GOP attacks on Biden for high gas prices don't add up, expert says

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Since President Biden announced on Tuesday that the U.S. would ban imports of Russian oil as punishment for its invasion of Ukraine, several Republican politicians have attempted to blame him for rising gas prices.

As the cost of a gallon of gasoline hit $4.30 on Wednesday, a familiar Republican refrain was heard — that Biden's decisions to cancel the Keystone XL pipeline and curtail drilling on federal lands in an effort to fight climate change were responsible for the record high prices at the pump.

On Wednesday, House Minority Leader Kevin McCarthy delivered a speech in which he asserted that Russia's invasion of Ukraine was not the reason for high gas prices — Biden's energy policies were. To back up his claim, McCarthy asserted that gas prices "started rising the day President Biden took office."

Yahoo News reached out to Christopher Knittel, a professor of applied economics at the MIT Sloan School of Management, to help explain whether the Republican criticisms of Biden hold water.

"The first thing is, that’s factually inaccurate," Knittel said. "Gas prices actually started rising in November of the previous year. That’s just data, so you can graph gas prices and you’ll see them starting to trend up in November of 2020."

Knittel noted that there "is no evidence" Biden's inauguration "broke the trend in gas prices," and pointed back to the early days of the pandemic, when the price of oil dropped precipitously as the world went into lockdown to try to slow the spread of the coronavirus.

“What everybody seems to be forgetting, and it’s shocking that they are, is in April of 2020 the futures price of oil was negative. It had never happened in the history of oil markets. We had a negative price," Knittel said. "People were paying others to take their oil. That is a huge disincentive to drill for more oil. The low prices, generally, that happened during the pandemic and up until the end of 2020 created a huge disincentive to drill oil. Despite that, we’ve seen U.S. production increase over the past year. Why hasn’t it increased more? Because oil companies are leery of drilling for more oil — certainly they were during the pandemic — and that’s a market effect. It has nothing to do with President Biden.”

Like McCarthy, other Republican lawmakers have sought to blame high gas prices on Biden's decision to kill the Keystone XL pipeline. While numerous fact checkers have pointed out that the pipeline was only 8 percent finished when Biden revoked the permits for the project, Knittel said U.S. politicians routinely overstate the impact its completion would have had on oil prices.

“It would have taken years to build Keystone XL, the portion of the pipeline that goes into Canada. Even if we could magically build it in a decade and Canadian oil would have been flowing through that pipeline, it’s not clear how much more Canadian oil would have been produced because of the pipeline. That’s the actual number that matters — not how much the pipeline can carry, but how much additional oil is processed in Canada because of the existence of the pipeline," Knittel said. "The reason why those two numbers aren’t the same is because a lot of that oil is already getting out of Canada, either through other pipelines or through rail. When politicians quote the capacity of that pipeline and assume that is the increase in Canadian oil because of the pipeline, that’s just not factually accurate.”

President Biden holds a virtual meeting with business leaders and state governors from the White House on Wednesday
President Biden holds a virtual meeting with business leaders and state governors from the White House on Wednesday. (Jonathan Ernst/Reuters) (Jonathan Ernst / reuters)

Data also shows that, on average, Biden has approved more drilling permits per month on public lands than Donald Trump did during his presidency. In fact, as Yahoo News reported Wednesday, the oil and gas industry is sitting on 9,173 approved but unused drilling permits on federal and tribal lands.

In an interview with Fox Business on Tuesday, former Vice President Mike Pence looked to contrast Biden's energy policies with those of the Trump administration, which he depicted as having achieved "energy independence."

“In the four years of the Trump-Pence administration, we achieved energy independence for the first time in 70 years. We were a net exporter of energy," Pence said. "But from very early on, with killing the Keystone pipeline, taking federal lands off the list for exploration, sidelining leases for oil and natural gas — once again, before Ukraine ever happened, we saw rising gasoline prices.”  

Knittel said he bristles whenever politicians lightly toss around the notion of energy independence.

“There are different definitions of ‘energy independence’ that people can use. One definition is that you consume the same number of BTUs, or unit of energy, that you produce, regardless of whether you consume it in oil and produce it in gas. So that’s a terrible definition," Knittel said. "You might be consuming oil but producing BTUs in natural gas. You’re not really independent, because you still need somebody else’s resources. Another definition is that for every energy product, you produce as much as you consume. So you produce as much oil as you consume oil, and so on. We were there, and we’re pretty close to being there now."

Moreover, Knittel said, energy independence doesn't mean that gas prices wouldn't be just as high given global turbulence from events like the war in Ukraine.

"It’s a global oil market; even though you produce as much oil as you consume, you’re still beholden to oil price shock," Knittel said. "We would still be facing $120 [a barrel] oil even if we produced as much oil as we consumed right now. Consumers would still face higher prices and still be hit in the pocketbook over what’s going on in Ukraine, and I think the average consumer would not call that energy independence. I wish policymakers were more clear with the definition that they’re using and whether they think it’s the right one.”