No clear solutions emerged yesterday from a closely watched meeting between Energy Secretary Jennifer Granholm and top oil and gas executives, who gathered to discuss high gasoline prices and domestic refining capacity.
Although many companies and the Department of Energy described the meeting as productive, the DOE’s reading from the meeting gave some details beyond expressing the “ongoing dialogue” and desire to find solutions to “overcome current supply and price challenges.”
An industry source familiar with the meeting said that the meeting, convened under the direction of President Joe Biden, discussed various issues, including a potential fuel export ban and a fuel waiver. The person said the National Economic Council and State Department officials were present at the meeting. The meeting was held at DOE headquarters.
White House press secretary Karin Jean-Pierre, who said the decision had not been made on a fuel export ban, called the meeting “a productive conversation focused on creating an opportunity for industry to work with the government to provide American consumers the solution they need.”
“This is the first step with continued dialogue,” Jean-Pierre said yesterday in the White House briefing room. “Clearly we want to come up with solutions and I think … there are many other steps to get there.”
The meeting took place a day after Biden called on Congress to suspend the federal gasoline tax at the end of September, a no-no.E&E Daily, June 23). This has highlighted the growing political headache of energy costs for the Biden administration, as experts have suggested that the president has limited options to significantly reduce pump prices in the short term.
BP PLC, Shell USA Inc., Chevron Corp. And Exxon Mobil Corp. Representatives confirmed that the executives of their companies attended yesterday’s meeting.
Jean-Pierre yesterday stressed that the gasoline tax holiday is important to Biden, explaining that the potential suspension of the gas tax is “a simple, fast way to give American families and the American public some relief for 90 days.”
Ahead of the DOE meeting, some oil executives said there were steps the administration could take to reduce gasoline prices, such as lifting regulations on producers to stimulate production.
“The administration can do some short-term measures by reducing the amount of biofuel needed to mix gasoline and diesel fuel, known as renewable volume responsibilities,” Philips 66 CEO Greg Garland said on Wednesday’s webcast. Investors. He said the government could change the requirements for winter gasoline mixing.
Garland said the export ban “will have a lot of unintended consequences.”
“Our view in general is probably to raise prices and not lower prices,” he said.
In the long run, though, the administration needs to stimulate more oil production as crude prices are still a big factor in gasoline prices, Garland said. This could improve environmental regulations, such as the National Environmental Policy Act, he said.
“It’s not good for our industry to see $ 5 in gasoline at motorists’ pumps,” Garland said in Wednesday’s webcast.
Yesterday, the AAA reported an average price of $ 4.94 a gallon for regular US gasoline, about $ 3.07 a gallon a year ago. The US government collects just 18 cents per gallon on taxes and taxes on gasoline and more than 24 cents per gallon on diesel – these are the only ones in the event of a temporary federal gas tax holiday.
Oil companies and business groups say tax holidays are not a long-term answer, but environmentalists say the country’s demand for gasoline and diesel is increasing at a time when the country needs to switch to cleaner forms of energy.
On Wednesday, Frank Macchiarola, senior vice president of the American Petroleum Institute, said, “If policymakers seem to recognize the impact of rising fuel costs on American families, some will turn to short-term solutions rather than long-term solutions.”
“If Washington is serious about delivering a solution to consumers, they should focus on policies that increase US production and promote a global mismatch between fuel demand and available supply,” said Macchiarola.
Companies already have the financial incentive to reopen closed refineries. Garland said the profit margin for every barrel of oil they process, known as crack spread, has risen to $ 45 per barrel.
“It inspires the industry to run as much as we can today, restart what we can, and profitably,” Garland said. “There’s a financial signal to restart it.”
Gretchen Watkins, president of Shell USA, said at the Granholm meeting that “the global nature of oil markets and prices has been identified and some companies, including Shell, have reduced processing capacity because we are busy converting century-old assets.” Produce biofuels. “
“There is widespread acceptance that Americans are suffering a lot of price pain and that no thoughts have been saved in an effort to find solutions to it,” Watkins said in a statement.
“On our part, I have asked the Secretary to look closely at speeding up the permitting process to increase hydrocarbon production in the Gulf of Mexico in the short term, while clearing the way for future wind development off the US East Coast,” Watkins continued.
Yesterday’s meeting came as more than 30 energy trade associations wrote to Biden ahead of their trip to the Middle East next month and called for a visit to various US energy facilities, including the country’s refineries and high-fuel producing areas such as the Permian Basin and Marcellus. Shale.
While signatories say Biden’s visit to Saudi Arabia is significant, trade groups say, “US energy reserves – produced in the world’s highest environmental standards – are the answer in the global quest for reliable energy supplies.”
Jeff Eshelman, chief executive officer of the American Independent Petroleum Association, said in an emailed statement that a visit to US energy facilities indicates that Biden is “ready to listen and learn about the nation’s largest American energy source.”
The White House did not respond to a request for comment on the groups letter.