Feb 7, 2023
Biden Goes Off-Script to Concede Oil Demand Will Last for Years
(Bloomberg) -- President Joe Biden went off-script during an otherwise climate-friendly State of the Union speech Tuesday night to acknowledge an uncomfortable reality for the White House: “We’re still going to need oil and gas for a while.”
The unusual assessment from the president, slipped twice into his address and not included in prepared remarks circulated beforehand, lays bare the conflict between his administration’s climate and economic goals. Biden has repeatedly exhorted oil companies to invest in pumping more crude even as he seeks to end its use.
Biden’s speech also underscored the still-simmering tension between Biden and US oil companies. He once again blasted them for using record profits to buy back stock — “rewarding their CEOs and shareholders” — instead of plowing that money into more drilling to increase production and “keep gas prices down.”
Biden said oil executives he’d pressed on the issue had told him bluntly: “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?”
Biden offered his answer Tuesday night. “We’re going to need oil for at least another decade,” he said, quickly adding, “and beyond that,” after boos from some lawmakers.
Biden’s comments offered only partial comfort to some oil industry representatives who have insisted they need more encouraging signals from Washington about the enduring need for fossil fuels in order to lure more capital and drive investments that take decades to pay off.
“The president is right that Americans and the world will continue to need affordable, reliable energy for decades to come,” Ben Marter, vice president of the industry’s top lobbying group, the American Petroleum Institute, said by email. “So why attack the industry working day and night to provide it?”
Biden called on Congress to quadruple a new tax on corporate stock buybacks, saying that would encourage more long-term investments. The push dovetails with California Governor Gavin Newsom’s proposal to slap a windfall-profits tax on refineries.
By continuing “to politicize market fundamentals and single out stock buyback programs,” the president is overlooking how his “own policies discourage the reinvestment of earnings back into the US liquid fuel supply chain,” said Chet Thompson, president of the American Fuel and Petrochemical Manufacturers trade group. It’s “counterproductive” to explore new taxes “at a time when more supply is what’s needed.”
(Updates with tax proposal and comment from refining group starting in eighth paragraph.)
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