WASHINGTON — Oil company executives are scheduled to meet with top administration officials Thursday as President Joe Biden increasingly blames the oil and gas industry for the high prices at the pump.
Biden requested the meeting between Energy Secretary 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.
Biden, 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 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,” said Bob Yawger, managing 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 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 lower prices. She said the companies have been “taking advantage of 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 largely sought to criticize, and at times vilify, our industry,” he said 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 told reporters when asked about that remark.
During the meeting 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 said in a statement.
“I hope they’ll come to the table with some real ideas and practical steps in the near term,” Biden said 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.”