Biden’s climate allies ramp up attacks on Big Oil ahead of earnings

Biden’s climate allies ramp up attacks on Big Oil ahead of earnings

The green group Climate Power plans to seize on this week’s earnings reports from major oil and gas companies to blame them for high gas prices.

Why it matters: The $3 million ad campaign, encompassing broadcast TV, digital and billboards, is another indication that President Biden’s allies know gas prices will be a key factor in the midterm elections.

Details: “This is why you’re paying $5 at the pump,” says the narrator of an ad titled “Guess What.” “Oil company CEOs see an opportunity to charge more.”
• The TV and digital ads will initially appear in media markets in Nevada, Arizona, Virginia and Colorado where Democratic incumbents — in both the House and Senate — need to hold on to independent voters.
• The group will also rent billboards near gas stations in places like Phoenix, Las Vegas, Philadelphia, Milwaukee and Orange County, California. Inflation is hitting battleground states like Arizona and Nevada harder.

Driving the news: Companies like Exxon Mobil and Valero Energy will be releasing their second-quarter earnings reports this week. Exxon has estimated its quarterly profit could set a record at around $18 billion.

Between the lines: While energy analysts and economists can patiently explain the “rockets & feathers” phenomenon — where crude oil prices rise like a rocket, while gas prices fall like a feather — Democrats remain outraged that the two prices don’t move in more synchronized ways.

The big picture: The Biden administration and the oil companies have been engaged in chippy back-and-forth on who is to blame for high gas prices, which climbed above $5 per gallon in June but have since dropped to around $4.36, according to AAA.
• “We’re going to make sure everybody knows Exxon’s profits,” Biden said in June. “Exxon made more money than God this year.”
• In addition to publicly accusing them of profiteering, Biden has directed his energy secretary to meet with them on ways to lower gas prices.

The other side: The oil and gas industry has bristled at the White House’s rhetoric and repeatedly called on Biden to pursue more domestic oil and gas exploration, including with its own ads.
• “We urge the president to prioritize unlocking U.S. energy resources — that are the envy of the world — instead of increasing reliance on foreign sources,” Mike Sommers, the president of the American Petroleum Institute, wrote in June.
• The oil lobby also says the White House fundamentally misunderstands how prices at the pump are determined.

The intrigue: When the Interior Department announced its five-year plan for offshore drilling this month, Biden officials were open to new leases in the Gulf of Mexico and parts of Alaska, but ruled out drilling on the East and West coasts.
• Some climate groups cried foul and criticized the plan.

Go deeper: In February, Climate Power and other environmental groups launched a $3 million campaign ahead of Biden’s State of the Union address to try to revive the green energy provisions in Biden’s Build Back Better agenda.
• The prospects for any climate spending are lower now, however, after Sen. Joe Manchin (D-W.Va.) said he wanted to wait to gauge how hot inflation is running before committing to the $300 billion he has previously supported. But there’s a sliver of hope within the White House that Manchin can still be convinced.
• In June, climate groups announced a plan to spend some $100 million to mobilize voters on climate issues, CNN reported.

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