U.S. energy secretary urges refiners not to increase fuel exports
WASHINGTON (Reuters) – The U.S. Power Secretary urged home oil refiners this month to not additional enhance exports of fuels like gasoline and diesel, including that the Biden administration may have to think about taking motion if the vegetation don’t construct inventories.
U.S. refiners have boosted oil product exports this month as home crude oil manufacturing rose and international gas demand continued to recuperate.
Power Secretary Jennifer Granholm, in a letter despatched Aug. 18, urged seven refiners together with Valero, ExxonMobil and Chevron, to construct provides of fuels as america enters peak hurricane season.
“Given the historic stage of U.S. refined product exports, I once more urge you to focus within the close to time period on constructing inventories in america, slightly than promoting down present shares and additional growing exports,” Granholm mentioned within the letter despatched to refiners, a replica of which was seen by Reuters.
Excessive U.S. oil product exports have been a priority for the administration of President Joe Biden this summer time as gasoline costs briefly hit a report of $5 a gallon, serving to drive inflation to 40-year highs. Gasoline costs have since fallen to about $3.86 per gallon.
Federal climate forecasters have projected an above-average Atlantic hurricane season, which is usually a perilous time for refineries. Nonetheless-high gasoline costs stay a menace to Biden’s fellow Democrats forward of the Nov. 8 midterm elections, once they hope to retain management of each chambers of Congress.
Granholm mentioned the administration is speaking with state officers alongside the East Coast, the place gasoline ranges are at their lowest in practically a decade. It’s placing the gasoline and heating oil reserves within the U.S. Northeast, which maintain 2 million barrels of gas, on “lively standby” for potential launch, and getting ready different emergency contingency actions, she mentioned.
The administration hopes that firms will “proactively handle this want” of constructing inventories, she mentioned. If that doesn’t occur, the administration “might want to take into account further federal necessities or different emergency measures,” Granholm added, with out offering particulars.
In a wide-ranging assembly with the identical refiners in June, Granholm backed off a plan to ban U.S. gas exports, however the thought has by no means totally left the desk.
Refiners have mentioned a ban might swamp home markets with gas and trigger some vegetation to chop output, which might lower provide and put upward stress on costs.
As well as, Northeast refiners import crude and fuels, commerce that may very well be affected by an export ban.
“The export discuss is at greatest a distraction; at worst, counterproductive to cost and provide,” mentioned a supply aware of Granholm’s talks with refiners.
(Reporting by Timothy Gardner; Modifying by Invoice Berkrot)
