The White House returned to scolding Big Oil on Thursday as President Biden scrambles to blunt the fallout from an anticipated rise in gas prices following the announcement by OPEC this week that it would cut global oil supplies.
Mr. Biden, who has suffered in the polls amid persistent inflation under his administration, has maintained a simmering feud with oil executives. He chastised the industry over the summer for raking in profits as Americans struggled to fill their tanks.
Prices at the pump have fallen steadily over recent months after hitting a record-high average of $5.01 per gallon in June.
But OPEC’s announcement that it would cut oil production by 2 million barrels per day stands to chip away at Mr. Biden’s goodwill among voters and comes as a significant blow to Democrats who are now bracing for more pain a the pump as voters head to the polls for the November midterms.
White House economic adviser Brian Deese said on Thursday that the White House is looking at a variety of options to deal with the potential rise in prices stemming from OPEC’s decision, but returned to the theme of bashing Big Oil as the administration crafts its next move.
“In the very near term, what we believe needs to happen, consistent with market principles, is that the energy companies need to reduce retail prices to reflect the price that they’re paying for the wholesale case,” he told reporters aboard Air Force One en route to campaign stops in New York and New Jersey.
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“If you look at the gap between wholesale and retail prices, it has come down but it hasn’t come down enough,” he said.
Critics of the administration blamed the spike in part on the president’s focus on green energy initiatives that disincentivized investment in domestic refining capacity.
Oil companies say they have ramped refineries back up to near-full capacity after demand plummeted during the pandemic. Republican lawmakers and oil execs say Mr. Biden has exacerbated the problem with policies that discourage domestic oil production.
In a Federal Reserve Bank of Dallas survey of 132 executives from oil and gas firms released Wednesday, several executives took aim at the administration for policies they say have contributed to high prices.
“The message from the White House, Capitol Hill and Wall Street has been that oil and gas is a dying industry and one that needs to be abandoned,” one executive wrote.
“The administration is still restricting our control on how we operate our wells,” another executive wrote. “The administration has no clue about the oil and gas industry.”
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The Federal Reserve Bank did not identify the executives who provided comments for the survey which was conducted March 9-17 of this year.
The survey found that the key factor restraining growth was investor pressure, with 59 respondents saying that investors expect the companies to maintain capital discipline, while 11 blamed environmental, social and governance issues. Another six blamed government regulations. The remaining respondents blamed a lack of access to financing or “other” factors restraining growth.
Other executives have more publicly pushed back on the administration for singling out Big Oil when prices rise.
Chevron Chairman and CEO Mike Wirth accused Mr. Biden of trying to “vilify” the fossil fuel industry in a tense back-and-forth with the White House in June.
“Addressing this situation requires thoughtful action and a willingness to work together, not political rhetoric,” Mr. Wirth wrote in a letter to the president. “The U.S. energy sector needs cooperation and support from your Administration for our country to return to a path toward greater energy security, economic prosperity, and environmental protection.”
In July, Mr. Biden put gas stations on blast over Twitter, as Americans hit the road for the Independence Day weekend amid skyrocketing prices.
“Bring down the price you are charging at the pump to reflect the cost you’re paying for the product,” he said. “And do it now.”
The comment was met with a torrent of disdain, including from billionaire Jeff Bezos’ who accused Mr. Biden of lacking a grasp of basic economics.
“Inflation is far too important a problem for the White House to keep making statements like this,” Mr. Bezos wrote in reply to the president’s post. “It’s either straight ahead misdirection or a deep misunderstanding of basic market dynamics.”
Mr. Biden has doubled down on his criticism of oil execs in recent weeks amid signs that his gains with voters on lowering gas prices could be at risk.
Last week the president warned oil executives not to use Hurricane Ian as an excuse to “gouge the American people” in a shot across the industry’s bow as Florida braced for the storm.
“If gas companies try to use this storm to raise prices at the pump, I will ask officials to look into whether price gouging is going on,” he said. “America’s watching. The industry should do the right thing.”
He said oil companies “should be moving more quickly now to bring down the price at the pump,” adding that there is “too much of a delay between the price of a barrel of [oil] being produced and the price of gasoline at the pump.”
Mr. Biden has also reserved criticism for Saudi Arabia, a guiding hand behind global oil prices, following Wednesday’s decision.
The president was widely criticized for his visit to the Kingdom in July, where he notoriously fist-bumped Crown Prince Mohammed bin Salman, who U.S. intelligence concluded had directed the killing of Washington Post journalist Jamal Khashoggi.
Mr. Biden told reporters on Thursday that he does not regret the trip, but said he is disappointed with the decision.
“The trip was not essentially about oil. The trip was about the Middle East and about Israel and the rationalization of positions. But it is a disappointment and says that there are problems,” he said.