WASHINGTON — Oil company executives are scheduled to meet with senior administration officials on Thursday as President Joe Biden increasingly blames the oil and gas industry for high prices at the pump.
Biden called for the meeting between Energy Secretary Jennifer Granholm and seven oil refiners in a letter to companies last week, in which he called their profit margins “unacceptable” and said the industry should do more to reduce gas prices.
Biden, who has come under attack from Republicans for record inflation, has increasingly sought to blame high gas prices on the oil industry. He pointed to the companies’ record profits, saying at an event earlier this month that Exxon was making “more money than god.”
But industry analysts hardly expect anything constructive to come out of the meeting. According to industry experts, the main bottleneck driving up gasoline prices is the lack of refining capacity after many refiners shut down during the pandemic when gasoline demand plummeted. There is no clear way to get these refineries back online and no incentive for companies to build new refineries, which would take years, 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 there somewhere, in 10 years, in 15 years, in 20 years, it’s going to happen,” said Bob Yawger, General Manager of Future Energy Strategies at Mizuho “So you’re trying to tell these guys that they need to get up to speed as they drift towards that eventuality? That’s a hard sell, and they’re making money right now for the first time in years.”
Biden said he would not attend Thursday’s meeting with industry leaders.
With few tools at his disposal to lower record fuel prices contributing to the highest inflation in 40 years, Biden is increasingly turning to measures that industry analysts say will have little or no impact. on oil prices.
On Wednesday, he called for a three-month gasoline tax holiday that would cut the price of gasoline by 18 cents per gallon and 24 cents for diesel. But that move faces an uphill battle in Congress, where it is widely opposed by Republicans. Even if there were to be a gasoline tax exemption, Yawger said, it would likely increase demand, which would then drive up oil prices and offset the savings from the tax cut.
The meeting and growing pressure on the oil industry gives the White House an additional talking point to show that Biden is taking worries about gas prices seriously, as rising fuel costs have become a central issue. for Democrats as they approach the crucial summer months before the midterm elections.
White House press secretary Karine Jean-Pierre said earlier this week that Biden believed companies had a “patriotic duty” to take action to lower prices. She said the companies had “benefited from the war”, referring to Russia’s invasion of Ukraine.
Chevron CEO Michael Wirth, who said he would be at Thursday’s meeting, accused the White House of seeking to denigrate the industry.
“Your administration has widely sought to criticize, and at times vilify, our industry,” he said in a letter earlier this week in response to Biden. “These actions are not beneficial to addressing the challenges we face.”
On Wednesday, Biden dismissed the criticism.
“He’s slightly sensitive, I didn’t know they would get hurt so quickly,” the president told reporters when asked about the remark.
At Thursday’s meeting, Granholm plans to “discuss actions companies can take to increase refining capacity and production and reduce gas prices in the near term.” The meeting will serve as a forum for industry to share ideas and provide concrete, short-term solutions to reduce pain at the pump for the American people,” the Department of Energy said in a statement.
“I hope they come to the table with real ideas and practical short-term measures,” Biden said Wednesday. “And I stand ready to act quickly and decisively on the recommendations if it makes sense to meet the immediate challenge before us and the American people.”