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Tribune News Service
Tribune News Service
National
Ari Natter and Jennifer A. Dlouhy

White House takes closer look at controversial gasoline export ban option

WASHINGTON — White House officials have asked the U.S. Energy Department to analyze whether a ban on exports of gasoline, diesel and other refined petroleum products would lower fuel prices, an indication the controversial idea is gaining traction in some corners of the Biden administration.

The White House request follows a tense meeting between top administration officials and oil industry executives and comes amid growing concern that high gasoline prices pose a political threat to Democrats in the November elections, said a person familiar with the matter. The requested analysis would include an examination of how an export ban would affect gasoline prices if imposed for 30 or 60 days, said the person, who asked not to be named discussing private deliberations.

An export ban would mark the most radical step yet by the Biden administration to tackle gasoline prices that surged over the summer and have risen again recently, just four weeks before midterm elections that will decide whether Democrats maintain control of the House and Senate. Oil producers and energy analysts have criticized the idea, saying it could backfire by ultimately raising costs even more for U.S. consumers, while disrupting markets and cutting off European allies in their time of need.

The move underscores increasing consideration within the Biden administration of potential export limits. Government officials had raised the prospect of curbing exports in Friday’s meeting with executives from some of the nation’s largest oil companies.

Representatives of the White House and Energy Department didn’t immediately respond to requests for comment on the analysis.

Recent polling shows gasoline prices — which remain stubbornly high in western states such as California — are a drag on Democratic candidates. Biden administration officials also have been concerned about low fuel inventories in the Northeast U.S.

The heads of the American Petroleum Institute and American Fuel & Petrochemical Manufacturers said in a Tuesday letter to Energy Secretary Jennifer Granholm that limiting exports would disrupt global markets, harm U.S. national security interests and raise fuel prices domestically.

“Banning or limiting the export of refined products would likely decrease inventory levels, reduce domestic refining capacity, put upward pressure on consumer fuel prices and alienate U.S. allies during a time of war,” the trade groups said in the letter.

The Biden administration is looking “at all tools available” to protect U.S. consumers and fulfill its commitments to the country’s allies, an Energy Department spokesperson said in response to the API and AFPM letter.

“Putin’s war in Ukraine has disrupted the energy markets and instead of displaying an ability to ensure that the American consumer and our allies have reliable supply at a fair price, energy companies are raking in record-high profits while our inventories are at record lows,” the spokesperson said.

The risks of domestic fuel shortages is particularly acute in the import-reliant East Coast. Limits on pipeline capacity and U.S.-flagged tankers capable of carrying gasoline and diesel from the Gulf Coast to New England mean the area depends on imported fuels, the groups said. And with fewer U.S. fuels on the world market, the price of those imports could increase too.

“There simply is not sufficient pipeline connectivity or the range of economic shipping alternatives that would be required to transport significantly more fuel to the East Coast from refineries in the Gulf,” the API and AFPM said in their letter.

“Banning exports of fuel from the United States will not eliminate this challenge or make it easier and more affordable to supply American-refined fuel to the East Coast. Instead, by cutting into global fuel supplies, it would likely raise the cost of fuel imported into the East Coast from the global market.”

As recently as Sept. 23, Granholm said restrictions were not being considered at the time.

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