President Joe Biden signs an Executive Order banning the import of Russian oil, Tuesday, March 8, 2022, in the Oval Office of the White House. (Official White House Photo by Cameron Smith)
After trying to blame energy price inflation on Vladimir Putin didn’t work out for Joe Biden, he went back to the Democratic Party playbook and blamed oil companies. That didn’t go well. The industry came out and lambasted Joe’s excuses with a harsh letter of rebuke. Thomas Catenacci reports in the Daily Caller:
Oil companies and industry trade groups criticized President Joe Biden after he sent a letter to them threatening action over high gasoline prices.
Biden penned a letter to seven major oil companies Tuesday insisting they increase oil refining operations to counter declining fuel supplies and inventories nationwide. The American Petroleum Institute (API) and American Fuel & Petrochemical Manufacturers (AFPM) sent a letter to the White House Wednesday evening, saying energy companies are refining at an increasingly high rate and government policies have injected uncertainty into the industry, in a response sent to the White House on Wednesday evening.
“Refiners do not make multi-billion-dollar investments based on short-term returns,” the two groups wrote in the joint letter to Biden. “They look at long-term supply and demand fundamentals and make investments as appropriate. To that end, following on your campaign promise to ‘end fossil fuel,’ consider just some of the policy and investment signals being sent by various federal agencies and allied state governments to the market about our refining industry.”
“The timing and reasons for shutdowns of several refineries, including the Philadelphia Energy Solutions and Shell Convent refineries, were primarily due to lack of buyers willing to continue operating the facilities as petroleum refineries given growing rhetoric about the long-term viability of the industry,” the letter continued.
On Wednesday, several of the companies Biden addressed in his warning letter responded in force, echoing the industry groups’ response. They noted their refinery utilization rates are high and that the president’s policies are holding them back.
“Specific to refining capacity in the U.S., we’ve been investing through the downturn to increase refining capacity to process U.S. light crude by about 250,000 barrels per day – the equivalent of adding a new medium-sized refinery,” ExxonMobil said in a statement shared with The Daily Caller News Foundation. “We kept investing even during the pandemic, when we lost more than $20 billion and had to borrow more than $30 billion to maintain investment to increase capacity to be ready for post-pandemic demand.”
“Longer term, government can promote investment through clear and consistent policy that supports U.S. resource development, such as regular and predictable lease sales, as well as streamlined regulatory approval and support for infrastructure such as pipelines,” the company’s statement continued.
The API and AFPM noted that the Environmental Protection Agency recently finalized a vehicle standard to force gasoline demand down over the next decade and the administration encouraged an effort in California to place a future ban on traditional gasoline-powered vehicles. Multiple federal agencies have also introduced roadblocks for approving and constructing energy infrastructure projects like pipelines, the groups added.
Increasing refining capacity would boost crude oil demand and, therefore, prices would soar higher since the administration has largely opposed new fossil fuel production and leasing, the groups said.
Operable refinery utilization — a figure that measures how much petroleum companies are refining relative to their maximum capacity — reached a whopping 94.2% this month, its highest level since 2019, and is expected to remain at that rate through the summer, according to the Energy Information Administration. But total U.S. refining capacity has declined due to environmental regulations and projected gasoline demand decline as a result of the so-called green transition.
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