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Oil CEOs come to Washington as Biden looks to shift blame for gas prices

The president, who has been under attack by Republicans amid surging inflation, has increasingly criticized the oil industry over record profits as costs surge at the pump.
President Biden Announces Release Of Oil Reserves In Attempt To Lower Gas Prices
Oil pumpjacks stand in the Inglewood oil field, in Los Angeles, on Nov. 23, 2021.Mario Tama / Getty Images file

WASHINGTON — Oil company executives met with top administration officials Thursday as President Joe Biden increasingly blames the oil and gas industry for the high prices at the pump.

During the meeting, the Department of Energy said in a statement, Secretary Jennifer Granholm reiterated Biden's call for oil companies and refiners to do more to lower prices and reminded the companies that "at a time when [Russian President Vladimir] Putin is using energy as a weapon — oil companies must deliver solutions to ensure secure, affordable supply."

"The Secretary made clear that the Administration believes it is imperative that companies bring supply online to get more gas to the pump at lower prices," the statement continued. "She reiterated that the President is prepared to act quickly and decisively, using the tools available to him as appropriate, on sensible recommendations."

Biden requested the meeting between Jennifer Granholm and seven oil refiners in a letter to the companies last week, in which he called their profit margins “not acceptable” and said the industry should be doing more to lower gas prices.

The president, who has been under attack by Republicans for record inflation, has increasingly sought to place the blame for the high gas prices on the oil industry. He has pointed to the companies' record profits, saying at an event earlier this month that Exxon made “more money than God."

But there were low expectations among industry analysts that anything constructive would 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,” said Bob Yawger, executive director of energy future strategies 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 didn't participate in 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, along with the increasing pressure on the oil industry, gave 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 believed the companies have a “patriotic duty” to take actions to lower prices. She said the companies have been “taking advantage of the war,” referring to Russia's invasion of Ukraine.

Chevron CEO Michael Wirth said the meeting was “a constructive conversation about addressing both near-term issues and the longer-term stability of energy markets.”

“We remain optimistic about our ability to work together to achieve these shared objectives,” Wirth said. “We appreciate Secretary Granholm’s invitation to participate in the conversation, which was an important step toward achieving greater energy security, economic prosperity and environmental protection.” 

Ahead of the meeting, Wirth had accused the White House of seeking to “criticize, and at times vilify, our industry.”

The American Petroleum Institute and the American Fuel and Petrochemical Manufacturers said in a joint statement that the meeting should “send a positive signal to the market that the U.S. is committed to long-term investment in a strong U.S. refining industry and aligning policies to reflect that commitment.”