Biden, Chevron boss, exchanges harsh words about gas prices

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WASHINGTON (AP) — In a back-and-forth back-and-forth, Chevron’s chief executive Tuesday complained that President Joe Biden had vilified energy companies at a time when gasoline prices are near record highs, and the president responded that the CEO of oil company “mild” is sensitive.”

The president has in recent weeks slammed oil producers and refiners for maximizing profits and making “more money than god” instead of ramping up production in response to higher prices as the economy recovers from the pandemic and the impact of Russia’s invasion of Ukraine.

Michael Wirth, Chevron chairman and CEO, emailed Biden a letter Tuesday saying the president’s own words had been self-destructive to encourage companies to increase production.

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

The oil company’s CEO said he would like 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 with seriousness and determination.”

When asked about these comments, Biden showed no sympathy.

“He’s slightly touchy,” Biden said. “I didn’t know her feelings would be hurt so easily. Look, we need more refining capacity. This notion that they don’t have oil to drill and produce is just not true.”

Average gasoline prices nationwide are nearing $5 a gallon, a burden for commuters and a political albatross for Biden’s Democrats heading into the midterms. That has led the White House to seek solutions, including a possible suspension of the 18.4-cent-per-gallon state gas tax. Biden plans to decide by the end of the week whether to suspend the tax, a move meant to ease price pressures and so forth would require approval from a reluctant Congress.

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

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

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

Schiff said in a statement that he had been in touch with the White House to promote the gas tax exemption, adding, “But we shouldn’t stop there. We should also blame Big Oil for the price gouging that is driving prices up in the first place.”

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

The possibility of a gas tax exemption has been criticized by economists and the business community for failing to solve underlying supply problems.

In a speech Tuesday to the Economic Club of New York, a nonprofit, nonpartisan business group, Target CEO Brian Cornell called the gas tax exemption a temporary “mini-stimulus” that doesn’t 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 does nothing to increase supply.”

Harvard University professor Jason Furman, a former top economist in the Obama White House, said suspending the gas tax would not address supply pressures.

“Refiners are now even more constrained so supply is almost completely inelastic,” he wrote on Twitter. “Most of the 18.4 cent reduction would be pocketed by industry — with maybe pennies being passed on to consumers.”

White House press secretary Karine Jean-Pierre told reporters that the government is investigating as many ways as possible to give consumers some relief at the pump. But the administration has no plans to tell Americans to drive less and ease some of the supply pressures during the Fourth of July holiday.

“Americans will do what they see fit for themselves and their families,” said Jean-Pierre. “It’s not something we can judge.”

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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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