported hefty profits for the fourth consecutive quarter. That same day, in a briefing from the White House, Biden pointed out that six of the largest companies “made $70 billion in profit” in just 90 days.

Appalled that all that money was going back to their shareholders and executives, Biden issued a promise: “I’m going to keep harping on it. [These companies] speak about me picking on them, they ain’t seen nothing yet. I mean it. It outrages me.”

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