The Biden Diesel Hike
It’s not just gas prices hitting records, and everything you buy is costing significantly more to transport.
Every American is painfully aware of the high price of a gallon of gas. Well, unless you’re one of those intrepid souls saving the planet with the electric car Pete Buttigieg told you to buy. But an equally big economic problem is the price of diesel because it affects the price of everything (remaining) on store shelves.
First, about those gas prices. For nine days in a row now, the U.S. has set new nominal price records. (Adjusted for inflation, prices were higher a decade ago.) Today’s national average price is $4.567 a gallon, which is 16 cents higher than one week ago, $1.52 higher than one year ago, and $2.17 higher than when Donald Trump left office. For the first time ever, all 50 states now have average gas prices of more than $4 per gallon.
Congratulations on these incredible records, President Brandon.
But wait — there’s more.
One year ago, diesel was $3.17 a gallon, but today’s national average is a record $5.57. “Yeah, well, I’m glad I don’t drive a diesel,” you may be thinking. True, but truckers do, and that has implications for your budget. As Jim Geraghty astutely observes, “We are now reaching the point where the cost of diesel fuel is making some goods too expensive to transport.” He quotes one trucker who said: “If you’re getting paid $2 per mile you’re not taking that load no matter if it is baby formula or orange juice because the cost of diesel is $5 plus. You just can’t take that load.”
Indeed, the price of diesel could lead to disastrous shortages and supply chain wreckage worse than what we’ve already endured.
For his part, Joe Biden sounds like Jenny’s abusive boyfriend in “Forrest Gump” — “It’s just this war and that lyin’ son of a b*tch Putin!” But the president bears an awful lot of blame for the current situation, shutting down pipelines, revoking leases, and insisting that the resulting high prices are all the more justification for realizing his “green” energy utopian dreams. Or that the best way to “bring down inflation” is to “make sure the wealthiest corporations pay their fair share.”
To be sure, some of the problems extend further back than Biden’s presidency or beyond the reach of his own policies. For example, the cost of refining accounts for nearly a quarter of the cost of diesel, and refining has been a problem for a long time. Another example is that taxes are higher on diesel than on gas both federally and in many of the states (California’s diesel tax is nearly $1 per gallon).
But Biden’s party is responsible for those things.
The U.S. has seen six refineries close in the last couple of years, with the result being that, as Geraghty notes, “the U.S. started 2021 with its lowest annual refining capacity in six years.” He adds, “We’re getting back to pre-pandemic levels of demand, while our refineries are pumping out about a million fewer gallons of fuel per day than they did before the pandemic.” That accounts for a 5% reduction in capacity, and it’s likely to get even worse over the coming years. Higher demand and lower supply is a bad combination.
Geraghty expands on that problem:
We almost never build oil refineries in the U.S. anymore. According to the EIA, the newest refinery in the United States is the Targa Resources Corporation’s site in Channelview, Texas, which began operating in 2019 and processes 35,000 barrels per day. Before that, the newest refinery with significant downstream unit capacity was Marathon’s facility in Garyville, La. That facility came online in 1977.
Are there plans for new refineries? Nope.
Biden had been a senator for only four years in 1977. The problem isn’t all his, but his party’s environmental policies and draconian regulations are certainly to blame for this predicament. Oil companies chose not to take the risk of investing in such ventures as refineries because to do so ran afoul of Democrat politics.
“Nothing about the current environment is promoting investments in fossil fuels,” said Bloomberg Intelligence analyst Fernando Valle. “It’s a 15 to 20 year payback on most of these investments.”
Why do that when electric cars are the government-mandated future?
What Joe Biden has done to the fossil fuel industry is hitting every American at the gas pump and anywhere they buy anything that now costs substantially more to transport than it did before he took office. But hey, at least we don’t have a president who mean-tweets.
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