WASHINGTON, June 23 (Reuters) - U.S. Energy Secretary
Jennifer Granholm expressed interest in potentially lifting
smog-fighting gasoline rules to fight high pump prices and
backed off a plan to ban fuel exports during a wide-ranging
meeting with refiners, two industry sources said on Thursday.
With tensions high between U.S. President Joe Biden and Big
Oil, the two sides entered the meeting with a promise to work
together in good faith. They left still far apart on long-term
solutions, the industry sources familiar with the talks said.
But both the Energy Department and the sources said talks will
Biden, a Democrat, has criticized industry CEOs for reaping
huge profits from a fuel supply crunch exacerbated by Russia's
invasion of Ukraine. Biden met briefly with state officials to
talk about increasing wind energy on Thursday, but he skipped
the meeting with refiners.
Granholm struck a conciliatory tone, the sources said, and
acknowledged the lack of viable short-term options to combat
An Energy Department spokesperson said Granholm did not tell
refiners the administration was leaning toward any specific
actions as a result of the meeting. Granholm "reiterated that
(Biden) is prepared to act quickly and decisively, using the
tools available to him as appropriate," the department said.
Industry members had hoped to convince the administration
not to ban U.S. fuel exports to combat record gas prices.
Granholm all but took the option off the table as a short-term
solution, the sources said.
The White House had already been mulling lifting summer
gasoline restrictions that require refiners and blenders to
avoid lower-cost components like butane to prevent smog.
Granholm told refiners that the White House will discuss the
issue with the U.S. Environmental Protection Agency, the sources
said. It was not immediately clear how much it would cut the
price of gasoline but analysts say any change would likely be
The average price of gasoline was $4.94 per gallon on
Thursday, according to data from the American Automobile
Association, 34 cents more than a month ago, and $1.87 more than
a year ago.
Refiners cut capacity during COVID-19 crisis shutdowns, but
prices have skyrocketed this year with post-pandemic demand and
a global fuel crisis after Western nations sanctioned Russian
Exxon Mobil, Chevron and other refining
giants reported a massive jump in profits at the end of 2021 and
the first quarter of this year and have showered shareholders
with buybacks and dividends.
The White House has targeted the refining industry's
decision to idle about 1 million barrels per day of production
capacity since 2020, arguing they should use their bumper
profits to restart plants or units and help fill the supply gap
that is driving up prices.
Refiners have a "patriotic" duty to help with supply, the
White House has said.
The meeting Thursday with seven companies included
executives from Exxon Mobil, Chevron, Marathon and Phillips 66
Refiners say investing in reopening plants carries
significant financial risks. The Biden administration came into
office vowing to shift the country away from fossil fuels that
contribute to climate change and has secured billions of dollars
for the electric vehicle industry.
Gretchen Watkins, Shell Plc's president of U.S.
operations who attended the meeting, said Granholm acknowledged
that Shell and other companies, "have diminished refining
capacity because were busy converting century-old assets to
Meeting participants discussed technical, economic, and
policy hurdles to increasing domestic refining capacity and what
the companies are doing to keep existing operations safely
online, the Energy Department said. They also talked about
actions that could increase preparedness on the Eastern seaboard
as the country moves deeper into the Atlantic hurricane season,
On Wednesday, Biden called on Congress to pass a three-month
suspension of the federal gasoline tax. Lawmakers within his own
party opposed that, saying it may provide little relief while
blowing a hole in a Highway Trust Fund budget that the tax
A group of 25 drilling and pipeline industry groups
including the American Petroleum Institute sent a letter to
Biden on Thursday urging him to visit America's vast energy
sources ahead of a July trip to Saudi Arabia, where he is
expected to encourage the oil-rich country to boost output.
"American-made energy solutions are beneath our feet, and we
urge you to reconsider the immense potential of U.S. oil and
natural gas resources that are the envy of the world to
benefit American families, the U.S. economy and our national
security," they wrote.
(Reporting by Jarrett Renshaw in Philadelphia and Timothy
Gardner and Laura Sanicola in Washington and Gary McWilliams in
Houston; Editing by Heather Timmons, Carmel Crimmins, Josie Kao
and David Gregorio)