If there’s something President Joe Biden wanted to make clear during his State of the Union address Tuesday night, it was that he was not making a mortal enemy of the oil and gas sector, as Republicans often proclaim. But if he was speaking out against those companies, he’ll tell you, it’s not his fault—they’re the ones who forced his hand.
“You may have noticed that Big Oil just reported record profits,” Biden said. “Last year, they made $200 billion in the midst of a global energy crisis. I think it is outrageous. Why? They invested too little of that profit to increase domestic production.”
You heard that right: The problem is that the oil companies chose not to increase drilling and refinement at home. That may seem out of place for the president who, just before that “outrageous” comment, was vividly describing the horrors of climate change and the solutions—renewable energy, electric vehicle chargers, resilience measures—that the legislation he’s signed will fund for years to come. But that line about the need for oil wasn’t a fluke.
“The climate crisis doesn’t care if you are in a red or blue state. … I’m proud of how America at last is stepping up to the challenge,” Biden said. “We are still going to need oil and gas for a while,” he continued, to a surprise smattering of Republican applause. “We do!” Biden said. “But there’s so much more to do. We have got to finish the job. And we pay for these investments in our future by finally making the wealthiest and biggest corporations begin to pay their fair share.”
Here’s the thing: The high gas prices that Republicans rubbed in Biden’s face for all of last year are still clearly weighing on him. The president made sure, early in his speech, to mention the fact that gas prices have gone down alongside other inflation indicators. While he didn’t go so far as to endorse the talking point that corporate profits are driving inflation, Biden savvily played the line about “record profits” to answer another question: how we’re going to pay for the costs of rebuilding the devastated Rust Belt and preparing the country for global warming.
“When I talked to a couple of [companies], they said, ‘We are afraid you are going to shut down all the oil refineries anyway, so why should we invest in them?’ We are going to need oil for at least another decade,” Biden said. “Instead, they used those record profits to buy back their own stock, rewarding their CEOs and shareholders. Corporations ought to do the right thing.”
Rather than demonize oil and gas drilling for its harmful environmental effects, Biden attacked corporate greed—and rather than lean on corporations to “do the right thing,” he touted his proposed and passed measures for regulatory measures like a minimum corporate tax, increased fees on stock buybacks, and a billionaire tax. If Biden is punishing the fossil fuel industry, it’s not for its decades-long track of environmental misdeeds and disinformation. Instead, it’s for these corporations’ abuses of the free enterprise system. “Look, I’m a capitalist,” the president said. “But pay your fair share.” Tough climate talk, but make it centrist.
As part of his blue-collar bet, Biden is hoping that if he cushions his energy agenda within unifying rhetoric about economic fairness, he can sidestep conservative hostility toward climate policy and instead widen its mass appeal. His specific point here is that if we tax the heck out of these oil companies, as they rev up profits from the drilling and refining they should be doing to keep energy costs low, then we can use those new revenues to pay for the clean-energy transition and for climate resilience. At the moment, the United States doesn’t have the clean-energy infrastructure it needs to significantly displace fossil fuels. That green-power capacity is now getting built thanks to the bills Biden celebrated on Tuesday night—the infrastructure bill, the CHIPS Act, the Inflation Reduction Act. But in the meantime, the president would like oil companies to ensure American energy remains affordable and available.
Normally, this isn’t a message that would play well with climate hawks, but activists seemed to be pleased, overall, with the State of the Union. “If you’d told us five years ago that the next President of the United States would brag about passing the most significant piece of climate legislation in history at the State of the Union, I’m not sure we would have believed you,” wrote Sunrise Movement executive director Varshini Prakash in a statement. “President Biden’s right—we’ve come a long way, but the job’s not done.” The environmental nonprofit Wilderness Society said it “look[s] forward to supporting” Biden’s vision for “addressing the climate crisis and promoting environmental justice,” while critiquing his administration for encouraging “fossil fuel development on federal public lands and waters.” The Sierra Club embraced the president’s “historic progress,” and Earthjustice was pleased that Biden talked up the Inflation Reduction Act.
Biden’s aim was to craft an energy agenda that pleases environmentalists while getting climate skeptics on board. So far, the left doesn’t seem too pissed off just yet. We’ll see how this plays with the rest of the country.