Top energy company executives will try to convince the White House on Thursday not to ban fuel exports in a desperate bid to bring down sky-high gasoline prices.
The emergency meeting led by Energy Secretary Jennifer Granholm follows weeks of bashing between President Biden and oil companies over the cause of intense price spikes affecting millions around the world.
On Wednesday, Biden called on Congress to pass a three-month suspension of federal gasoline and diesel taxes, a proposal that has already been criticized by members of both parties.
The president has previously accused oil companies of profiting and accused of not refining or drilling enough to meet price increases caused by Russia’s invasion of Ukraine, prompting corporate pushback and ridicule from critics who point out that Biden has discouraged fossil fuel production and promoted so-called “green energy” for much of his administration.
In the weeks leading up to the meeting, White House officials signaled to refiners that they were considering a partial or full ban on fuel exports to help bring down the domestic price of gasoline and diesel.
Granholm said during a White House briefing on Wednesday that Biden hopes to win bipartisan support for the gas tax exemption, despite an initially lukewarm reception.
Asked about the industry’s unease over a potential export ban, Granholm said Biden “is unwilling to take tools off the table, but we’re willing to listen.”
According to data from the National Association of Convenience Stores, there are approximately 145,000 gas stations in the United States. Petroleum refining companies own less than 5% of stores and about 60% are owned by a single person or family that operates a single location.
The United States is the world’s largest exporter of refined products, shipping a near-record 6 million barrels a day of products, including gasoline and diesel, according to federal data.
If Biden restricts exports, he could temporarily flood the market with fuel — driving down prices but risking reducing output at refiners.
“Not only will limitations or outright bans on petroleum products have the exact opposite effect to that intended – raising fuel prices instead of lowering them and jeopardizing additional refining capacity – it would hurt our allies in Latin America and Europe,” said a spokesperson for the U.S. fuel and petrochemical makers.
Gas prices rose gradually in 2021 — from around $2.30 to $3.27 a gallon — before soaring when Russia invaded Ukraine on Feb. 24.
In 2015, the United States lifted a 40-year ban on crude oil exports that had been put in place to help the country remain less dependent on the Middle East.
Over the past two years, the United States has become one of the most important countries in world energy markets as a net exporter of crude oil and refined products.
“If refiners aren’t allowed to export, they’re just going to slow production and reduce refinery utilization,” said Bob Yawger, director of energy futures at Mizuho.
Yawger said excess product would likely go to inventory and cause refiners to lose money.
“Refiners are not a charity,” he added.
The price hike comes as the threat of recession comes amid soaring inflation and other alarming signs of a faltering economy, crushing Biden’s approval ratings and casting a dark cloud over the chances of Democrats to retain power in Congress in the November elections.
Biden said in an interview last week that “until gas prices started going up…things were a lot more, they were a lot more optimistic.”
With post wires
New York Post