Energy secretary calls on US refiners to limit exports ahead of hurricane season

Energy Secretary Jennifer Granholm called on major U.S. oil refiners to build up capacity and reduce exports of refined products ahead of the winter in a letter shared with The Hill. 

In the letter, written last week, Granholm noted the reduced availability of diesel inventories along the East Coast, which are nearly 50 percent below the five-year average. Refined product exports are at a record high.

A likely above-average hurricane season, followed shortly by the winter heating season, is likely to compound demand in the northeast.  

“Given the historic level of U.S. refined product exports, I again urge you to focus in the near term on building inventories in the United States, rather than selling down current stocks and further increasing exports,” Granholm wrote, saying that such a buildup would be an alternative to emergency measures such as releases from the Northeast Gasoline Supply Reserve. 

The letter was reported first by The Wall Street Journal. The paper accused Granholm in a Wednesday editorial of attempting to strong-arm the energy industry and abandoning European nations weaning themselves off Russian imports. 

An Energy Department official sharply disputed this characterization, saying “as we get closer and closer to peak hurricane season right now, and we’re running our internal models, we are calling on [the industry] to be more proactive.” 

“We understand that they do have plans in place for their refineries and getting them back up and running,” the official added, “but we also want them as they’re increasing their exports to also look at the bigger picture … and making sure they’re making the right decisions to ensure there’s physical supply for American consumers and our allies.” 

The official cited another letter, also shared with The Hill, to Granholm from the six New England governors urging action ahead of the winter.

The governors asked the department to aid in modernizing New England’s energy reserves, as well as considering suspending the Jones Act, which restricts delivery of U.S.-exported liquefied natural gas into the region. 

In a statement to The Hill, American Petroleum Institute President Mike Sommers said: “History has shown that federal market intervention has long-term negative consequences for secure, reliable and affordable energy for Americans and the best path to build redundancies for unprecedented events, including hurricanes or global turmoil, is to increase access to American energy.”