Oil Industry Says Granholm Meeting Sends ‘Positive Signal’ | Economic news

By MATTHEW DALY, Associated Press

WASHINGTON (AP) — An oil industry meeting with Energy Secretary Jennifer Granholm to lower gas prices and increase domestic oil supply was constructive, but failed to produce a major breakthrough, officials said. administration and industry officials said Thursday.

The closed-door meeting came as President Joe Biden called on Congress to suspend federal taxes on gasoline and diesel fuel to relieve high gasoline prices that have frustrated drivers and spurred the inflation. The Democratic president also called on states to suspend their own gasoline taxes or provide similar relief, and he publicly criticized the energy industry for prioritizing profits over production.

“It won’t take away all the pain, but it will be a big help,” Biden said Wednesday, referring to the national average of $5 a gallon for gasoline. Biden has said he is doing his part and now wants Congress, states and industry to do their part as well.

In a joint statement, the American Petroleum Institute and American Fuel & Petrochemical Manufacturers said the meeting with Granholm “should send a positive signal to the market that the United States is committed to long-term investment in a refining industry. strong United States and to align their policies with reflect this commitment.

political cartoons

The challenges facing their industry are complex, the groups said, from Russia’s war in Ukraine to “market imbalances” left by COVID-19 shutdowns that have reduced demand and production. “Our industry will continue to … work with policymakers to unlock American energy, fuel economic recovery and strengthen our national security,” they said.

In a separate statement, the Department of Energy said Granholm has reminded oil companies and refiners that their customers, workers and communities are “feeling the pain at the pumps because of Putin’s price hike,” a reference to Russian leader Vladimir Putin’s invasion of Ukraine in February. , leading to a ban on Russian oil by the United States and many Western allies.

“At a time when Putin is using energy as a weapon, oil companies must come up with solutions to ensure secure and affordable supply,” the Energy Department said.

The meeting at the Energy Department included executives from Exxon Mobil, Chevron, Shell, Marathon and Phillips 66 and other major companies.

White House press secretary Karine Jean-Pierre called the meeting with oil executives a “productive dialogue” and said Granholm “made it clear that the administration believes it is imperative that companies increase the gas supply”.

Granholm also “reiterated that the President stands ready to act quickly and decisively using the tools at his disposal, as appropriate, on sensible recommendations,” Jean-Pierre said. Biden has already released one million barrels of oil a day from the Strategic Petroleum Reserve and rallied his allies to release their own reserves.

Chevron CEO Michael Wirth, who told Biden this week that the administration “has largely sought to criticize, and at times vilify, our industry,” sounded dovish on Thursday.

“Today’s meeting was a constructive conversation about addressing both short-term issues and longer-term stability in energy markets,” Wirth said in a statement. “We appreciate Secretary Granholm’s invitation to participate in the conversation, which has been an important step toward greater energy security, economic prosperity, and environmental protection.”

Shell’s U.S. President Gretchen Watkins told Granholm that her company and others “have cut their refining capacity because we’re busy converting century-old assets to produce biofuel,” like ethanol and biodiesel. . US law requires billions of gallons of corn-based ethanol and other renewable fuels as a way to produce cleaner gasoline and slow climate change.

While acknowledging that “Americans are feeling a lot of price pain,” Watkins said in an email that she asked Granholm to “look closely at expediting the clearance process” to increase the price. oil production in the Gulf of Mexico, “while paving the way for future wind development” off the east coast of the United States.

In recent weeks, Biden has criticized oil producers and refiners for maximizing profits and making “more money than god,” rather than ramping up production in response to higher prices as the economy tightens. recovering from the pandemic and feeling the effects of the Russian invasion of Ukraine.

Responding to Wirth’s criticism, Biden on Tuesday said the oil CEO was “slightly sensitive,” adding, “I had no idea they would be hurt so quickly. »

He called Wednesday for a three-month suspension of the 18.4-cent-per-gallon federal tax on gasoline and the 24.4-cent-per-gallon federal tax on diesel fuel. If gas savings were fully passed on to consumers, people would save just under $3 for a full 15 gallon tank of gas.

Biden’s push faces growing difficulties in Congress, where lawmakers from both parties have expressed skepticism and outright opposition. Many economists are also wary of a gas tax exemption.

High gas prices pose a fundamental threat to Biden’s electoral and political ambitions. They have driven confidence in the economy to low levels that bode ill for the defense of Democratic control of the House and Senate in November.

Biden’s past efforts to cut gasoline prices — including releasing oil from the U.S. strategic reserve and greater blending of ethanol this summer — have failed to deliver savings at the pump, a risk that carries over to the idea of ​​a gas tax exemption.

There is little the president can do to fix the prices set by global markets, for-profit corporations, consumer demand and the aftershocks of Russia’s invasion of Ukraine and subsequent embargoes. The underlying problem is a shortage of oil and refineries that produce gas, a challenge that a tax holiday may not necessarily solve.

Granholm told oil executives she hoped Thursday’s meeting would be part of an ongoing dialogue, the Department of Energy said.

Associated Press writer Chris Megerian contributed to this report.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Comments are closed.