United States Secretary of Energy Jennifer Granholm U.S. Energy Secretary urges oil companies not to increase fuel exportsU.S. Energy Secretary Jennifer Granholm urged domestic refinery leaders not to increase exports of fuels such as gasoline and diesel, adding that the Biden administration may have to consider taking action if the refineries do not stockpile. This is according to a letter sent by Granholm in the middle of the month, the contents of which were released on Saturday.
U.S. refineries increased their exports of petroleum products in August as domestic crude oil production rose and global fuel demand continues to recover.
The Secretary of Energy, in a letter dated August 18, urged the heads of seven refiners, including Valero, ExxonMobil and Chevron, to build up fuel stocks as the US approaches the peak of the hurricane season.
“Given the historically record level of exports of petroleum products from the United States, I once again I urge you to focus in the near future on building up reserves in the United States, rather than selling off existing reserves and further increasing exports,” Granholm said in a letter to the oilmen.
This summer, President Joe Biden's administration was concerned about high U.S. petroleum product exports as gasoline prices briefly hit a record $5 a gallon, pushing inflation to a 40-year high. Gasoline prices have since dropped to around $3.86 a gallon.
Forecasters predict that the Atlantic hurricane season will be intense this year, which could pose a risk to refineries. Still-high gas prices are a threat to Democrats ahead of the Nov. 8 midterm elections, in which they hope to retain control of both houses of Congress.
Granholm said the administration is in talks with East Coast states, where gasoline inventories are at their lowest levels in nearly a decade. The Department of Energy is putting 2 million barrels of gasoline and fuel oil stockpiles in the US northeast on “active standby” in the event of a possible natural disaster, and is also preparing other contingency actions, she said.
The administration hopes that companies will “proactively address this need” in stockpiling, she said. If that doesn't happen, the administration “will need to consider additional federal requirements or other emergency measures,” Granholm added without elaborating.
At a meeting with refiners in June, Granholm abandoned a plan to ban fuel exports from the United States. but the idea has never been completely abandoned.
Refiners said the ban could oversaturate domestic markets with fuel and cause some refineries to cut production, which could reduce supply and put upward pressure on prices.
“Talk about [banning] exports is distracting at best and counterproductive for prices and supplies at worst,” said a source familiar with Grenholm's talks with refiners.