Democrats Feel the Heat on High Gas Prices

KEY TAKEAWAYS

• On May 10, average gas prices in the U.S. hit a record high, and they’ve been hitting new records ever since, reaching $4.59 per gallon on May 24 – up more than $2 per gallon since President Biden took office.
• The Energy Information Administration recently predicted the average household will spend an additional $450 on gasoline this year when compared to 2021.
• For months, Democrats have tried to deflect blame from their disastrous energy agenda. Now they are pitching a messaging bill that would prohibit businesses from selling fuel at a price that is “unconscionably excessive” during “energy emergencies.”

As summer approaches, and Americans prepare to hit the road for peak travel season, prices for gasoline are heating up. On May 10, average gas prices in the U.S. hit   a record high, and they’ve been hitting new records ever since. The average price for a gallon of regular gasoline topped $4.59 on May 24, according to AAA. Gas prices have climbed more than $2 per gallon since January 2021, and 40 cents since the beginning of this month.

Day after Day of Record Gas Prices

Democrats’ Messaging ploys

For months, the Democrats have tried to deflect blame away from their disastrous energy agenda. Earlier this spring, they began using Russia’s war in Ukraine as an excuse for prices that had been rising since President Biden took office. Now, they’ve pivoted to claims of “price gouging” and “corporate greed.” What started as a talking point of the radical left has been adopted by other Democrats in recent months. Consumers are anxious for relief, and Democrats are offering nothing more than messaging bills and left-wing talking points.

Democrats are pushing legislation that would prohibit businesses from selling fuel at a price that is “unconscionably excessive” during “energy emergencies.” The legislation empowers the unelected Federal Trade Commission to enforce its broad and vague provisions. The CEO of Chevron tried to explain global markets and supply and demand to House Democrats at a hearing last month: “We do not control the market price of crude oil or natural gas, nor of refined products like gasoline and diesel fuel, and we have no tolerance for price gouging.” The bill narrowly passed the House by a vote of 217-207 on May 19.

According to the American Fuel and Petrochemical Manufacturers, more than 90% of gas stations are independently owned and operated businesses that buy gasoline from refiners and marketers for resale to the public. About 60% of stations are owned by people who just have that one station. Although many retail outlets license the brands of major oil companies, those companies do not own or operate the gas stations. Oil companies have a much smaller presence in retail markets than they once did.

Oil Prices and Gas Prices are Linked

This isn’t the first time Democrats have blamed energy producers for high prices. Last November, as prices climbed during the holiday season, President Biden demanded the FTC look into oil companies for “illegal conduct.” In March, Commerce Committee ranking member Roger Wicker wrote to the FTC asking for any evidence the commission has found stemming from President Biden’s request. In a letter responding, FTC did not disclose any evidence of illegal activity occurring in the market, nor did it ask for Congress to provide additional authority to initiate enforcement actions against oil and gas companies.

Americans might also be asking what Democrats’ latest “solution” will do to address the cost of crude oil, which is the largest factor in the cost of gas. The answer, of course, is that it will do nothing. Gas prices and oil prices are correlated, as gas and diesel are refined products of crude oil.

At the peak of the COVID-19 pandemic, demand for oil and gas plunged as Americans stayed home and didn’t travel, and the industry was subsequently squeezed. This contributed to the closure of oil refineries, which has limited the industry’s ability to refine oil into gas now. The oil and gas industry has been hesitant to invest in restarting the refineries and produce more because businesses worry that Democrats’ climate policies will mean they will never earn back the money they would have to invest.

Democrats know their legislation won’t yield a meaningful reduction in prices. They’re not interested in taking action to support domestic oil and gas development, they are just scrambling to look like they’re doing something ahead of the summer travel season. Democrats also have proposed waiving federal excise taxes on gasoline, which some members of their own party have slammed as a “gimmick,” and they have debated a gas rebate to facilitate even more government spending. These ideas come after the left dumped nearly $2 trillion into the economy in 2021 and stoked inflation to a 40-year high. One House Democrat admitted the plans are nonsense: “It’s just unrealistic. I mean, we can’t afford to do all that sort of thing at this point in time. It’s pandering.” The president has offered no better ideas, suggesting that Americans could avoid high gas prices if they owned an electric vehicle. The average EV costs $65,111, far beyond the reach of most Americans.

The solution is to make it easier to produce

President Biden worked diligently to undermine domestic energy production his first year in office, and he has continued his efforts in 2022. In March, the president called on Congress to impose new fees on energy producers, though these higher business expenses would probably just be passed on to consumers at the pump. Then, in April, the administration announced it would increase royalty rates by 50% for onshore oil and gas leases and cut acreage available for leasing by 80%. In May, the administration canceled scheduled offshore lease sales in Alaska and the Gulf of Mexico. The Bureau of Ocean Energy Management’s current five-year offshore oil and gas leasing plan expires at the end of June, and the administration has yet to propose a new plan. The American Petroleum Institute predicts that delaying a plan could cut oil production in the Gulf of Mexico by 500,000 barrels per day over the next 20 years.

The president has said he would do “everything in his power to help American families” who are paying higher gas prices – everything, that is, except what might actually work. In reality, he and Democrats in Congress are working hard to keep prices rising. Just last week, Interior Secretary Deb Haaland spoke to the Energy and Natural Resources Committee and was unwilling to even say that gas prices are too high. Republicans have pushed back on the left’s anti-American energy agenda from the very beginning of the Biden administration. A group of Senate Republicans, led by ENR Committee ranking member John Barrasso, recently introduced legislation to require the Interior Department to restart and continue onshore and offshore lease sales and to complete a new five-year plan for offshore leases.

While Democrats are trying to avoid blame for their catastrophic energy policies, families are stuck with the high costs. Some analysts are projecting national average gas prices may soon top $5.00 per gallon, and the Energy Information Administration predicts that the average household will spend an additional $450 on gasoline this year compared to 2021. If Democrats are serious about addressing high gas prices, they should start supporting American energy production.