U.S. Energy Secretary tells North Texans to expect record gas prices to keep rising
NORTH TEXAS (CBSDFW.COM) — Jamie Small told us each time she fills up her family's SUV it costs her nearly $90. "This is every three days."
She's working overtime, seven days a week, to try to keep up with rising prices for gas, food, and everything else.
When asked how long she can keep this up she said, "I can't, I can't. I'm going to have to find another means of transportation or ask someone for a ride and we can split the gas."
In North Texas, U.S. Energy Secretary Jennifer Granholm said she expects the squeeze at the pump to grow even tighter because of the rising global demand for oil and the fact that more countries are banning Russian oil because of the ongoing war in Ukraine.
"You will see further upward pressure on prices before you start to see that come down."
She said oil and gas companies need to boost their production so that prices will drop. "They're making profits at record levels. We are calling them to be a part of this, to be American, be focused on increasing production to relieve the pain people are experiencing."
Granholm answered reporters' questions Friday after congratulating Lennox International in Carrollton for winning the Department of Energy's Cold Climate Heat Pump Technology Challenge.
The technology she said promises to slash customer's energy bills.
President Biden wrote oil and gas executives this week telling them to work with the administration to come up with solutions.
But in a letter to the President, the American Petroleum Institute said his policies are partially to blame for the situation. "Your administration has restricted oil and natural gas development, canceled energy infrastructure projects, imposed regulatory uncertainty, and proposed new tax increases on American oil and gas producers competing globally."
When asked if the administration's decisions last year to cancel the Keystone XL pipeline and issuing an executive order to pause oil and gas leases on federal lands and waters contributed to the rising prices now, Granholm rejected that. "The Keystone pipeline would not have been completed for years. That is not relevant to this. What is relevant is making sure the oil and gas industry continues and produce an increase in production."
Granholm said if the oil and gas companies took half of their profits and invested them into increasing production, there would be hundreds of more shale wells and hundreds of thousands of more barrels of oil on the market every day. "Ultimately, we are hopeful that the energy companies, the oil and gas companies see it in their interest to make sure gasoline is priced at a reasonable level and that they are part of the solution rather than part of the problem that is causing pain for people."
Bud Weinstein, who retired from the Maguire Energy Institute at SMU and is now an independent energy expert, said the administration's policies have had an impact on the situation. "Keep in mind that the Biden administration has clearly been hostile tor fossil fuels since the get go. Over the last 15 or 16 months, we saw the cancellation of the Keystone pipeline, we've seen the slow walking of permits to drill on federal lands and offshore, it's almost impossible to build a pipeline anywhere, we just saw an increase in the ethanol mandate, which will boost gasoline prices by one to two cents a gallon. Then we have all this talk about ESG, investing environmental social governance. The SEC is saying that the companies need to start reporting how their investments are affecting greenhouse gas emissions. There are lots of there are lots of pension funds and retirement funds that just won't invest in fossil fuel companies. So it's a very, very complex background that makes it difficult for executives of oil and gas companies to justify a lot of new investment."
The Biden administration and the auto industry are also planning for more electric vehicles and moving away from vehicles with internal combustion engines.
Weinstein said, "Against that backdrop, if you're in the fossil fuel industry, you haven't been making significant new investments and capacity to expand production, or to expand refining."
The Biden administration has requested a meeting with refineries to see if they can increase capacity.
Experts have said while refineries are operating at 94% capacity, which is high historically, Granholm said at least six refineries in the U.S. and more abroad went offline during the COVID-19 pandemic.
Some have converted to biofuels, but Granholm said she wants to ask about the other facilities and whether they could restart production. "Are they fully shut down in which case it will take a long time. What's the status of them, what is needed to see if there is a potential to increase capacity for production."
Weinstein said, "It's not easy to add capacity to the refining sector. It's an expensive proposition. And we've actually been reducing capacity in recent years in the anticipation of lower demand for gasoline and diesel. We need to be increasing our refinery capacity. I don't know right now that any large refiner is planning to increase their capacity to process crude oil.
He said for now, oil companies have increased drilling and production here in Texas.
But Weinstein also said that he wouldn't be surprised to see a gallon of gas rise to $5.50 in the Lonestar State.
That's not what Jamie Small wants to hear. "They need to get this under control because this is not going to work."
