President Joe Biden stepped up his election-year rhetoric against oil companies today, telling the nation’s seven largest refiners their profit margins are ‘not acceptable’ and asking them to help drive down prices .
The pandemic caused the closure of several refineries in 2020 and 2021, and the Russian invasion of Ukraine this year sent oil prices soaring. This combination, along with pent-up demand from U.S. drivers, has allowed refiners to get more out of every barrel they turn into fuel (thread of energyMay 5).
In a letter to top refiner executives, Biden called on companies to increase gasoline and diesel production and said he was considering unspecified executive action to reopen refineries that were shuttered during the pandemic. He also asked Energy Secretary Jennifer Granholm to hold an emergency meeting on fuel prices.
During a briefing today, White House press secretary Karine Jean-Pierre pointed to executive powers such as the Defense Production Act as mechanisms Biden could use to increase production. national. But she said her first step will be to start a dialogue with the oil companies.
“The letter is intended to solicit the best ideas from companies on how to increase capacity,” said Jean-Pierre, “and how the government can help them do so in the spirit of serious and pragmatic dialogue. “.
“I understand that many factors contributed to the decision to reduce refining capacity, which took place before I took office,” Biden wrote in his letter. “But in wartime, well above normal refinery profit margins passed directly to American families are not acceptable.”
Biden noted that the price of oil has held steady at around $120 a barrel since March, but the price of gasoline has risen 75 cents per gallon from around $4.25 to over $5 per gallon. gallon this week. The letter was sent to Exxon Mobil Corp., Chevron Corp., Phillips 66, BP America, Shell PLC, Marathon Petroleum Corp. and Valero Corp.
Gas prices are a major driver of inflation, which has hit a 40-year high, and a political headache for Biden. The Department of Energy announced in March that it would release 1 million barrels of crude a day from the Strategic Petroleum Reserve, but fuel prices have continued to rise.
Biden sought to shift some of the blame to the oil companies themselves, saying Friday that Exxon “made more money than God this year” and was more interested in buying back its own stock than increasing oil production. oil and help consumers (Prime Minister of E&E News, June 10).
The administration has taken a series of measures aimed at controlling the price of oil, including releases of strategic oil reserves. Biden is due to meet in July with the leaders of Saudi Arabia, which has a strong influence on world oil prices as the de facto chief of OPEC.
Exxon said in a statement that it has already invested in additional refining capacity and plans to bring in about 250,000 barrels per day.
“We continued to invest even during the pandemic when we lost over $20 billion and had to borrow over $30 billion to maintain investment to increase capacity to be ready for post demand. -pandemic,” the company said.
Like many oil producers, refiners have said through their trade groups that Biden’s focus on climate change and energy transition is creating hurdles for the industry.
“Any suggestion that U.S. refiners are not doing their part to bring stability to the market is false,” Chet Thompson, president of U.S. Fuel and Petrochemical Manufacturers, said in an emailed statement. “We encourage the administration to look inward to better understand the role its policies and hostile rhetoric have played in the current environment.”
Journalist Camille Bond contributed to it.