Is Biden to blame for rising gas prices?

Prices at the gas pump are significantly higher than last November — threatening to hit $3 a gallon by summer — triggering debate over whether Joe Biden, less than two months into his presidency, bears the blame.

Since the inauguration, Republicans and right-leaning commentators have wasted few opportunities to link the price increases to Biden’s policies and predict that the worse is yet to come.

“Since President Biden took office, average gas prices are up more than 50 cents a gallon,” Florida Sen. Rick Scott noted in a written statement this week criticizing the $1.9 trillion COVID-19 stimulus package approved by Democrats in Congress.

Asked by email if Gov. Scott would explain how Biden caused gas prices to rise, Scott’s press secretary, McKinley Lewis, responded, “Gas prices have gone up since President Biden took office. That’s a fact. You should ask the White House why they haven’t done more to keep gas prices low for American families.”

Yet, organizations that issue weekly gas price reports and analyses, including the U.S. Energy Information Administration, say gasoline price hikes are a result of rising demand and stagnant supply.

It’s happened many times before. Under President Donald Trump, national average prices for unleaded regular hit peaks of $2.94 in June 2018, $2.88 in October 2018, and $2.89 in April 2019. And many motorists remember when prices topped $4 a gallon in summer 2008, just before the Wall Street meltdown ushered in the Great Recession.

Market forces pushing prices up now, analysts say, include the Texas deep freeze last month that shut down many refineries and temporarily reduced gasoline production. Analysts also point to:

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Most of all, optimism among futures traders that COVID-19 vaccines will boost consumer confidence and lead to a summer surge in driving.","type":"text

Under the same circumstances, prices would be rising no matter who was president, says Patrick De Haan, head of petroleum analysis for GasBuddy.com. Conversely, “if we didn’t have vaccines, oil prices wouldn’t have gone up,” he said.

Under the same circumstances, prices would be rising no matter who was president, says Patrick De Haan, head of petroleum analysis for GasBuddy.com. Conversely, “if we didn’t have vaccines, oil prices wouldn’t have gone up,” he said.

Although gasoline demand is climbing, Americans are still consuming 9% less now than before the pandemic while U.S. daily oil production remains 20% below the 13.3-million barrel pre-pandemic peak, De Haan says, citing statistics from the U.S. Energy Information Administration.

Only 544 drilling rigs are currently in operation in the United States and Canada compared to 996 a year ago, De Haan pointed out. North American oil producers, still shaken by the unprecedented 60% drop in gasoline demand over two weeks last spring, are being cautious about restarting idled drilling rigs, which is allowing renewed demand to outstrip supply and keeping prices high.

Gasoline prices are rising “because the economy is coming back strong after the lockdown,” De Haan said in an interview. “It’s economic fundamentals, not politics.”

Biden’s clean energy orders

But some Republicans point to executive orders that Biden issued during his first days in office as part of his goal, outlined during his campaign, to combat climate change by eliminating carbon emissions by 2050. They say that while those executive orders might not be immediately affecting oil and gas supplies, Biden’s policies as a whole could be influencing producers and traders to anticipate rising prices and take actions now that reinforce those expectations and keep prices climbing.

One of Biden’s orders, issued on Inauguration Day, halted construction of the 1,200-mile Keystone XL pipeline between Alberta, Canada, and Steele City, Nebraska. When complete, the pipeline was projected to move 830,000 barrels a day from the Canadian oil sands to refineries along the Gulf Coast of the United States.

Another order barred new sales of oil and gas drilling leases on federally owned land, primarily in the western U.S.

Biden also ordered the United States to rejoin the Paris Climate Agreement, reversing predecessor Donald Trump’s withdrawal from the treaty, which was intended to reduce global greenhouse gas emissions and stop CO2 gases from affecting global weather by midcentury.

‘Hostile’ president

Republicans portrayed the actions as assaults on the nation’s lucrative oil and coal industries that will eliminate thousands of jobs. The Keystone decision, according to contractor TC Energy, immediately killed more than 1,000 jobs and scuttled plans by contractors to hire thousands more.

On the Fox Business channel, former Shell Oil president John Hofmeister recently called Biden’s administration “hostile” toward the oil and gas industry and said that the president’s clean energy policies will drive up gas prices in the future.

He warned that a ban on new drilling and fracking leases on federal lands would “create a psychology in the industry of ‘there’s going to be less available’ and the psychology drives the pricing as well.”

Writing on The Hill website on March 5, Liz Peek, a business analyst and frequent Fox News contributor, said one way Biden failed to stem current price increases was by releasing an intelligence assessment concluding that Crown Prince Mohammed bin Salman was responsible for orchestrating the murder of journalist Jamal Khashoggi. The assessment insulted the regime and likely prompted Saudi Arabia’s decision not to increase oil output, Peek wrote.

She called Biden’s decision to cancel the Keystone Pipeline and pause leasing of federal lands for oil and gas development “his opening moves.” Biden’s appointment of progressives to important Cabinet posts and insertion of climate issues into every agency’s agenda “will doubtless drive U.S. oil and gas investment and production down over time. Consequently, prices will increase,” she wrote.

The Institute for Energy Research, a nonprofit organization founded by Charles Koch that’s seen by critics as a mouthpiece for the fossil fuel industry, published a blog post on March 9 stating that oil prices surged after a March 7 attack on a major Saudi oil port by Yemen’s Iran-aligned Houthi rebels.

The Houthi, the post stated, stepped up its attacks on Saudi Arabia after the Biden administration removed the group from a U.S. list of foreign terrorist organizations.

‘Getting what it wants’

The institute’s blog outlined numerous economic pressures driving prices up and concluded, “The Biden administration is getting what it wants — higher oil prices that will result in Americans being forced to transition to electric vehicles and get to a net zero [emissions] economy by 2050.” It added, “It does not appear to matter to the Biden administration that Americans will suffer and that low- income families will be affected the most.”

But the blog post, like other commentaries from the right, stopped short of directly blaming Biden for the current price increases. Instead it opened with the statement, “Supply and demand have been mostly responsible for the increases in oil and gas prices since the heart of the pandemic.”

Dan Kish, senior vice president of policy at the American Energy Alliance, an offshoot of the Institute for Energy Research Institute, said in an interview, “I have no idea” whether Biden is causing gas prices to rise.

But he added, “The fact is that the administration has made it clear he wants to get off of fossil fuels. One of the most effective ways to do that is to make it more difficult to produce so prices go up. Then people will shift to types of energy he supports. How much of that is kicking in now, eh, you can ask 10 different people and get 10 different answers.

“But if you anticipate that it’s going to be harder, effects of that psychology on business decisions begins to work its way into the system.”

De Haan says there will come a day in the not-too-distant future when oil and gas production return to peak levels and producers will be constrained by Biden’s policies from leasing new drilling sites and opening new pipelines. At that point, he said, it will be accurate to blame Biden for rising prices.

Before that happens, he says, the industry will have to return to pre-pandemic production levels by reviving idled drilling rigs and ramping production back up from the current 10.4 million barrels a day to 13.3 million barrels a day — all of which can be done without new drilling sites and without the Keystone Pipeline XL.

“There will be a time when it will be about politics,” he said. “That time is not now. It’s on the horizon.”