President Biden’s feud with the oil companies is heating up again as the industry fires back. But can it end up just burning you?

'They haven't seen anything yet': President Biden's feud with oil companies flares up again as the industry fires back.  But can it end up just burning you?

‘They haven’t seen anything yet’: President Biden’s feud with oil companies flares up again as the industry fires back. But can it end up just burning you?

It may be a new year, but President Joe Biden’s feud with the nation’s largest gas companies continues.

Biden disagrees with oil giants like Chevron and Exxon Mobil, who raked in profits last year, especially in the wake of searing inflation and Russia’s war in Ukraine.

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Now the oil and gas industry is escalating the situation.

In his annual address in Washington on January 11, American Petroleum Institute President Mike Sommers accused the White House of slowing oil and gas production due to “a barrage of negative rhetoric.”

With gas prices still elevated and many households enduring an expensive winter, strained relations between Biden and the country’s oil companies could mean things will only get worse in the next few months.

Biden did not skimp on words

Biden had been at war with the oil companies before he took office, but last November he escalated it by calling their record profits “a windfall of the war” rather than the result of anything “new or innovative.”

He continued by urging them to “act beyond their narrow self-interest” and “invest in America to increase production and processing capacity” on behalf of “their consumers, their community and their country.”

And if not? Biden warns that they will have to face “higher excess profit tax and … higher caps.”

Shortly thereafter, Amos Hochstein, Biden’s special presidential coordinator, told the Financial Times that it was “un-American” and “unfair to … the public” that companies did not use these record profits to invest in increased production.

Biden appears to be proposing a “windfall” tax that would redistribute profits to American consumers, who would still be paying their noses at gas stations.

“The time has come for these companies to stop profiting from the war, fulfill their responsibilities in this country, and give the American people a breather,” Biden added.

Oil companies shoot back

While gasoline fell from a record high of over $5 a gallon in June, it is currently still hovering around $3.28. And that, along with dangerously low oil reserves and dwindling diesel inventories are clearly weighing on Biden.

But the oil companies say they are already doing their part. Exxon Mobil CEO Darren Woods seized the moment during the company’s third-quarter earnings announcement on October 28 to address Biden.

“It has been discussed in the US that our industry is returning a portion of our profits directly to the American people,” Woods said. “That’s exactly what we’re doing in the form of our quarterly dividend.”

The President didn’t like it. tweet his reply hours later: “I can’t believe I have to say this, but giving back to shareholders is not the same as cutting prices for American families.”

Read more: [Over 65% of Americans don’t shop around for a better car insurance deal — and that could be costing you $500 a month

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] to say that I find fault with them, they have not seen anything yet. I’m serious. It angers me.”

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