Gas prices reach record highs on March 8, 2022 at this station in Washington, D.C. (Photo by MANDEL NGAN/AFP via Getty Images)
(CNSNews.com) – In response to a shouted questions from reporters on Tuesday, President Biden said gas prices are « going to go up. »
Asked what he’s going to do about it, Biden claimed: « Can’t do much right now. Russia is responsible. »
But there is something he could do about it, if only he would take steps to encourage, rather than discourage, American oil production and refining.
Of course, rising gasoline prices are a longtime goal of leftist climate-change activists, to whom Biden is beholden. Rising gasoline prices are one way to reduce carbon emissions, by discouraging driving and other energy-consuming activities.
(Remember that President Obama told the San Francisco Chronicle in January 2008, « Under my (Clean Power) plan — electricity rates would necessarily skyrocket. »)
As stated in H. RES. 109 — « Recognizing the duty of the Federal Government to create a Green New Deal » — the transportation system must be overhauled « to remove pollution and greenhouse gas emissions from the transportation sector as much as is technologically feasible, including through investment in (i) zero-emission vehicle infrastructure and manufacturing; (ii) clean, affordable, and accessible public transit; and (iii) high-speed rail… »
Biden himself signed an executive order in December, setting five « ambitious » federal goals:
— 100 percent carbon-pollution-free electricity by 2030;
— 100 percent zero-emission vehicle acquisitions by 2035;
— Net-zero emissions from federal procurement no later than 2050;
— A net-zero emissions building portfolio by 2045; and
— Net-zero emissions from overall federal operations by 2050.
Supply and demand
The American Fuel & Petrochemical Manufacturers (AFPM), an industry trade group, issued a news release on Tuesday, explaining that the cost of crude oil, which is refined into gasoline, accounts for more than half of the price drivers see at the pump.
And as of this week, average U.S. gas price have soared above $4 a gallon nationwide, as demand continues to outstrip supply.
Biden is correct that Putin’s war in Ukraine is partly to blame. On Tuesday, Biden announced that the U.S. is banning Russian oil and gas imports to ensure that the U.S. is no longer subsidizing Putin’s war to take over a sovereign state.
According to AFPM, Russia is a major supplier of crude oil and other energy products globally, though less so in the United States. So the U.S. ban on Russian imports has tightened an already tight market.
But the United States could step up its own production of crude oil, which we have in abundance. As AFPM put it, « Any supply lost from the market must be replaced for prices to normalize. »
AFPM says the United States can work to stabilize the energy market by:
— Upping the volume of crude oil produced in financially and geopolitically stable, market-driven countries, including the United States;
— Domestic production rates can be slow to change if there is doubt about the long-term security of such investments because of political rhetoric and uncertainty around financing. Our government can do a lot to calm these concerns.
— Increasing economic access to crude by making necessary energy investments and policy reforms;
— It should be easier for U.S. refineries to access heavy, sour Canadian oil. Pipeline infrastructure is safe and would help. Right now, West Coast refineries find it vastly more affordable to import lighter crude oil from Asia than to have the same quality U.S. crude shipped in. Jones Act exemptions and other reforms could help.
— Shoring up U.S. refining capacity.
AFPM says the U.S. has « the most complex and economic refining industry in the world, but we are losing capacity while the rest of the world is building. We have less refining capacity today than we did just a few years ago. At the beginning of 2020, U.S. refineries were capable of processing 18.976 million barrels of crude oil every day (BPD). In 2022, our capacity is nearly 900,000 BPD less.
« We’ve permanently shuttered some facilities and are converting others away from gasoline and diesel production to smaller volumes of renewable fuels. With every barrel of refining capacity we’re losing, Asia is building — and then some.
« Policies like the Renewable Fuel Standard that make it more expensive to manufacture gasoline and diesel in the United States, and regulatory moves to phase out internal combustion engine vehicles are hampering the strength of America’s liquid fuel industries. »
AFPM says there is no « near-term, silver-bullet policy to blunt the impact of geopolitical disruptions of the market, » but « pursuing policies that allow domestic production to return to pre-pandemic levels will help to provide market stability and insulate not only the U.S. but the world from major disruptions. »
The trade group says policymakers can also « provide relief from policies that increase the cost of producing refined product and policies that make it uneconomic to transport crude oil and petroleum products domestically. »
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