Biden threatens oil firms: Do something about rising gas prices or face consequences

06/17/2022 / By Ramon Tomey

President Joe Biden threatened oil companies with consequences if they fail to do their part in addressing rising gas prices.

He issued the threat in the form of a June 14 letter addressed to the executives of different oil companies – including British Petroleum, Marathon Petroleum, Chevron, Phillips 66, Shell, Valero Energy and Exxon Mobil. A copy addressed to Exxon Mobil CEO Darren Woods was subsequently made public.

“There is no question that [Russian President] Vladimir Putin is principally responsible for the intense financial pain the American people and their families are bearing. But amid a war that has raised gasoline prices more than $1.70 per gallon, historically high refinery profit margins are worsening that pain,” Biden wrote. He added that these “well above normal” profit margins ” being passed directly onto American families are not acceptable.”

“Your companies and others have an opportunity to take immediate actions to increase the supply of gasoline, diesel and other refined products you are producing. [The Biden] administration is prepared to use all reasonable and appropriate federal government tools and emergency authorities to increase refinery capacity and output in the near term, and to ensure that every region of this country is appropriately supplied.” (Related: Biden sends threat-letters to big oil: Help ease “Putin price hike” or face our tools.)

Biden subsequently called on oil companies “to bring forward concrete, near-term solutions that address the crisis and respect the critical equities of energy workers and fence-line communities.”

To this end, he directed Energy Secretary Jennifer Granholm to convene an emergency meeting on the crisis and engage the National Petroleum Council. In line with this, he exhorted oil companies to provide Granholm with “an explanation of any reduction in your refining capacity since 2020” and “any concrete ideas that would address the immediate inventory, price, and refining capacity issues in the coming months — including transportation measures to get the refined product to market.”

“I appreciate your immediate attention to this issue and your efforts to mitigate the economic challenges that Putin’s actions have created for American families,” Biden concluded the letter.

Biden threatening the free market with his letter to oil companies

Prior to the letter’s release, oil industry officials expressed hope of a smooth collaboration with the Biden administration and discussions over the matter of exorbitant gas prices. The industry had earlier denounced the administration for not issuing new oil drilling leases on public lands. It had also criticized Biden for canceling the Keystone Pipeline, which could have helped alleviate high pump prices.

Frank Macchiarola, senior vice president of policy, economics and regulatory affairs at the American Petroleum Association, told reporters on June 14: “We’re encouraged by the administration reaching out and asking refiners what they can do to help resolve the situation from a policy standpoint.”

However, author Steve Byas begged to differ. The author of “History’s Greatest Libels” laid down his thoughts about Biden’s letter in a June 16 piece for the New American.

He argued that policies enacted by Biden and Special Presidential Envoy for Climate John Kerry, alongside sanctions on Russian petroleum products, were to blame for the spike in fuel prices. According to the author, the policies were put into place with a view to forcing Americans to shift from gasoline-powered vehicles to electric vehicles. This lined up with the Biden administration’s goal of “fighting climate change,” Byas wrote.

“This is not a question of whether automobiles should be run by gasoline or electricity; the free market will make that decision. If electric cars become practical and affordable for the masses, then consumers will willingly switch over to them – away from petroleum-based energy.”

“Ominously, Biden threatened to use ’emergency authorities’ if the companies do not follow his dictates. Blaming oil companies and threatening them for a policy that they did not create is the height of hypocrisy,” concluded Byas.

Watch this Fox Business report about Biden’s threat to oil companies.

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