Nearly four years ago, while campaigning in the runup to the last presidential election, Donald Trump warned that President Joe Biden would “destroy” the oil industry.
As Trump and Biden are set once again to face off in a presidential election, Trump has renewed claims that Biden’s agenda has hurt energy producers, promising to hit rewind on Biden’s environmental policies.
But the oil and gas industry in the United States has thrived under the current president, even as the Biden administration has touted its efforts to transition away from fossil fuels and towards green energy sources.
In the last three and a half years, US oil production — and oil and gas company profits — have broken records.
The top five US-based oil and gas companies by market cap, according to S&P Global — ExxonMobil (XOM), Chevron (CVX), ConocoPhillips (CPP), EOG Resources (EOG) and Schlumberger (SLB) — have raked in more than $250 billion in profits between 2021 and 2023. That’s a 160% jump compared to the first three years of the pro-big-oil Trump administration, according to calculations by CNN.
The energy industry’s recent profit windfall underscores the limited influence of any US president — whether in favor of fossil fuel or not — in the global oil and gas market.
In Biden’s case, many of the dynamics that supercharged oil and gas industry profits during his presidency were not directly related to his administration’s policies: Russia’s invasion of Ukraine, a post-pandemic surge in travel demand and the proliferation of new technology that helped the US significantly increase its production of oil and natural gas all played a role, said Tom Kloza, global head of energy analysis at the Oil Price Information Service.
“On balance, I think it’s been a really, really good atmosphere for most [oil] companies,” said Kloza.
Boon for oil executives and shareholders
According to the US Energy Information Administration, the US produced more crude oil than ever in 2023, beating the previous record set in 2019 — and Investors have been richly rewarded. The Energy Select Sector SPDR Fund (XLE), which tracks the performance of the largest oil and gas companies, is up more than 100% since Biden’s inauguration.
The cash-rich industry has not shied away from dealmaking. Last month, oil giant ConocoPhillips said it would acquire rival Marathon Oil in a deal valued at $22.5 billion. That acquisition comes on the heels of ExxonMobil’s $60 billion purchase of Pioneer Natural Resources and Hess shareholders’ approval of a $53 billion sale to Chevron.
Over the last several years, big oil companies have used profits to purchase their own stock on the open market, lifting share prices. Notably, Chevron announced plans for a $75 billion buyback last year and Exxon said it would ramp up its annual pace of share repurchases to $20 billion per year.
Chevron’s major buyback package drew reproach from the Biden administration.
“For a company that claimed not too long ago that it was ‘working hard’ to increase oil production, handing out $75 billion to executives and wealthy shareholders sure is an odd way to show it,” said White House spokesperson Abdullah Hasan last year.
Shareholders were also paid in the form of dividends. In 2023, ExxonMobil was the third-largest dividend payer in the S&P 500, behind only Microsoft and Apple, according to ExxonMobil CEO Darren Woods.
Many oil CEOs have also grown their own fortunes during the Biden administration. Chevron CEO Mike Wirth saw his compensation grow 17%, from $22.6 million in 2021 to $26.5 million in 2023. Exxon CEO Woods’ compensation rose an eye-popping 56% in that span, from $23.6 million in 2021 to $36.9 million in 2023.
Clean energy push — and pull
In his first term, Trump overturned more than 100 environmental rules and actions put in place by the Obama administration.
In April, Trump allegedly promised oil industry executives that he would reverse some of Biden’s climate policies in exchange for a $1 billion contribution to this reelection campaign, according to an exclusive report from The Washington Post.
While climate advocates say Biden’s record regarding the climate crisis and clean energy is mixed, Biden delivered on the largest climate investment in US history—by far the biggest legislative win for the environmental movement since the Clean Air Act.
On his first day in the White House, Biden revoked a permit that his predecessor, Trump, had granted to the controversial Keystone XL pipeline and placed a temporary moratorium on oil and gas leasing in the Arctic.
“The era of supporting fossil fuels, even as a temporary bridge to a clean future, is over,” Bob McNally, president of consulting firm Rapidan Energy Group told CNN at the time.
Additionally, the Biden administration has taken steps to try to nudge the auto industry away from using gas-powered cars, like rolling out new tailpipe emissions standards and revamping electric vehicle tax credits.
Earlier this year, Biden announced a temporary pause on approving several pending liquefied natural gas export projects, saying “This pause on new LNG approvals sees the climate crisis for what it is: the existential threat of our time.”
The energy industry has taken note. This year, members of the oil and gas industry have largely donated to Republican candidates and conservative groups, according to Open Secrets.
However, in March, the Biden administration approved ConocoPhillips’ massive Willow oil drilling project on Alaska’s North Slope, which holds around 600 million barrels of oil, angering climate advocates.
Despite his mixed record with oil and gas companies, though, Biden has presided over a historic run for the industry, Kloza said.
“The oil industry in general, and this is true from the wellhead to the refinery to the gas pumps, is much, much more prosperous in the last 10 years than it was in any 10-year period prior,” Kloza said. “It’s just been a renaissance.”