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Big Oil Is Not Entirely Behind Trump

Donald Trump's environmental policy can be summarized in three words: Drill, baby, drill. So you might think all the oil company executives would be shoveling money into his campaign as fast as they can. Actually, it's more complicated than that. Yes, they like the three-word environmental policy, but they are also afraid that Trump will put steep tariffs on all imported goods, which will get other countries to respond in kind, which will start a global trade war. Oil companies export lots of petroleum products and don't want their foreign markets eliminated.

In addition, oil company executives are not entirely negative on Joe Biden. The IRA (Inflation Reduction Act) contains subsidies for oil companies to capture and store carbon dioxide, which they are eager to use. Also, the transition to green energy is not going to happen at scale without billion-dollar investments in new technology. The oil companies are in a good position to provide the capital and are motivated to get into a new business with a brighter future than fossil fuels.

Darren Woods, CEO of ExxonMobil said: "I was very supportive of the IRA—I am very supportive of the IRA—because as legislated the IRA focuses on carbon intensity and in theory is technology-agnostic. They're not trying to pick a particular technology." Mike Sommers, CEO of the American Petroleum Institute, said his trade group would actively oppose any attempt by Trump to scrap the green energy subsidies in the IRA. Sommers is also worried about Trump's proposed tariffs, which he believes will stifle free trade, which he supports. So all in all, the oil industry is definitely not in the tank for Trump. The oil executives see which way the wind is blowing and want to be in the right place as the green energy transition, which they know is inevitable, plays out. (V)

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