In his State of the Union speech this month, President Joe Biden criticized the big profits the big oil companies generated last year, failing to mention how the oil companies’ success was much needed in a year when many other stocks and bonds slid in value.
“Have you noticed, Big Oil just reported its profits, record profits. Last year, they made $200 billion in the midst of a global energy crisis. I think it’s outrageous,” Biden said. “Why? They invested too little of that profit to increase domestic production. And when I talked to a couple of them, they say, ‘We were afraid you were going to shut down all the oil wells and all the oil refineries anyway, so why should we invest in them?’ I said, ‘We’re going to need oil for at least another decade … and beyond that. We’re going to need it, production.”
The number Biden used—$200 billion—correlates with the profits of the five major oil companies combined, as Barrons.com reported Wednesday. Those companies are Shell, Chevron, ExxonMobil, bp and TotalEnergies. Together, they reported net profits of over $150 billion in 2022, according to Barron’s. The total could have been $200 billion without withdrawals from Russia, Barron’s said.
But Biden only told one side of the story. He could have recognized some of the companies for their leadership in alternative energies, a concept he greatly endorses. bp, for one, appears to be on Biden’s side with its investments in electric vehicle chargers, as CSP Daily News reported Tuesday. The oil company has even embraced the motto of "Reimagining Energy."
Instead of applauding bp and others for their strong financial performances, he criticized the global energy leaders for making large profits in 2022, despite the fact too few public companies in other industries reported improved results. He criticized bp’s decision to share its wealth by increasing its dividend payments to stockholders, including retirees who rely on dividends as income, while calling himself a capitalist.
He promoted the Inflation Reduction Act, including its tax credits for EV cars and its clean energy plan, but he didn’t discuss how the move to green energy could affect the nation’s convenience-store operators and hundreds of millions of consumers who have made their own investments in gasoline and gas-powered vehicles.
Biden likely alienated many business people—not least convenience-store owners and fuel-station operators—when he suggested oil might not be necessary in the future. C-store owners who plan ahead for the growth of electric vehicles could position themselves for success in the future, but gauging how many chargers to make room for and when to add them remains pure guesswork.
As new state-of-the-art charging stations reduce the amount of time required to charge electric vehicles, charge-ups instead of fuel-ups will become more feasible. Just think of how convenience store operators might capitalize on the extra minutes drivers spend at their sites in the backcourt if EVs are the future.
But even as the president leans on the Inflation Reduction Act, which will aid that transition, gas pumps are unlikely to disappear any time soon.
Click here to read more about the Inflation Reduction Act. Above, the president is pictured driving an electric Ford F-150 Lightning in Dearborn, Michigan, on May 18, 2021.
Ann Meyer is fuels and technology editor for CSP. Reach her at ameyer@winsightmedia.com.