Biden, Chevron chief trade sharp words over gas prices

WASHINGTON (AP) — In a sharp back-and-forth, the Chevron chief complained on Tuesday that President Joe Biden vilified energy companies at a time when gasoline prices are at near record highs and the president replied that the CEO of the oil company was “slightly sensitive.”

In recent weeks, the president has criticized oil producers and refiners for maximizing profits and making “more money than god”, rather than increasing production in response to higher prices as the he economy is recovering from the pandemic and feeling the effects of the Russian invasion of Ukraine.

Michael Wirth, Chevron’s chairman and CEO, emailed Biden a letter on Tuesday saying the president’s own words have been doomed in terms of encouraging companies to increase production.

Chevron is investing in more production, Wirth wrote, but “your administration has largely sought to criticize, and sometimes vilify, our industry. These actions are not beneficial to addressing the challenges we face and are not what the American people deserve. »

The oil company’s CEO said he wanted a more cooperative relationship with the government.

“Let’s work together,” Wirth wrote. “The American people rightly expect our nation’s leaders and industry to address the challenges they face in a serious and resolute manner.”

Asked about those comments, Biden showed no sympathy.

“He’s slightly sensitive,” Biden said. “I didn’t know they would be hurt so quickly. Listen, we need more refining capacity. This idea that they have no oil to drill and pull up just isn’t true.

Gasoline prices average nearly $5 a gallon nationwide, a squeeze on commuters and a political albatross for fellow Biden Democrats gearing up for the midterm elections. That left the White House scrambling for solutions, including a possible suspension of the federal gasoline tax of 18.4 cents a gallon. Biden plans to decide by the end of the week whether the tax should be suspended, a move intended to ease price pressures and that would need approval from a reluctant Congress.

The gas tax funds highways, but Biden said Tuesday that any revenue loss would not have a major impact on road construction due to the year’s $1 trillion infrastructure bill. last.

The clash between the Biden administration and oil producers and refiners unfolded ahead of a Thursday meeting that Energy Secretary Jennifer Granholm will hold with energy companies.

House Speaker Nancy Pelosi and Republican Senate Leader Mitch McConnell have previously expressed skepticism about the benefits of the gas tax suspension. But Rep. Adam Schiff, D-California, is sponsoring a bill that would suspend the gas tax until the end of 2023.

Schiff said in a statement that he had been in contact with the White House to encourage the gas tax exemption, adding, “But we shouldn’t stop there. We should also hold Big Oil responsible for the price spike that drives prices up in the first place. »

The House approved legislation to crack down on alleged price gouging by oil companies, but the bill stalled in the Senate. Democratic proposals to impose a “windfall profits” tax on oil producers have garnered little support in Congress.

The possibility of a gas tax exemption has drawn criticism from economists and the business community for failing to address underlying supply issues.

In a speech Tuesday at the Economic Club of New York, a nonprofit, nonpartisan business group, Target CEO Brian Cornell called the gas tax exemption “a mini temporary “stimulus” that does nothing to fundamentally alter the supply and demand curve for fuel and transportation.

“We have a classic supply and demand challenge,” Cornell told the audience. “With all due respect, gas holidays will only fuel demand. It does nothing to increase supply.

Harvard University professor Jason Furman, a former chief White House economist for Obama, said a gas tax suspension would not solve supply pressures.

“Refineries are even more constrained now so supply is almost totally inelastic,” he wrote on Twitter. “Most of the 18.4 cent reduction would be pocketed by industry, with perhaps a few pennies passed on to consumers.”

White House press secretary Karine Jean-Pierre told reporters the administration was looking at as many ways as possible to provide relief to consumers at the gas pump. But the administration does not plan to tell Americans to drive less during the July 4 holiday and ease some of the supply pressures.

“Americans are going to do what they think is right for them and their families,” Jean-Pierre said. “It’s not something we have to pass judgment on.”

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AP reporters Matthew Daly in Washington and Anne D’Innocenzio in New York contributed to this report.

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