Energy Secretary Chris Wright Talks Fuel Prices

0:00For Begrim, one of Thailand's oldest established companies, growth does not begin with the deal. It begins with trust. Later in this podcast, hear how that approach has taken the company from Thailand to South Korea and the United States. Bloomberg Audio Studios Podcasts, Radio, News Joining us now live from the convention hall is the US Energy Secretary, Chris Wright. Mr. Secretary, welcome back to Bloomberg TV and Radio. As we speak, and as this convention kicks off, it is against a backdrop of higher crude prices once again, with Brent topping $100 a barrel today. Diesel, of course, is at a record marching towards $6 a gallon. When can Republicans credibly tell the American people that that situation is going to get better? The problem is more than oil prices. The bigger problem is refining capacity. Under the Biden administration, they closed over a dozen refineries in the US. Gavin Newsom has closed two more

1:05large ones in the last 12 months in California. We're going the other direction. We're going to expand American refining capacity. I think we'll see gasoline prices go down in the coming weeks. Diesel is a bigger challenge, but we're working on it aggressively every day, every day. Well, can you give us some detail as to what exactly that effort entails? How much of this is simply a factor of things that are beyond you as energy secretaries control? Like, for example, Ukraine going after Russian refineries? Are there limits to what you're able to do to address this? Why don't you get a grab? Yeah, they're Ukrainian attacks on Russian refinery. They're probably the single biggest problem with diesel. Russia was a large exporter of diesel. Now they're not exporting anything. Russia was an exporter of gasoline, and now they're a meaningful importer of gasoline. China has also crimped back on their refining capacity. That's that's pushing upward pressure, pressure on global prices.

2:06But in the United States, we're changing regulations, allowing our refineries to produce more. We're investing in Venezuela to see both their oil production go and restore some of their refining capacity. We've done Jones-Act waivers to make sure California and New England have supplies of fuel that are critical for their livelihoods. So we're doing everything we can, and I think you will see this roll over and prices headed down. But these are big challenges. Thank God we have an energy addition Trump administration. Are we being a world to hurt right now? Well, of course, this administration, while it has pushed for greater American energy, it also has decided to prosecute this war against Iran, given the hostilities that we have seen flare up once again in just the last several days. In that region, the US yesterday attacking five Iranian tankers has that had a direct impact on what is able to get out of the street of Hormuz. Do you have an updated figure for us, the latest figure from yesterday or today?

3:10I do. The data as of this morning, we're at the highest since the start of the conflict, just under 11 million barrels a day, seven-day average of oil and oil products going out of the straight on ship, on water, and then another three to five million barrels a day from the bypass pipelines. So we continue to grow the oil and oil products coming out of the Gulf. The American Navy is doing a phenomenal job there, so a lot of good progress there. But I got to say, a lot of Americans don't fully appreciate what we're doing. Iran is not that far away from a nuclear weapon. If the president had taken the politically easy route and said, I'll just kick this can down the road to my successor. Imagine a world where death to America, the biggest troublemaker in the world is now nuclear armed. That's just not an acceptable outcome. Might be politically convenient to forget about Iran for a little bit. But this president's about leadership, about solving problems now and handing a better world to our children and our grandchildren.

4:13Well, so as you say, 11 million barrels has been able to make it out of the straight. Do you foresee how you heard from commercial entities that they're more hesitant to transit if there seems to be tanker-oriented attacks that are being perpetrated by Iran and by the United States? Does that create greater uncertainty for these commercial operators? No, it is still a conflict zone in the strait. There's no doubt about that. The transits are happening because of the US Navy. So these are either national fleets from the Gulf nations. Some of these are commercial fleets, but they're on the aggressive side for sure. We're going to continue to ramp that up. We need a change in regime or a change in the policy of the Iranian regime to ultimately return to normal. But that will be to the enormous benefit of generations of Americans. It is a tough problem. Thank God we have a tough president who's thinking long-term about energy and economic security for America and the world.

5:16Well, and as he formulates his thinking around what economic security entails, he of course has decided that tariffs and going against trade partners is something that he is actively pursuing. And we're seeing that on full display with the trade war between the US and Canada that has ramped up in just the last few days. It's with that in mind that I ask you. I don't know if you saw the news that Enbridge is buying tall grasses, crude business, but should a Canadian company be allowed to buy into a major US oil pipeline? Oh, absolutely. Look, the Canadian American energy systems have been linked together for decades to the benefit of both nations. To the benefit of both nations. You've got to look at the big picture here. Is President Trump working to get better trade terms for American businesses into Canada? Of course he is. He's doing that with every country on Earth. But Canada is our neighbors and there are partners for the long term. President Trump believes in that. He's just working to approve the terms of trade, not to end trade,

6:19not to isolate ourselves from Canada, none at all. So you are confident that if this trade war continues to escalate, that energy will remain a separate issue and not be affected by it. I think that's a fair assumption. Energy trade is critical between our countries and nations. Just remember, President Trump's long-term goal is to get the best terms of trade with all nations around the world. This is a process going on right now, which you're seeing a sausage making. Well, yes, we do care very much about the sausage making, though, as it pertains to policy here on Bloomberg, often, Mr. Secretary. I want to go back to something you mentioned a moment ago, which is of course the deal that the US has pursued in Venezuela and the access to 65 billion barrels of oil reserves there. I know you talked on the ground in Caracas with my colleague, Tyler Kendall, about this. Have you heard from any further private companies like the commitment chevron made in Caracas while you were there that they are considering greater investment in

7:21Venezuela? Has this moved forward at all in what, 10 days since this deal was announced? Absolutely. Look, there was a lot of companies already working on deals in Venezuela all along since the US intervention. This has increased the interest even more for companies that were engaged and convinced a few other companies, you know? The outlook for investment in Venezuela continues to look more attractive and more secure with a larger US role. So you will see in the coming weeks and months some pretty significant announcements of additional companies investing in Venezuela. I believe by the end of next year, we'll have seen a doubling of Venezuelan production from before the intervention. So to think of a large oil reserve country like Venezuela to double their oil production in two years, I don't think that's ever happened before in human history. This is things moving at Trump's speed and this is our energy policy way ahead of schedule in Venezuela. I don't suppose you could give me the names of any of those companies we could expect to hear from

8:24in the coming weeks and months, Mr. Secretary. No, that would not be my job. My job is to enable American businesses and international businesses to grow the energy system to better the world. But I'm definitely not doing any press releases for any of them, but rest assured you'll hear many more announcements. All right, fair enough. We also won't hear directly from you on this stage here in Dallas, right, Mr. Secretary? Why don't you have a speaking slot? Oh, look, I'm speaking many times in Dallas at all different venues and all different settings, but I couldn't be more proud of this administration. I just got to see our Scott Turner, our housing and urban development secretary just rocked to the stage, rocked my world, warms my heart. So a lot of great patriots in the administration that are all working to make lives better for Americans. I'm proud to be on that team. And finally, Mr. Secretary, in our final moment with you, by midterm election day in November, will prices of the pump be any lower on average than they are today?

9:30I think quite likely they will be. Quite likely they will be. All right, we will leave it on that note. The US Energy Secretary, Chris Wright, joining us live from the convention hall here in Dallas, Texas. A new market, a new partner, a new project. Growth can sound simple, but for one of Thailand's most enduring companies, BeGrim, expansion starts long before any deal is signed. It starts with relationships. It starts with trust. We follow our vision. That's why we went to America. We enter into US market for the small hydro project. In America, what? In Malaysia. There are many, many companies that are very successful in their own metrics. And so I think everybody has to define their own way of success. I would find success by being a good part of society. People look at us say, yeah, this company does well for society. That I would define as success. Find out more by searching BeGrim, stewards of compassion, wherever you get your podcasts.

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