WASHINGTON — Oil firm executives are scheduled to meet with high administration officers Thursday as President Joe Biden more and more blames the oil and gas business for the excessive prices on the pump.
Biden requested the assembly between Energy Secretary Jennifer Granholm and 7 oil refiners in a letter to the businesses final week, wherein he known as their revenue margins “not acceptable” and stated the business must be doing extra to decrease gas prices.
Biden, who has been below assault by Republicans for file inflation, has more and more sought to place the blame for the excessive gas prices on the oil business. He has pointed to the businesses’ file income, saying at an occasion earlier this month that Exxon made “more money than God.”
But there are low expectations among industry analysts that anything constructive will come out of the meeting. The main bottleneck driving gas prices higher, industry experts say, is a lack of refining capacity after numerous refiners shut down during the pandemic when demand for gasoline tumbled. There is no clear way to put those refineries back on line and no motivation for companies to build new refineries, which would take years to complete, given the ongoing shift to electric vehicles.
“At the end of the day, the problem is this: The electric vehicle environment is on the horizon. It’s out there somewhere, 10 years from now, 15 years from now, 20 years from now, it’s going to happen,” stated Bob Yawger, managing director of vitality future methods at Mizuho. “And so, you’re trying to tell these guys that they need to crank it up as they’re drifting into that eventuality? That’s a tough sale, and they’re making money right now for the first time in years.”
Biden said he wouldn’t be attending Thursday’s meeting with the industry executives.
With few tools left at his disposal to lower the record fuel prices contributing to the highest inflation in 40 years, Biden is increasingly turning to steps that industry analysts say will have little, if any, impact on oil prices.
On Wednesday, he called for a three-month gas tax holiday that would lower the price of gas by 18 cents a gallon, and 24 cents for diesel. But the move faces an uphill battle in Congress, where it is widely opposed by Republicans. Even if there were to be a gas tax holiday, Yawger said, it would likely drive up demand, which would then push up oil prices and offset the savings from the tax reduction.
The meeting and the increasing pressure on the oil industry give the White House one more talking point to show Biden is taking concerns about gas prices seriously, as the rising cost of fuel has become a central issue for Democrats heading into the crucial summer months before the midterm elections.
White House press secretary Karine Jean-Pierre said earlier this week that Biden believes the companies have a “patriotic duty” to take actions to decrease prices. She stated the businesses have been “taking advantage of the war,” referring to Russia’s invasion of Ukraine.
Chevron CEO Michael Wirth, who stated he could be at Thursday’s assembly, accused the White House of looking for to denigrate the business.
“Your administration has largely sought to criticize, and at times vilify, our industry,” he stated in a letter earlier this week responding to Biden. “These actions are not beneficial to meeting the challenges we face.”
On Wednesday, Biden dismissed the criticism.
“He’s mildly sensitive, I didn’t know they’d get their feelings hurt that quickly,” the president informed reporters when requested about that comment.
During the assembly Thursday, Granholm plans to “discuss steps companies can take to increase refining capacity and output and reduce gas prices in the near-term. The meeting will serve as a forum for the industry to share its ideas and bring actionable, near-term solutions to reduce the pain at the pump for the American people,” the Department of Energy stated in an announcement.
“I hope they’ll come to the table with some real ideas and practical steps in the near term,” Biden stated Wednesday. “And I’m prepared to act quickly and decisively on the recommendations if that makes sense to address the immediate challenge in front of us and the American people.”
