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The Early 202

An essential morning newsletter briefing for leaders in the nation’s capital.

Worried Democrats poised to pin blame for high gas prices on oil companies

The Early 202

An essential morning newsletter briefing for leaders in the nation’s capital.

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In today’s edition: Alabama is once again the battleground over Black voting rights ... Michigan Democrats are pushing to make their state the first presidential nominating contest in 2024 ... Connie Conway (R) advances to runoff to replace former Devin Nunes ... NATO ministers to meet in Brussels today, and U.S. and E.U. to toughen sanctions … but first ...

On the Hill

A tradition unlike any other… Democrats and oil companies square off over gas prices

Lawmakers fed up with high gas prices will get the chance to vent their frustrations this morning as the chief executives of six major oil companies hit the Hill.

The House Energy and Commerce Committee hearing is the latest effort by Democratic lawmakers and the Biden administration to demonstrate to voters that they’re working to bring down prices at the pump amid fears in the party that inflation could contribute to heavy losses in the midterm elections.

President Biden has placed much of the blame on Russian President Vladimir Putin, but Democrats increasingly have gone after the oil and gas industry as well.

Progressives introduced a bill last month to tax oil and gas companies’ profits and send the money to consumers as a rebate. Democrats have criticized their stock buybacks. Biden has urged the Federal Trade Commission to investigate the industry’s “anti-consumer” behavior.

And Democrats are talking more and more about what they call oil and gas companies’ “price gouging.”

Rep. Mike Levin (D-Calif.) told our colleagues Marianna Sotomayor and Tony Perry that he tells voters there are “three Ps” to blame for gas prices that in his district top $6 a gallon: the pandemic, Putin and price gouging.

The name of this morning’s hearing: “Gouged at the Gas Station.”

“We are here today to get answers from the Big Oil companies about why they are ripping off the American people,” Rep. Frank Pallone (D-N.J.), the committee’s chairman, will say this morning, according to prepared remarks shared with the Early.

The industry’s message for lawmakers: It’s not our fault.

“I want to be absolutely clear,” Michael Wirth, Chevron’s chief executive, will tell the committee this morning, according to his prepared testimony. “We do not control the market price of crude oil or natural gas, nor of refined products like gasoline and diesel fuel, and we have no tolerance for price gouging.”

The gas price playbook

Blaming the oil industry for vertiginous gas prices is an esteemed Washington tradition.

“Republican presidents do it,” said Robert McNally, a former energy adviser in George W. Bush’s White House who now runs a consulting firm. “Democratic presidents do it. To my knowledge, there’s never been any gouging found.”

But Biden has been more aggressive than his predecessors, according to McNally.

“The president’s tweets and comments go beyond anything I recall from any previous president,” he said.

The oil industry has complained that some Democrats pleading with them to step up production have chastised them in the past for exacerbating the climate crisis by drilling too much.

When four of the six executives testifying today appeared before the House Oversight and Reform Committee in October, Rep. Ro Khanna (D-Calif.) grilled them on why some of them weren’t moving faster to slow down production.

“Fast forward to today, and now the question is, ‘Why aren’t you producing oil and gas?’” said Mike Sommers, the president and chief executive of the American Petroleum Institute.

The gouging argument

Khanna, who introduced the bill to tax Big Oil companies’ windfall profits last month with nine other House Democrats, says he supports ramping up oil production in the short run but switching to renewable energy over the long term.

In an interview, Khanna said it was fair to describe oil companies’ behavior as price gouging — a term he recently researched on Wikipedia — even if it didn’t meet the legal definition of the phrase.

“As I understand it, price gouging is a sudden increase in price in a way that is not reasonable,” he said. “And here you have gas increase 46 percent over this year. That’s a sudden increase in price. So I would argue it’s certainly price gouging.”

Biden's concerns, meanwhile, are rooted in the fact that the price of gas has been slower to fall in recent weeks than the price of oil, according to a White House official.

“We continue to see prices at the pump jump up as soon as oil prices rise, but then take far too long to come down when oil prices fall,” the official wrote in an email to the Early. “That’s why the President called for the FTC investigation, and he will use all tools at his disposal to try to fix this dynamic.”

Midterm concerns

Some House Democrats from oil-producing states fret that rushing to blame the industry could hurt the party in the midterms.

When former president Donald Trump and Republican congressional candidates outperformed expectations in South Texas in 2020, Rep. Henry Cuellar (D-Texas), who represents a Democratic-leaning district, asked his constituents why so many of them voted Republican.

“The two things that I heard was ‘defund the police’ and oil-and-gas jobs,” Cuellar said.

“With all due respect for my colleagues, I don’t think we need to single out the oil and gas industry,” he added.

Rep. Sylvia Garcia (D-Texas), who represents a Houston district that's full of oil and gas industry workers, said she thought bringing executives to the Hill to testify was worthwhile given rising gas prices but that Democrats shouldn't ratchet up their rhetoric so much that it alienates potential Democratic voters.

“Criticizing is fair, but we need to make sure that it doesn't get so bad that it is threatening and it might impact some election results,” she said.

The campaign

‘Let me vote in peace’: “Driving through downtown [Montgomery, Ala] one misty, humid morning, Evan Milligan pointed out landmarks historic and personal,” our colleague Colby Itkowitz writes. “There once stood the Black barbershop where the Rev. Martin Luther King Jr. got his hair cut. There was the street corner where Rosa Parks boarded a city bus and, later, refused to give up her seat to a White passenger. There was the church where King organized a bus boycott after Parks’s arrest.”

  • “Milligan is a descendant of enslaved Blacks, only six generations removed. Once freed, his ancestors moved from the rural Black Belt — so named for its rich topsoil — to neighborhoods in eastern Montgomery. Decades later, they would be foot soldiers of the civil rights movement, thrust into the nation’s most historic battles over segregation and voting rights in the Jim Crow South.”
  • “Now Milligan, 40, is on the front lines of the latest discrimination fight, lending his family name to what will be the marquee Supreme Court case over racial gerrymandering, centered on the invisible district line that divides the Black neighborhoods of eastern Montgomery.”
  • “In Milligan v. Merrill — that’s Alabama Secretary of State John Merrill (R) — the nation’s highest court will determine whether federal law requires states such as Alabama with large minority populations and racially polarized voting to take race into account in redistricting or whether they have free rein to squeeze minority voters into as few districts as possible — one, in Alabama’s case — giving White politicians dominance in all the others.”
  • “The decision could have sweeping implications across a huge swath of the South where Black and other minority populations are growing at a faster rate than Whites but the power is disproportionality held by White politicians.”

Michigan Democrats to lobby to be first in 2024 presidential contest

Game of Thrones: “Democrats in Michigan plan to ask the national party to make their state the location of the first presidential nominating contest in 2024, challenging the election-year status of Iowa, New Hampshire, Nevada and South Carolina,” people involved in the effort told our colleague Michael Scherer.

  • “Rep. Debbie Dingell (D-Mich.) said Tuesday that she had spoken with stakeholders throughout the state, including the office of Sen. Debbie Stabenow (D-Mich.), about putting together a bid later this spring, when the Democratic Rules and Bylaws Committee is expected to open the process for applications for the next nomination order.”
  • “Dingell said Michigan is perfectly situated to start the nominating process.”
  • “First of all, we are purple. The issues we are facing reflect the diversity of what the country is facing, from rural areas to urban areas, manufacturing areas to farming areas,” Dingell told Scherer. “We are a mini-America.”

“The Michigan Democratic effort marks the first time that a new state has made a play to dethrone the early-voting order that has ruled presidential nominating contests for more than a decade.”

Republican Connie Conway advances to runoff to replace Devin Nunes

🗳️: “Republican Connie Conway advanced to a June runoff in a special election to fill in California’s 22nd Congressional District, replacing Devin Nunes, our colleague David Weigel reports. “Conway’s opponent has not been determined yet. Democrat Lourin Hubbard was in second place early Wednesday but it was too early to call the second spot in the runoff.”

  • “The winner of the June 7 runoff will fill out the remainder of Nunes’s term. Tuesday marked the last election under the district’s current lines; voters will choose candidates in newly-drawn districts starting in June.”

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