Landry's Diesel Embargo Idea Puts Him at Odds With His Own Industry

Diesel hit $6.51 a gallon nationally on Monday, according to AAA, a jump of nearly a dollar in a single month and close to three dollars higher than a year ago. That is the number driving Gov. Jeff Landry's latest fight, and it is a real one for the trucker hauling shrimp out of Houma or the farmer running a combine outside Rayville.

Landry pitched his fix on social media Friday and took it to CNBC on Monday morning: a 90-day pause on U.S. diesel exports, aimed squarely at Europe. "Europe has done nothing to help America in either one of those two positions, but yet they're sucking the energy out of America and making American citizens pay for it," Landry said, referring to the fuel shortages tied to the conflict with Iran and Russia's war on Ukraine. His argument is simple and, for a lot of Louisiana families staring at a diesel pump, emotionally satisfying: stop shipping our fuel overseas while we're paying record prices at home.

It did not take long for Louisiana's own oil patch to say no. Tommy Faucheux, president of the Louisiana Mid-Continent Oil and Gas Association, a 103-year-old group representing the industry across the state and the Gulf, put out a statement Monday calling the governor's idea "a misguided proposal." His reasoning is worth taking seriously. "Pipelines for domestic diesel transportation are already at max capacity," Faucheux said. "Without available capacity to redirect supply, halting the export of American diesel would force refineries to reduce production which would also decrease the production of gasoline." In other words, you cannot just bottle the fuel up. If it cannot move by pipeline to where it is needed, refiners cut back, and gasoline supply takes the hit right alongside diesel.

The national refining trade group, the American Fuel and Petrochemical Manufacturers, made the same case Monday, warning that an export ban would mean "less U.S. fuel production, tighter supplies, greater energy security risks and higher prices." Energy Secretary Chris Wright told The Daily Caller last week that supply, not restriction, is the answer. "The thing we need when the prices are high is more supply," Wright said. "If you start putting barriers on flows, pretty quickly you'll reduce the production, and you'll have less supply." That is standard, sound economics, and the mechanics are hard to dispute. U.S. refineries churn out more than 5 million barrels of distillate a day, per the Energy Information Administration, and historically exported about a quarter of it. This year, with Europe scrambling to replace Russian supply and Iran destabilizing the picture further, that export share has climbed past 35%, redirected largely away from old customers like Mexico and Brazil and toward European buyers.

Landry is not out on this limb alone. Iowa Sen. Chuck Grassley wrote to President Trump over the weekend making nearly the same pitch, framing it as leverage: "If our govt can embargo chips to China it can embargo diesel to help American farmers & truckers," Grassley posted on X, adding that American farmers "who feed & fuel the world" deserve the strongest footing possible. Trump himself seemed to lean toward action Tuesday after his U.N. speech, telling reporters a decision would come "fast, one way or the other." "I've said let's not send out the diesel. We make a lot of diesel," Trump said, while conceding that cutting exports could mean refineries make less.

Here is where I land. Landry is right to be furious that American drivers are effectively subsidizing European diesel while paying record prices themselves, and he deserves credit for forcing this argument into the open rather than letting Washington sit on its hands. But Faucheux and the AFPM are making an engineering point: pipeline capacity is a physical constraint, and you cannot wish it away with an executive order. A short-term export freeze that ends up shrinking gasoline supply too would be a rough trade for the very truckers and farmers Landry says he is trying to help.

The governor's other ask, a permanent small-refinery exemption from federal renewable fuel standards, deserves less controversy. Small refiners processing under 75,000 barrels a day got that exemption automatically from 2007 until 2011, and three Louisiana refineries were among the 34 nationwide that had to reapply and win it again in 2025. Making that permanent is a modest, sensible fix that does not carry the pipeline risk the export ban does. The EPA has already moved on the smaller lever, letting refiners switch early to winter-blend gasoline as of Sept. 1 to squeeze out more supply. Whether Trump goes further on diesel exports, and whether Louisiana's own oil industry keeps pushing back if he does, is the fight to watch over the next 90 days.