“In times of war, the refinery’s profit margins far above normal, which are passed directly to American families, are unacceptable,” the president wrote in a letter sent to seven companies on Tuesday. “There is no doubt that Vladimir Putin is primarily responsible for the intense economic suffering of the American people and their families. But in the midst of a war that pushed gasoline prices above $ 1.70 a gallon, the refinery’s historically high profit margins are exacerbating that pain. “ “The lack of refining capacity – and the consequent unprecedented profit margins of the refinery – is mitigating the impact of my government’s historic actions to tackle Vladimir Putin’s rising prices and increasing costs for consumers.” The president and his team have acknowledged in recent weeks that they can do little to deal with rising prices, and that steps taken so far, such as releasing record oil from the country’s strategic reserves, have not paid off. Several factors have led to price spikes, including increased demand after the Covid-19 lockdowns in recent years and the return of passengers to offices. But the White House has mainly sought to draw attention to Russia’s war in Ukraine, accusing oil companies of making huge profits from Putin’s aggression. Biden’s letter was sent to seven oil companies on Tuesday: Marathon Petroleum, Valero Energy, ExxonMobil, Phillips 66, Chevron, BP and Shell. While Biden urged companies to take “immediate steps to increase the supply of gasoline, diesel and other refined products,” the president also said the federal government was ready to use additional emergency powers to boost capacity and production. refinery. “In addition, my government is ready to use all the reasonable and appropriate tools of the Federal Government and the emergency authorities to increase the capacity and production of the refinery in the short term and to ensure that every part of this country is properly supplied,” he wrote. “I am ready to use all the tools at my disposal, as appropriate, to address obstacles to providing Americans with an affordable and secure energy supply.” Biden writes that he instructed Energy Secretary Jennifer Granholm to hold an emergency meeting on the issue, as well as to work with the National Oil Council. Prior to the meeting, Biden asked companies to provide Granholm with “an explanation for any reduction in refining capacity by 2020 and any specific ideas that will address immediate stock, pricing and refining issues in the coming months – including transport measures for the placing of a refined product on the market “. “The critical situation facing families deserves immediate action. Your companies need to work with my government to come up with concrete, short-term solutions that address the crisis and respect the critical rates of energy workers and fence communities.” writes Biden. Granholm told CNN’s John Berman on New Day on Wednesday that the government was considering any option to cut gas prices to record levels. “You’ve heard talk of a variety of actions that Congress could take. The defense bill was on the table used by the President in other contexts. But he wants to hear – the reason he wrote this letter. is because he wants to hear from these refiners “about high prices,” Granholm said, citing “mass profits” by oil companies. Biden, he said, “always looks at every tool,” noting that he also uses the Strategic Oil Reserve. Granholm did not say whether the White House would support an additional tax proposed by Oregon Democratic Sen. Ron Weiden. Weiden imposes an additional 21% tax on the profits of oil and gas companies that generate more than $ 1 billion in revenue, according to a senator’s spokesman.
“The president is calling for both oil production to increase in the United States and around the world, and he wants to increase the capacity of the refineries, and he is calling them to a meeting to say, ‘What can we do to help make this happen?’ » ” said Granholm. Citing the current “military base” in the midst of Russia’s invasion of Ukraine, he called for short-term supply increases. “We ask them to be – at this time of war, to consider increasing supply both domestically and internationally,” he said, adding that in the long run, the United States is working to clean up energy. . Ahead of Biden’s trip to Saudi Arabia next month, Granholm said there was “no promise in advance” that the Saudis would increase energy production. The energy industry fears a repeat of 2020, when it over-invested in fracking and refining at a time when demand has evaporated. Several American energy companies went bankrupt and access to Wall Street money evaporated. Despite record gasoline prices and rising oil and gas prices, the energy industry has been much more cautious about expanding this time around. She also knows that regulations and consumer demand will force her to invest in cleaner energy projects. Others, meanwhile, see an opportunity abroad where energy prices are higher than in the United States and capacity is even more limited as Europe seeks to move beyond Russian oil and gas. In Washington, D.C., the progressive Democrats, led by Massachusetts Sen. Elizabeth Warren, called for an unexpected profit tax on energy companies that would help offset rising fuel costs for Americans. But with little prospect of this passing Congress, Biden is resorting to demanding action that he almost certainly knows oil companies will reject. CNN’s David Goldman and Kate Sullivan contributed to this report.