Amidst record prices, the White House has been desperately searching for a way to bring down costs without actually having to change its policy direction. That means lots of whining about supposed “price gouging” and threatening oil companies.
On Tuesday, the threats escalated to the use of emergency powers, specifically the Defense Production Act, to force oil companies to refine more gasoline.
President Biden will warn CEOs of the nation’s largest oil companies on Wednesday that he’s considering invoking emergency powers to boost U.S. refinery output, according to a letter obtained by Axios.
Why it matters: Biden’s direct engagement with the oil giants is part of an ongoing White House effort to tame fuel prices despite limited options — and cast oil companies as responsible for consumers’ higher bills.
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It’s not the weekend, so I’m not going to just start posting memes describing how idiotic Biden’s threat is, and to be frank, I think everyone reading this is smart enough to know. Joe Biden isn’t smart enough to know, but you are.
While the president apparently believes he’s a king, refining capacity doesn’t care about emergency powers. As CNBC notes, refineries are already running over 90 percent of capacity, and no new ones have been built in decades, largely because of stringent federal regulations and inconsistent energy policies. Who would invest in a new refinery when you’ve got one party saying they want to shut it down in five to ten years? Then there’s the fact that the White House has pushed refineries to make environmentally-unfriendly, engine-damaging biofuel as part of its “climate” agenda.
Refiners can’t just ramp up output, with utilization rates already above 90%. Additionally, some refiners are now being reconfigured to make alternate products like biofuel.
After Biden sent his letter, Exxon-Mobil dropped him in response. The oil giant noted several inconvenient facts to the president’s narrative, even going so far as to discuss investments that have cost the company money in an effort to keep production going in this difficult (mostly government-caused) environment.
The statement is clear and concise, and while it’ll do nothing to persuade the climate hysterics, the facts within are undeniable. Despite the often-repeated claim that oil companies are just pocketing gobs of cash, Exxon-Mobil points out that they have invested double what they’ve made over the last five years. Contrary to the president’s notion that they are purposely holding back production, they have increased production by 50 percent.
But I think the most important part of the response comes at the end. While Biden hounds the oil companies to create a scapegoat for his failed policies, Exxon-Mobil is asking for “clear and consistent” policies. That’s really the key to this entire thing. When a president spends years saying he’s going to crush oil production and then enacts policies that do just that, the idea that it is now the fault of oil companies for not producing more is asinine. It’s a pathetic attempt by a feeble, old man to deflect blame for his failures.
Lastly, the statement specifically mentions the need for more infrastructure, such as pipelines. That’s a nod to Biden’s canceling of Keystone XL. After all, how are you going to refine more gasoline when the supply of oil is being pinched by the government? The president could greenlight Keystone today and it would have an effect on oil prices because the markets are speculatory. He won’t, though.
In the end, I think Americans know where the blame lies here. Biden’s weak attempts to escape responsibility will only harden the opposition to him.