Biden Administration's Clean Energy Transition Goals
Fossil Fuel Industry Profits Soar
Negative Achievements for Biden Seeking Reelection
COVID-19 and Russia-Ukraine War Variables Also Cited
During the three years of the Biden administration, which emphasized the transition to clean energy in its energy policy, the operating profits of major fossil fuel companies increased about threefold compared to the Trump administration. Critics argue that this is an achievement that President Joe Biden, who is seeking a second term in the upcoming U.S. presidential election this November, would rather keep hidden.
Operating Profits of Fossil Fuel Industry Tripled Under Biden Administration
According to S&P Global Market Intelligence on the 27th (local time), the total operating profit of the top 10 U.S. fossil fuel companies by market capitalization, including oil and natural gas, from 2021 to last year (the first to third years of Biden’s presidency) was estimated at $313 billion. This represents a 180% increase compared to the operating profit ($112 billion) of the top 10 fossil fuel companies during the first three years of the Trump administration. The top 10 fossil fuel companies refer to ExxonMobil, Chevron, ConocoPhillips, EOG Resources, Pioneer, Occidental Petroleum, Hess, Devon Energy, Diamondback Energy, and Coterra Energy.
With increased profitability leading to record dividends, the market capitalization of the top 10 fossil fuel companies grew to $1.1 trillion in just two years under the Biden administration, more than doubling. This contrasts with the 12% decrease in market capitalization of the top 10 fossil fuel companies by the third year of the Trump administration.
Under the Biden administration, record levels of oil and natural gas have been produced on U.S. soil. In November last year, U.S. oil production reached 13.3 million barrels per day, surpassing the previous record set in November 2019. In December of the same year, natural gas production also exceeded 105 billion cubic feet per day for the first time. The U.S. surpassed Qatar last year to become the world's largest liquefied natural gas (LNG) exporter.
Environmentalists Criticize... “It Could Not Be Helped” Defense
This has been evaluated as contradictory to President Biden’s agenda, which promised a transition to green energy since the 2020 election. Some see this as a factor that could negatively impact Biden’s path to re-election due to the potential loss of voters concerned about the climate crisis. Major foreign media pointed out that “Biden’s campaign has been reluctant to promote the success of the (fossil fuel) industry for fear of backlash from progressive Democrats, which explains the critical voices.” A representative example is when, amid the surge in international oil prices in 2022, President Biden pressured ExxonMobil by saying it “made more money than God” and considered imposing a so-called windfall tax.
However, there is also a defense that uncontrollable external factors existed during the Biden administration. The COVID-19 pandemic in 2020 and Russia’s invasion of Ukraine in 2022 had significant impacts. Analysts note that global energy demand strongly rebounded during the transition to an endemic phase of the pandemic, and the importance of energy security was greater than ever due to the war. The price of West Texas Intermediate (WTI), the U.S. crude oil benchmark, averaged about $80 per barrel during Biden’s three years in office, a 38% increase compared to $58 per barrel during the Trump administration. Paul Bledsoe, a former climate advisor to the Bill Clinton administration, said, “(After COVID-19 and the Russia-Ukraine war) President Biden simply produced record amounts of oil and natural gas to curb inflation,” adding, “As a Democratic president, he could not have done better.”
Recently, Biden’s tightening regulations on fossil fuels have become a variable for the industry. Last month, the Biden administration halted approvals for new LNG export facility constructions, drawing industry backlash. This move is also interpreted as an effort by President Biden, ahead of the election, to strengthen his image as someone focused on green energy.
Trump: “Strong Support for Fossil Fuel Industry”
On the other hand, former President Donald Trump, a leading Republican presidential candidate, has made full support for the fossil fuel industry a key pledge. Trump has vowed to repeal the Inflation Reduction Act (IRA) introduced by Biden, which centers on $400 billion worth of green tax credits and subsidies.
Fossil fuel companies are also hoping for a Trump administration comeback. According to the political finance tracking group OpenSecrets, since the 2020 election, the Republican Party has raised $126.4 million in campaign contributions from the industry, while the Democratic Party has only raised $23.6 million. Mike Sommers, president of the American Petroleum Institute, stated, “Under the current administration, the industry faces potentially fatal regulations every week,” and claimed that “the Democrats are sowing the seeds for future production declines.”
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