Reps. Krishnamoorthi, Spanberger, and Davids Introduce Legislation Urging President Biden To Use Defense Production Act To Expand Short-Term Oil Refinery Capacity To Reduce Gas Prices
WASHINGTON – Yesterday, Representatives Raja Krishnamoorthi (IL-08), Abigail Spanberger (VA-07), and Sharice Davids (KS-03) introduced a resolution urging President Biden to use the Defense Production Act to expand short-term oil refinery capacity to eliminate the refining bottleneck that is currently contributing to high gas prices. While historic fuel prices have been primarily driven by high crude oil prices, the most recent spike in gas prices is in large part a product of a lack of refining capacity as oil demand has returned to pre-pandemic levels but global refining capacity has declined by 3,000,000 barrels per day and U.S. capacity alone has declined by 1,000,000 barrels per day. This shortage of oil refining capacity is the result of an unprecedented wave of refinery closures as demand for fuel plummeted during the COVID-19 pandemic. However, despite the current record gas prices and near historic profits, oil companies have shown little interest in restarting refineries that were shuttered during the pandemic. This follows Congressman Krishnamoorthi's June 2nd letter to President Biden urging him to use the Defense Production Act in the same manner.
While the White House issued letters to the industry yesterday pressing for increased production, the new legislation urges the President to take additional action, stating "in order to ensure sufficient refining capacity to reduce fuel prices and prevent fuel shortages in the near term, the President should use authorities granted him by the Defense Production Act of 1950 to provide targeted technical and financial assistance to restart certain idled refineries for a limited time." The resolution's focus on a short-term increase in capacity is to address the current price spike facing consumers while also avoiding long-term impacts on the climate, noting "a long-term expansion of oil production beyond prepandemic levels could put us on a path to climate catastrophe, but restarting idled American oil refineries for a limited time could reduce gas prices and cool inflationary pressures without endangering our climate goals."
The full text of the resolution is available here.
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