Energy Secretary Chris Wright Talks Diesel Prices

Chris Wright · U.S. Department of Energy

DOE utility loans will strengthen grid reliability and reduce winter and summer power price spikes within one to three years.

Wright describes the DOE's roughly $5 billion loan to Alliant as capital infrastructure that will take one to three years to complete. He argues the grid must add available electricity and become robust enough for winter cold and summer peaks. He says the loans, made through the Energy Dominance Financing office, are low-risk so taxpayers get repaid, and that they will lower the price spikes that come with extreme weather. He contrasts this with the previous DOE, which he says ignored affordability.

“This is utility sector, as you mentioned, but this is about math and humans. It'll lower the price spikes that come when it gets very cold in the winter or very hot in the summertime.”at 4:32

Chris Wright · U.S. Department of Energy

America's grid will keep running mainly on natural gas, nuclear and coal for decades to come.

Wright says the US electrical grid runs today on natural gas, nuclear and coal, and he expects that to remain true decades from now. He presents this alongside a role for solar, batteries, fusion and geothermal. He cites a battery storage and LNG storage project in Wisconsin as a way to handle peak demand, which he says drives price.

“America's electrical grid today runs on natural gas, nuclear, and coal, and that'll be true decades in the future as well.”at 11:57

Chris Wright · U.S. Department of Energy

High crude and fuel prices reflect a global refining shortage, not crude supply, so refining capacity must expand.

Wright says the high prices seen today are about a shortage of refining capacity around the planet rather than a lack of crude. He says the US military has kept oil flowing out of the region despite the conflict. He argues the government is expanding US refining capacity and working with allies to increase the flow of refined products. He also blames the previous Democratic administration's policies of closing coal plants and refineries for the broader energy-price problem.

“The high prices we see today are really about a shortage of refinery... Refining around the planet, and we're doing a lot to expand refining capacity in The United States and to work with friends and allies abroad to increase the flow of refined products.”at 6:49

Chris Wright · U.S. Department of Energy

Diesel is down 20 cents from its peak and will fall significantly once more refined diesel reaches the market.

Wright argues that the world is 'giantly short of diesel' today. Russia cannot export much diesel because the war consumes its own supply and Ukrainian strikes have knocked out its refineries. Diesel is still 20 cents a gallon below last month's peak, and he expects it to drop significantly. Getting there requires more refined diesel on the global market, which he expects to come from higher exports out of the Arabian Gulf and China re-entering diesel supply. He treats this as a challenge the government is working on daily. No timeframe is given.

“diesel is still down 20¢ a gallon from its peak last month. We will see it drop significantly. But to get there, we need more refined diesel onto the global marketplace.”at 13:59

Chris Wright · U.S. Department of Energy

The Iran conflict is a short-term energy disruption, justified because a nuclear-armed Iran would be far costlier.

Wright concedes that starting kinetic conflict in the Middle East, a major energy-producing region, affects energy supply. He argues a nuclear-armed Iran would have enormous consequences for long-term energy prices and regional stability, and that President Trump would not hand his successor that outcome. He calls the current disruption 'a short term interruption in affordable energy, but it's for a strategic reason.' He says the economic cost, plus 18 American soldiers killed, is still modest compared with a nuclear Iran. He frames the broader price problem as structural and caused by Democratic energy policy.

“But a nuclear armed Iran would have enormous consequences, not just for long term energy prices, but for peace and stability in the region.”at 5:42

Chris Wright · U.S. Department of Energy

Wind and solar subsidies and mandates have raised power prices; solar only has a role in competitive markets.

Wright argues the government ended subsidies for solar and wind and the mandates that push them onto grids, which he says drive up electricity prices. He says solar produces well in summer but is 'completely worthless' in cold, dark winters, so it is a 'cost center' in places like Wisconsin. He cites states with renewable portfolio standards, which he says have 50% higher electricity prices than states without them. He says solar and storage still have a role in a competing marketplace without subsidies, and that some states will keep forcing solar onto the grid.

“And subsidizing and forcing wind and solar onto electricity grids around the country. Has been a disaster. You can see it in the states with renewable portfolio standards that have forced wind and solar. They have 50% higher electricity prices than the states that don't have those.”at 10:23

Chris Wright · U.S. Department of Energy

Suspending Russian diesel export sanctions for six months was designed to pressure Russia toward a ceasefire.

Wright says the administration is looking for creative ways to create incentives to end the war. He describes a six-month temporary suspension of sanctions on Russian diesel exports only, not oil or other products. He argues diesel was chosen because the world is short of diesel and Russia cannot export much of it, since its war effort consumes its diesel and Ukrainian strikes have knocked out its refineries. He says Russia could benefit from exporting diesel only by ending the war effort or agreeing to a ceasefire on energy or the war, and any such outcome would be a 'home run.'

“He's looking for any creative way to create the right incentives to end that war. That that was the idea of this for six months just temporarily suspending the sanctions on the export of diesel, not on oil, not on any other Russian products, only on diesel.”at 13:02