Biden threatens oil companies for not refining more gas — There’s just one problem

By Thomas Catenacci

President Joe Biden wrote a letter Wednesday to oil industry executives, warning them he would take action if they don’t boost refining output, Axios reported.

Biden warned the leaders of seven major U.S. oil producers and refiners — ExxonMobil, Chevron, BP America, Shell USA, Phillips 66, Marathon and Valero — that he was “prepared to use all reasonable and appropriate Federal Government tools and emergency authorities” to increase petroleum refinery capacity and output, according to the letter obtained by Axios. The average price of gasoline nationwide hit a record $5.02 per gallon Tuesday while the average price of diesel fuel hit an all-time high of $5.78 a gallon Wednesday, according to AAA data.

Wikimedia Commons

Total U.S. operable refinery capacity peaked at nearly 19 million barrels per day in early 2020, but has since fallen to about 17.9 million barrels per day, the latest federal data showed.

“I understand that many factors contributed to the business decisions to reduce refinery capacity, which occurred before I took office,” Biden wrote in the letters. “But at a time of war, refinery profit margins well above normal being passed directly onto American families are not acceptable.”

“With prices for your product where they are today, you have ample market incentive to take these actions, and I recognize that some of you have already begun to do so,” he continued.

However, U.S. refining capacity utilization surged to 91.3% in March, its highest rate since June 2021, and is expected to average 94% between July-September, according to a June 7 report from the Energy Information Administration (EIA). Refining utilization measures how much fuel refiners produce from crude oil inputs relative to their total production capacity.

The EIA noted that, while refinery utilization will continue to increase over the upcoming months, total output will remain relatively low since total domestic capacity has dropped by 900,000 barrels per day since 2019. Total U.S. operable refinery capacity peaked at nearly 19 million barrels per day in early 2020, but has since fallen to about 17.9 million barrels per day, the latest federal data showed.

In addition, the last major refinery to be constructed in the U.S. was Marathon Oil’s facility built in Louisiana in 1977. Industry groups and experts blamed the declining capacity and lack of new refineries on environmental regulation and projected fuel demand decline in the future as governments push green energy alternatives.

“While we appreciate the opportunity to open increased dialogue with the White House, the administration’s misguided policy agenda shifting away from domestic oil and natural gas has compounded inflationary pressures and added headwinds to companies’ daily efforts to meet growing energy needs while reducing emissions,” Mike Sommers, the CEO of fossil fuel industry group American Petroleum Institute, said in a statement Wednesday.

Biden added in his letters that Energy Secretary Jennifer Granholm will host an emergency meeting on domestic refining capacity.

The White House, Energy Department and six companies Biden wrote to Wednesday didn’t immediately respond to requests for comment from The Daily Caller News Foundation. A Shell spokesperson said the company didn’t have an immediate response to the letter in an email and BP America declined to comment.

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Images courtesy of The White House and Wikimedia Commons

8 thoughts on “Biden threatens oil companies for not refining more gas — There’s just one problem

  1. FYI all. Here is Exxon’s reply yesterday to what Biden said about them…spurious lies. Biden just says – what he is told to say. Bu the truth is, Exxon lost tens of billions while investing tens of biollions …to INCREASE supply for Americans (to the dismay of The Conservation Law Foundation) and expand USA refinery capacity. This is exact opposite of what teh Enviro Liberals tell & feed to Biden…”Liberal Logik Lies”:

    “We have been in regular contact with the administration to update the President and his staff on how ExxonMobil has been investing more than any other company to develop U.S. oil and gas supplies. This includes investments in the U.S. of more than $50 billion over the past five years, resulting in an almost 50% increase in our U.S. production of oil during this period.

    Globally, we’ve invested double what we’ve earned over the past five years — $118 billion on new oil and gas supplies compared to net income of $55 billion. This is a reflection of the company’s long-term growth strategy, and our commitment to continuously invest to meet society’s demand for our products.

    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. 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.

    In the short term, the U.S. government could enact measures often used in emergencies following hurricanes or other supply disruptions — such as waivers of Jones Act provisions and some fuel specifications to increase supplies. 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.”

  2. Sep 6, 2019 Biden: “I Guarantee You We’re Going To End Fossil Fuel”
    The low IQ puppet even walked up to the collage age student who asked the question and said look into my eyes before he said it.. With that attitude and a
    statement by Chevron CEO that there will never be another refinery built in the
    USA because of government regulations don’t expect more production. Like some
    one mentioned below some current refineries are moving to bio fuel production and others are shutting down due to excessive cost to upgrade or modernize.. This is
    a problem created by the greenie weenie democrats and won’t go away until they are voted out of office for good.. a side note one eruption of a volcano will spew more co2 then all man made co2 ever produced, what are they doing to
    prevent that calamity???

  3. This is long, but WORTH YOUR READ. WSJ editorial just tonite on the oil refinery issues…all caused NOT by oil companies greed, but Liberals, Enviro Activists and Biden. Please read all – and you will be informed of the real truth to tell your friends and family WHY oil is so high. But they are likely all Progressives, Libs and Dems anyway, so they will never listen to facts or truth.

    “What do you know? President Biden has suddenly discovered that a refinery shortage is driving up fuel prices. Naturally, he’s blaming refiners, even as his Administration doubles down on the policies that created the shortage.
    In a remarkable and threatening letter to oil and gas CEOs this week, Mr. Biden seems stunned to learn that prices rise when supply doesn’t meet demand. He’s aghast that gas prices are still rising above $5 a gallon even as oil prices have stabilized at $120 a barrel. Ergo, he says, the problem must be greedy oil companies making too much money.
    At least he’s finally noticed the dearth of refining capacity to process crude, which some of us have warned about for years. The U.S. has lost about one million barrels a day of refining capacity in the pandemic. Some new refineries have opened in Asia, but the International Energy Agency recently reported that global capacity last year fell by 730,000 barrels a day.
    A major culprit is U.S. government policy. Some older refineries have closed because companies couldn’t justify spending on upgrades as government forces a shift from fossil fuels. They also have to account for the Environmental Protection Agency’s tighter permitting requirements—the agency recently challenged a permit for an Indiana refinery—and steeper biofuel mandates.

    Chevron CEO Mike Wirth said recently that refineries are shutting down or being repurposed for renewable fuels because “the stated policy of the U.S. government is to reduce demand for the products that refiners produce.” When companies are told that demand for their product will become obsolete, it’s no surprise that they don’t invest in supply.

    The refining shortage was also predictable for those who follow events in California. Environmental regulations there have driven refineries to shut down and convert to biofuels, driving up prices and refiner profits. This is a major reason gas prices in California are averaging $6.44 per gallon—$1.43 more than the national average versus 30 cents in 2012.
    Mr. Biden demands that refiners propose “concrete ideas” to immediately increase capacity. How about his Administration stop trying to put them out of business?”

  4. Illegititement Joe is such a buffoon, I’m not sure who’s pulling the strings on this senile old
    man, but they are willing to destroy the country’s economy and way of life for an agenda!

    Let’s see he blamed Trump, he blamed Putin and he’s now blaming the oil companies,
    how feckless is this fool, or how corrupt are his handlers ???

  5. I cannot comphrend the ignorance of Biden, Libs and Enviros. Refining is almost always a terrible business. Highly regulated, capital intensive (massively)…high volumes but LOW margins.. Refinery margins lately have never been seen before. But it is not because of “profiteering” It is because three refineries said they will shut down (or have closed). In 1970 there were 240 USA refineries. Today? There are about 120…to serve the WHOLE of the USA.. Chevron’s CEO just stated publically that he doubts another major refinery will EVER be built in USA again. He stated the regulatory/oversight/permitting/EPA is mind boggling – and after that it would cost up to $10 billion & take a decade to build. Say THANKS to Enviro’s, Liberals & the EPA…and then in VT the Conservation Law Foundation & Nature Conservancy.

    Joe Biden blames the companies? It is BIDEN who banned new offshore oil leases. Biden banned leases on the Northern slope. Biden halted the Keystone pipeline. And he halted NEW leases of onshore Federal land. To cap it off? Permits to drill have been granted on Federal lands up to a few years ago, but not drilled yet. Look at TODAY’s NEWS!. ENVIRO GROUPS SUE TO HALT THEM FROM EVER BEING USED. So the fact & truth is – it’s DEMOCRATS and Enviro activists who attempt shut down the energy industry…..JUNE 15 news:

    “Environmental Groups Sue to Block Biden-Approved Oil Leases.”
    “Lawsuit warns of climate-change impact, harm to ecosystems from drilling permits on federal land.”

    when heating oil hits $6 in VT….send any protest letters to Conservation Law Foundation & Nature Conservency…both in Montpelier…. they are “front line” “LawFare style Warriors” to halt all fossil fuels or infrastructure.

    • Jeffrey,

      Biden “rules” in name only. De facto, he is merely a remote-controlled puppet.

      The myopia regarding US issues of Biden’s teleprompter controllers is beyond anything ever seen in the US.

      The Democrat elite picked Biden-in-the-basement, so they could control him, while they try to implement THEIR EXTREMIST agenda, such as wide open borders, no questions asked, just walk right in from anywhere, using HIS name.

      All this is an un-American form of malfeasance.

      • What is most unsettling is the breathtaking speed of destruction of the USA as well as the complicit acceptance of this carnage by most politicians, the MSM and the medical community.

        It is as if they are all sleep walking off the edge of the cliff.
        One thing is certain, by this time next year, things will be very, very different.
        God help us all.

    • Mr. Green you hit it on the nail’s head.!! The Democrats are destroying America like they are destroying Vermont, like our Rino Governor Scott. He is the puppet for all these out-of-state democrats who moved here to take over. Our so-called legislators are 98% out of staters That tells it all…

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