Last week, President Joe Biden participated in a nationally televised townhall on CNN where rising gasoline prices was a key point of discussion.
When asked by host Anderson Cooper if he has a timeline for gas prices, including when they might come down, President Biden stated that he didn’t have any solutions to ease the pain of prices at the pump:
“My guess is you’ll start to see gas prices come down as we get by going into the winter — I mean, excuse me, into next year, 2022. I don’t see anything that’s going to happen in the meantime that’s going to significantly reduce gas prices.
“… I must tell you; I don’t have a near-term answer.
“… But it’s going to be hard. It’s going to be hard. (emphasis added)
“At a moment when gasoline prices are usually heading down, the reverse is happening. Prices are soaring amid a spike in the price of oil, which is refined into gas for cars.”
For the first time in a long time, all US state have an average retail gasoline price above $3 per gallon (even Oklahoma and Mississippi which traditionally enjoy the lowest average prices). California’s average is now above $4.5 per gallon (according to @AAAnews data) #OOTT pic.twitter.com/2UuTe2JFtq
— Javier Blas (@JavierBlas) October 24, 2021
Undermining Domestic Energy Security
The president’s response that there is no “near-term answer” to help lower gas prices ignores key policy decisions taken by his administration in 2021 that have undermined North American energy security and a reliable supply of affordable energy.
This campaign against traditional energy is having a major impact on American producers – and by extension, American consumers – as USA Today reports:
“But U.S. producers haven’t increased production quickly because they fear that investments in fossil fuels could prove to be a poor use of their resources, [GasBuddy’s Patrick] De Haan said.
“‘The (Biden) administration has made it plain and simple that they are going to be pushing a very, very accelerated time schedule to get off fossil fuels,’ he said.”
Just one week into office, the Biden administration issued a moratorium on oil and natural gas leasing on federal lands and waters – a policy that a federal judge later ruled as an illegal ban.
The Bureau of Land Management, which oversees the federal leasing program – says:
“Oil and gas produced from the Federal and Tribal mineral estate are significant parts of the nation’s energy mix.”
In fiscal year 2018, around 8 percent of the nation’s oil came from federal lands, according to BLM, while the Energy Information Administration reported that:
“In 2020, about 14.6 percent of U.S. crude oil was produced from wells located offshore in the federally administered waters of the Gulf of Mexico.”
That’s nearly a quarter of American oil production that’s could be taken offline – a sizeable chunk that’s putting upward pressure on gasoline prices with uncertainty remaining as the Department of Interior won’t be holding an onshore sale at all this calendar year.
The federal leasing ban came right after the decision to cancel the Keystone XL pipeline that would have brought crude oil from Canada down to refineries on the Gulf Coast where it would have been turned into gasoline and other critical products.
Energy Secretary Jennifer Granholm recently said that “all tools [are] on the table,” but the administration’s actions suggest otherwise.
Now Begging OPEC+
Instead of finding answers rising gas prices here at home, the administration has resorted to begging OPEC+ to increase their own supply for the United States to import. During the town hall the president insisted that efforts to lower prices will depend on Saudi Arabia, and over the summer, National Security Adviser Jake Sullivan said:
“Higher gasoline costs, if left unchecked, risk harming the ongoing global recovery. The price of crude oil has been higher than it was at the end of 2019, before the onset of the pandemic.
“While OPEC+ recently agreed to production increases, these increases will not fully offset previous production cuts that OPEC+ imposed during the pandemic until well into 2022. At a critical moment in the global recovery, this is simply not enough.”
Sec. Granholm also blamed OPEC+ but didn’t fully appreciate that anti-energy policies in the United States are restricting supply:
“Indeed, Granholm pointed the finger again at the OPEC+ group of oil-producing nations that ignored calls this week from the U.S. to increase output beyond what it already has planned. ‘Everybody was hoping that there would be additional supply made available so that prices would not be jacked up,’ Granholm said.” (emphasis added)
While restoring market stability and lowering prices is a complex process, one thing is clear: Restricting U.S. oil and gas development is not the way to achieve the goals.
This post appeared first on Energy In Depth.