President Biden is ramping up his criticism of the oil industry ahead of the midterms and amid major profits for the sector.
Meanwhile, the U.S. and UAE are looking to spur investment in green energy, and the leader of the UK is reconsidering attending a global climate summit.
Biden seizes on oil profits before Election Day
The Biden administration is seizing on huge earnings calls from oil companies as it seeks to give voters a response to relatively high gasoline prices ahead of next week’s midterms.
President Biden has repeatedly sought to place blame on the industry for the high prices, but has ramped up his rhetoric in the wake of massive earnings.
And while analysts say that large parts of the price are set by the global oil market, not by individual companies, the optics of massive profits while Americans struggle with inflation gives the administration something to cling to.
In total, seven of the largest oil and gas companies combined raked in a total of tens of billions of dollars in third-quarter profits, according to recent earnings reports.
“If these companies were taking average profits on refining, instead of the profits they’re making today, gas prices would come down around 50 cents,” Biden tweeted Tuesday.
Some of the numbers:
- BP on Tuesday reported $8.2 billion in third-quarter profits, up from $3.3 billion during the same period last year. The British oil giant announced it would boost its stock buybacks to a total of $8.5 billion this year and pay around $800 million in new windfall taxes enacted by the U.K.
- Last week, ExxonMobil reported a record $19.7 billion in quarterly earnings, while Chevron and Shell also posted big numbers — $11.2 billion and $9.5 billion, respectively.
- Other energy titans reported huge earnings Tuesday. Marathon Petroleum posted a $4.5 billion profit, an increase of nearly 550 percent compared to last year’s third quarter. Phillips 66 reported $5.4 billion in third-quarter profits, a 1,000 percent year-over-year increase.
Biden, during a speech on Monday, criticized the high earnings as a “windfall of war” citing the impact of Russia’s invasion of Ukraine on driving up oil prices. He threatened a “higher tax on their excess profits” and unspecified “other restrictions” if the companies do not increase production.
THE POLITICAL BACKDROP
Democrats are struggling to craft a winning midterm message as voters increasingly cite inflation as their top issue ahead of abortion and other topics ahead of Election Day.
- Prices rose 8.2 percent over the last year ending in September, driven by massive price hikes for gas, rent and food that are draining Americans’ paychecks.
- Biden has repeatedly sought to put blame on the oil industry, and has called on companies to drill more.
Tom Kloza, global head of energy analysis at the Oil Price Information Service, said oil producers have been “conservative” in their approach to new production, despite recent high prices, as there’s risk of fluctuation.
“Oil shale growth has not progressed on the path that a lot of people thought it would,” he said.
“I don’t think they’re breaking any laws, but almost every one of them has been very, very judicious, not wanting to go through another boom and bust period,” he added of industry.
Kloza said that industry — and he particularly discussed oil refiners — is benefiting from the current situation. But, he described it as similar to high profits made by various industries under capitalism, rather than something that’s unique to oil.
“Sometimes capitalism can have some real excesses in terms of what people make and what profits are rendered. That’s true probably for pharmaceutical companies. It was true in the old days with cigarettes and it’s true these days with fuel,” he said.
US, UAE aim to spur $100B in clean energy financing
The United States and United Arab Emirates are partnering on an effort to spur $100 billion in clean energy financing in both countries and the developing world, the White House announced on Tuesday.
The new Partnership for Accelerating Clean Energy (PACE) has the goal of deploying 100 gigawatts of clean energy globally by 2035 and is focused on the development of low-emission energy sources.
PACE is built on four pillars: clean energy innovation, deployment and supply chains; carbon and methane management; nuclear energy; and industrial and transport decarbonization.
- The U.S. and UAE plan to set up an expert group to measure progress in achieving the goal to catalyze $100 billion in investment.
- The U.S. and UAE will put together a group of experts who will aim to pick priority projects and remove possible hurdles.
A press release from the UAE said that the effort will involve putting together both private and public funding.
White House press secretary Karine Jean-Pierre said in a statement on PACE that Biden is preparing to travel to Egypt for COP27, the annual United Nations climate conference that starts on Nov. 6.
The UAE will be hosting COP28 in 2023.
UK PRIME MINISTER RECONSIDERS COP ATTENDANCE
British Prime Minister Rishi Sunak’s office signaled he may still attend the COP27 climate summit, set to begin this weekend in Egypt, days after saying the prime minister would not be there.
On Thursday, a spokesman for 10 Downing St. told the BBC that the newly minted prime minister would not attend the United Nations summit, citing “other pressing domestic commitments.”
However, on Monday, Sunak’s office seemingly backtracked, telling the broadcaster Sunak’s plans were “under review.”
“The prime minister is focused on pressing domestic issues, most significantly preparing for the autumn statement, so any attendance at COP would depend on progress on preparation for that fiscal event, and that work is ongoing,” the spokesperson said. “The prime minister fully recognizes the importance of the COP summit and is fully committed to addressing climate change.”
Appearing on the broadcaster’s morning show “BBC Breakfast,” British Environment Minister Mark Spencer said “the U.K.’s very keen to play its part,” adding “if [Sunak’s] diary allows, he would want to go.” Spencer was noncommittal when the BBC’s Jon Kay asked if he was “softening us up for a U-turn.”
WHAT WE’RE READING
- U.S. regulators want more data on Texas Freeport LNG plant before restart (Reuters)
- What on Earth: How Phony Environmentalism Came to Sports (Sports Illustrated)
- Nothing will change on climate until death toll rises in west, says Gabonese minister (The Guardian)
- EPA determines water in Jackson, Mississippi, is safe to drink two months after treatment plant failure (CNN)
🚇 Lighter click: News for your holiday travel!
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