Biden and Chevron boss exchange harsh words on gas prices

WASHINGTON (AP) — In a pointed back-and-forth, the Chevron boss complained on Tuesday that Chairman Joe Biden has smeared energy companies at a time when gas prices are at near-record levels and the chairman responded that the oil company’s CEO was being “lightly confidential.”

In recent weeks, the president has criticized oil producers and refiners for maximizing profits and making “more money than God” rather than ramping up production in response to higher prices as the economy recovers from the pandemic and feels the effects of the Russian invasion of Ukraine.

Michael Wirth, chairman and CEO of Chevron, sent Biden an email letter on Tuesday saying the chairman’s own words were self-defeating in terms of encouraging companies to increase production.

Chevron is investing in more production, wrote Wirth, but “its management has sought to criticize and, at times, defame our industry. These actions are not beneficial in 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,” wrote Wirth. “The American people rightly expect our country’s leaders and industry to address the challenges they are facing in a serious and resolute manner.”

Asked about those comments, Biden showed no sympathy.

“He’s mildly sensitive,” Biden said. “I didn’t know they would hurt his feelings so quickly. Look, we need more refining capacity. This idea that they don’t have oil to drill and bring up is just not true.”

Average gas prices are nearly $5 a gallon nationwide, a pressure for commuters and a political albatross for Biden Democrats heading into the midterm elections. That left the White House scrambling for solutions, including a possible suspension of the federal gas tax of 18.4 cents per gallon. Biden plans to decide by the end of the week whether the tax should be lifted, a move aimed at easing pricing pressures that would need approval from a reluctant Congress.

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

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.

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

Schiff said in a statement that he had reached out to the White House to encourage a gas tax exemption, adding: “But we shouldn’t stop there. We should also hold oil majors accountable for the price manipulation that is driving prices up in the first place.”

The House passed legislation to crack down on alleged price manipulation by oil companies, but the bill is stalled in the Senate. Democratic proposals to impose a “window profits” tax on oil producers generated 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 challenges.

In a speech Tuesday at the Economic Club of New York, a non-profit, nonpartisan business group, Target CEO Brian Cornell called the gas tax exemption a temporary “mini-stimulus” that doesn’t do much good. nothing to fundamentally change 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, the gas holiday will only fuel demand. It is not doing anything to increase supply.”

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

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

White House Press Secretary Karine Jean-Pierre told reporters the administration is looking at all possible ways to provide consumers with some relief at the gas pump. But the administration does not plan to tell Americans to drive less during the July 4th holiday and reduce some of the supply pressures.

“Americans will do what they think is right for themselves and their family,” Jean-Pierre said. “This is not something for us 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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