Why won’t that uncaring Joe Biden just snap his fingers and lower gas prices?
Hint: It has something to do with the realities of a market economy
“In less than a year, Joe Biden has crippled our domestic energy production,” Adam Laxalt, a Republican candidate for a Nevada U.S. Senate seat tweeted last week.
“We’re feeling the effects of Democrat (sic) leadership right now every time we go to the gas pump,” reads a recent fundraising missive from the Nevada Republican Party.
“Democrats’ reckless spending has made everything cost more,” including gas up 61% higher than the same time last year, says an attack ad from the National Republican Congressional Committee against multiple Democratic members of Congress, including Nevada Rep. Dina Titus.
[Editor’s note: North Carolina Republicans have made similar claims. For example, Rep. Ted Budd has tweeted that rising gas prices are the result of “Biden administration kill[ing] U.S. pipelines” and Sen. Thom Tillis has tweeted that recent increases in prices are the result of “Democrats’ radical tax and spending spree.”]
One nice thing about Republicans unloading on Biden and Democrats for higher gas prices is it’s a welcome break from the GOP’s busy schedule of pretending to freak out at the idea that a teacher might mention race in a history class.
And as far as deceptions and the Republicans who love them, blaming higher gas prices on Biden and his policies is not near as dangerous as the Big Lie.
But blaming Democrats for high gas prices is still a crock. And Laxalt, the state party, and every other Republican politician around the country knows it. Or should.
As is obvious to anyone and everyone whose examination has extended beyond complaining about it, the price of gas is not controlled by the president of the United States.
Ah, but those darned Biden policies have, as Laxalt put it, “crippled” energy production in the U.S.
Except they haven’t.
During the first year of the pandemic, demand for oil plummeted, and inventories soared. Of course when demand tanked the price followed. A barrel of oil was trading for about $46 in January 2020. The price had dived to less than $12 three months later.
On one day, April 20, 2020, the price of a barrel of oil was trading for less than zero dollars — traders actually had to pay buyers to get them to take oil contracts off their hands.
Say what you will about oil industry executives (another time, another column), they simply are not the sort of people who are going to spend money to produce a mineral unless they can sell it at a profit.
So production was curtailed — or “crippled,” as Laxalt would say — by the industry itself. As of last month domestic crude production was still about 10% lower than the pre-pandemic average in 2019.
“This year, demand for petroleum, both in the United States and globally, has largely returned to the pre-pandemic levels in 2019,” reads a recent U.S. Energy Information Agency report. “Demand has grown faster than supply, reducing inventories and contributing to higher prices for crude oil and petroleum products.”
That, not socialism, is why gas prices went up.
But let’s humor the Republican critics by examining the two main Biden policies they contend have led to higher prices at the pump.
The first is Biden’s inauguration day decision to cancel the permit for the Keystone XL Pipeline. After all, if Biden hadn’t done that, hundreds of thousands of barrels of oil would be coming into the U.S., right?
In 2023, at the earliest.
Whatever the qualities of Keystone XL Pipeline, transcending the space-time continuum was never advertised as one of them. Even if Biden hadn’t beaten Trump, the KXL pipeline currently would be making no contribution whatsoever to U.S. oil supply, and the unfinished project would have nothing whatsoever to do with the price of gas one way or the other.
The other big Biden energy policy sin, according to the GOP, is an executive order issued shortly after taking office to pause new oil and gas leasing on public lands.
The order only applies to new leases, and does nothing to prohibit or even limit drilling on 14 million acres of public land that, according to the Bureau of Land Management, is currently available for development.
Or as one oil executive assured shareholders after Biden issued the executive order, “We have a deep inventory of approved federal drilling permits in hand that essentially cover all of our desired activity over the next presidential term.”
But even as the price of a barrel of oil has been flirting with levels not seen for more than seven years, the industry hasn’t been rushing to increase production.
So why haven’t companies been drill baby drilling?
“It’s not the government that is banning them from drilling more. It’s pressure from their shareholders,” an oil industry stock analyst told CNN earlier this month.
Powerful investors don’t want oil companies to spend money on oil production, especially as many, maybe most, analysts think recent high oil prices are an anomaly. Powerful investors want oil companies to spend money on dividends and stock buybacks.
After topping $85 a barrel early in November, the price of oil Monday was a little less than $70. Part of that drop is attributed to uncertainty and unease accompanying the new coronavirus variant. But the price already appeared to be dropping more or less steadily even before omicron became a word that normal people used in conversation. Maybe gas prices are settling down.
On the one hand, that’d be great.
But on the other hand, if deprived of the opportunity to pretend high gas prices are Biden’s fault, Republicans will probably just resume full-time hyperventilating over whatever it is they want the phrase “critical race theory” to mean. Nothing’s ever perfect.
Hugh Jackson is the Editor of the Nevada Current which first published this commentary.
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