Biden Takes Climate Victory Lap, Slams Big Oil

February 08, 2023

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by Nico Portuondo (E&E News/Politico Pro) President Joe Biden focused his address on the Inflation Reduction Act, the Infrastructure Investment and Jobs Act and the CHIPS and Science Act, while sparring with Republicans on energy policy. -- ... The president touted money to replace lead pipes for 10 million homes, increased domestic semiconductor chip production and 500,000 new electric vehicle charging stations across the country. READ MORE

Remarks of President Joe Biden – State of the Union Address as Prepared for Delivery (The White House)

Biden Goes Off-Script to Concede Oil Demand Will Last for Years: Biden blasts oil companies for buybacks in State of the Union; Industry blames anti-oil rhetoric for deterring investment (Bloomberg; includes VIDEO)

Mr. President, We Will Need Oil For Much Longer Than 10 More Years (Forbes)

Biden’s Nod to Enduring Oil Demand Sets Stage for COP28 -- The US president has energy security front of mind, and that’s something we’ll see from major economies across the world this year. (Bloomberg)

As oil surges, BP pares back its climate goals -- The oil giant announced Tuesday that it would lower its emissions targets and curb its plans to reduce oil production. Experts called the move a "cautionary tale" of how pressure from shareholders and soaring oil and gas profits can undercut long-term climate goals. (Climatewire/Politico Pro)

BP, in a Reversal, Says It Will Produce More Oil and Gas -- The company said global concerns about energy security had prompted the change, as it reported record profits for 2022. (New York Times)

‘We Are Going to Need Oil…At Least Another Decade,’ Biden Says (Natural Gas Intelligence)

Biden: Oil and gas are ‘not going to all go away’ -- President Joe Biden knocked oil companies’ profits in a speech Tuesday as he said, “We’re gonna need oil for a long time, gas for a long time.” (E&E News)

Excerpt from Forbes: But then President Biden went off script.

He said that he had pressed oil executives on the issue of increasing investments, and he said they told him: “We’re afraid you’re going to shut down all of the oil wells and all the oil refineries anyway so why should we invest in them?”

President Biden said he responded: “We’re going to need oil for at least another decade.” The chamber burst into laughter, and then Biden quickly added, “and beyond that.”

I think this attitude explains the seeming disconnect in the President’s stance toward oil and gas companies. He and some of his advisors really believe we are going to rapidly phase out oil. He views that as absolutely necessary to address climate change. Thus, in his mind the oil industry’s relevance is going to soon fade, so there’s no harm in using them as his foil by blaming their high profits for high gasoline prices.

The reality is that we are going to need oil for a lot longer than another decade. Never mind that there is nothing in the pipeline that is going to displace air traffic a decade from now. There may be some minor dent in petroleum used in marine traffic by then, but most ships will still run off of oil in a decade.

During President Biden’s 2023 State of the Union Address, he relayed an anecdote that I believe explains his stance toward the oil and gas industry. At first, he stayed on script with his prepared remarks, claiming:

“You may have noticed that Big Oil just reported record profits. Last year, they made $200 billion in the midst of a global energy crisis. It’s outrageous. They invested too little of that profit to increase domestic production and keep gas prices down. Instead, they used those record profits to buy back their own stock, rewarding their CEOs and shareholders.”

As I have noted previously, oil companies made substantial increases in capital budgets last year as oil prices rose. The number of rigs drilling for oil has risen sharply, and U.S. oil production last year hit the second-highest level on record. But, President Biden — who strongly believes we need to bring down our climate emissions — doesn’t think we are investing enough in producing more oil, even though 2023 may set a new record for U.S. oil production.

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But the widespread perception seems to be that electric vehicles (EVs) are going to substantially displace combustion vehicles a decade from now. That view is also not supported by facts.

U.S. EV share reached 6% of all new vehicle sales last year. The goal is to reach 50% by 2030 — just seven years from now. But that’s new car sales. The number of EVs on the road in 2022 was only about 1%.

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So, make no mistake. We aren’t going to just need oil a decade from now. We are still going to be overwhelmingly dependent on oil a decade from now. Our energy policies should reflect this reality.

Go ahead and aggressively try to speed up this transition, but also recognize that oil will still be our most important commodity in a decade; probably even two decades from now. The Biden Administration should recognize this and cease the hostility toward this critically important U.S. industry. READ MORE