A major American energy lobby has taken aim at a presidential Twitter post that called on gas stations to cut prices at the pump, with the U.S. Oil and Gas Association telling President Joe Biden that they’re “working on it” and that the author of the post should go back to school to learn basic economic fundamentals.
What appeared to be a sarcastic reaction by the energy group was prompted by a fiery July 2 post from Biden, who called on gas stations across the country to charge customers less.
Besides the U.S. Oil and Gas Association posting a critical response to Biden’s message for gas station owners, Amazon founder Jeff Bezos’s reaction also suggested a need for some more schooling.
‘Bring Down the Price’
Political pressure has been mounting on Biden as soaring prices at the pump have left American drivers frustrated, while consumers more broadly face a cost-of-living crisis amid the highest inflation in 40-plus years.The price of gasoline is around double what it was when Biden took office, with the president variously blaming oil industry greed, a lack of refining capacity, global supply shortfalls set against a sharp post-pandemic rebound in demand, and the war in Ukraine.
Besides leaning on OPEC to pump more oil and releasing crude reserves from the national strategic stockpile, Biden has called on refiners to boost output and has increasingly ramped up rhetoric against gas station owners, demanding they drop prices.
Biden recently issued a call to gas station owners to “bring down the price you are charging at the pump to reflect the cost you are paying for the product.”
‘Killing Both Oil and Refinery Expansion’
But some experts say that for the oil industry to make the kind of major investments required to expand capacity is difficult under a hostile political environment.“Biden accused gas stations of over-charging, but their prices reflect the price of gasoline set by the market, and the market reflects the lack of supply which was created by Biden killing both oil & refinery expansion,” Shellenberger argued.
Expanding Capacity?
Shellenberger also argued that it’s possible for Biden to boost near-term crude production and refining “significantly” in three ways: Accelerate the permitting process for oil and gas projects by invoking the National Defense Act for Oil and Gas; commit to refilling the strategic petroleum reserve at a minimum of $80 per barrel, which Shellenberger said would “be a powerful incentive for the oil guys;” and announce LNG supply contracts with international partners, which he said would incentivize natural gas production.The notion that the Biden administration’s anti-fossil fuel posture and policies have fanned the flames of high prices at the pump has been echoed by a number of energy experts.
“Nobody’s willing to invest in expanding refinery capacity because the outlook from everything that the government has said is you won’t get the approvals,” he added.
“We’ve seen refineries closed. We’ve seen units come down. We’ve seen refineries being repurposed to become bio refineries. And we live in a world where the policy, the stated policy of the U.S. government, is to reduce demand for the products that refiners produce,” Wirth said.
But the Interior Department’s proposed plan, which has been opened for public comment, also features a zero-new-leases option while removing from consideration any new leases in federal waters off the Atlantic and Pacific coasts.
This stands in stark contrast to the policies of former President Donald Trump, who sought to expand domestic fossil fuel production to keep pump prices low and as a matter of national security.