President Joe Biden recently called on U.S. oil refiners to produce more gasoline and diesel, saying their profits have tripled during a time of war, once again blaming Russia as Americans struggle with record-high prices at the pump.
Biden warned the leaders of major U.S. oil producers and refiners like ExxonMobil, Chevron, and Valero that he was “prepared to use all reasonable and appropriate Federal Government tools and emergency authorities” to increase refinery capacity, according to a letter obtained by Axios.
“With prices for your product where they are today, you have ample market incentive to take these actions, and I recognize that some of you have already begun to do so,” Biden wrote in the letter.
However, according to a June 7 report from the Energy Information Administration (EIA), refining capacity utilization in the US surged to 91.3% in March and is expected to average 94% between July-September.
The EIA noted that total output will remain relatively low because total domestic capacity has dropped by 900,000 barrels per day since 2019.
Mike Sommers, the CEO of fossil fuel industry group American Petroleum Institute, blamed Biden and Democrat policies in a statement Wednesday.
“While we appreciate the opportunity to open increased dialogue with the White House, the administration’s misguided policy agenda shifting away from domestic oil and natural gas has compounded inflationary pressures and added headwinds to companies’ daily efforts to meet growing energy needs while reducing emissions,” Sommers said.
In addition to high gas prices, it is now being reported that truckers are becoming increasingly concerned over the severe diesel fuel shortage which may cause a devastating impact on the delivery of food there’s already a shortage of.
According to industry experts, the East Coast of the U.S. is reporting its lowest seasonal diesel inventory on record, and the shortage is about to cripple an already fragile supply chain.
“We’re really headed for a bad situation if we can’t get this fixed,” Joe Cain, a truck driver told WBAL-TV 11 News. “As an owner-operator, you might have to stop driving at all, or go work for something else. We don’t know, we might all be on unemployment.”
The widespread shutdown of refineries across the US over the past 15 years doesn’t exactly help the situation either. Bloomberg’s Javier Blas recently reported that the east coast has lost over half of its refineries since 2007.
“In the past 15 years, the number of refineries on the U.S. East Coast has halved to just seven. The closures have reduced the region’s oil processing capacity to just 818,000 barrels per day, down from 1.64 million barrels per day in 2009. Regional oil demand, however, is stronger,” Blas wrote.
The recession of 2008 led to the shutdown of some east coast refineries, but most of the recent shutdowns, like the shuttering of a major Philadelphia refinery, were due to regulations and compression of margins.
In addition to the shuttering of refineries, several pipelines being shut down by the Biden administration appears to be a deliberate action that is also further causing a devasting impact on the global supply chain.
According to a recent report from JP Morgan, regular gas could hit $6.20 per gallon nationally by August, analysts predict in the report.
In some parts of the country, emergency responders have already burned through most of their annual fuel budget and are struggling to remain operational.
The chief of a central Indiana fire department said recently that he’s already making changes to keep his trucks rolling in emergencies.
So far this year, the Bargersville Community Fire Department has run more than 1,500 calls, and fuel costs rose from about $18,000 to nearly $42,000. Fire Chief Eric Funkhouser said the recent figure already represents nearly two-thirds of their annual fuel budget.
“Not since I’ve been doing this, and probably not for a long time that we’ve seen this,” he said when asked if he’s ever seen that kind of cost increase,” Funkhouser said.
As gas prices spiked to another all-time high Thursday, a police department in Michigan announced that they will not be able to respond to all emergency calls because they can’t afford the fuel.
President Biden is blaming a war happening more than 4,000 miles away for the rapidly rising cost of gas prices at home. “I’m doing everything in my power to blunt Putin’s gas price hike,” Biden said during a speech for the AFL-CIO.
Speaking to reporters recently, Biden again blamed Russia saying Russia’s war in Ukraine was the cause of the surge in the cost in the price of oil and gas.
“It’s outrageous what the war in Ukraine is causing,” Biden said.
But Gas prices have been surging since well before the war, and the Biden administration continues to prolong the war in Ukraine by continuously sending arms to fuel a war that is all but futile for Ukraine. Despite warnings from doctors about a potential surge in all-cause mortality, and economists warning of economic collapse, the Biden administration was also a strong supporter of the nationwide shutdown. This decision produced the initial supply chain issues that led to many of the problems we’re experiencing today.
According to Insider, diesel is in its worst crisis since the 1970s and localized rationing may be making a comeback soon. Many Americans today are far too young to recall the fuel shortages in 1970s America, but the crisis sparked mayhem in the streets and quite literally forever changed the nation.
“We’ve seen this dance before,” writes historian Meg Jacobs, author of Panic at the Pump. “If you are of a certain age, you surely recall sitting in the back of your family’s station wagon waiting hours on end in the 1970s to get a gallon of gas.”
The first of the 1970s fuel panics began in 1973 after the Organization of Petroleum Exporting Countries (OPEC) raised the price of oil by 70 percent. This, coupled with the US embargo — which led to a 400% increase in the price of oil — sparked the 1970s crisis, and threw the world’s economy into a sharp recession within a matter of days.
