The recent spike in gas prices is in large part due to a lack of refining capacity. As oil demand has returned to pre-pandemic levels, global refining capacity has declined by 3 million barrels per day, and U.S. capacity alone has declined by 1 million barrels per day.
This oil refining capacity shortage is the result of a wave of refinery closures after demand for fuel plummeted during the COVID-19 pandemic, which makes sense. What doesn’t make sense: despite record gas prices, oil companies have demonstrated little interest in restarting refineries that were shuttered during the pandemic.
Abigail Spanberger (D-VA-07) joined Raja Krishnamoorthi (D-IL-08) and Sharice Davids (D-KS-03) in introducing a resolution urging the Biden administration to use its powers under the Defense Production Act to expand America’s short-term oil refinery capacity and curtail the refining bottleneck that is contributing to rising gas prices.
While the White House has previously issued letters to the industry pressing for increased production, this legislation presses the president to take real action — rather than issue more statements.
“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,” states the resolution.
The resolution’s focus on a short-term increase in capacity is focused on addressing the current price spike facing consumers — while also avoiding long-term impacts on the climate and making sure we continue to pursue policies that support high-paying American energy jobs and lessen our reliance on fossil fuels.
The resolution continues, “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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Chris Graham
