The Patriot Post® · Evaluating the Rise in Gasoline Prices
By Mark W. Fowler
It is a fundamental principle of economics that when demand exceeds supply, prices go up. Presently, gas prices have increased dramatically. The Biden administration has attributed this to Putin’s war on Ukraine.
Let’s look into this situation. During the Trump administration, several developments led to the United States becoming a net exporter of petroleum. Production was encouraged. The reserves in ANWAR were opened and the administration encouraged production and exploration and production. The Keystone Pipeline and Dakota Access Pipeline were approved and under construction. It is sufficient to say that Trump was pro-energy and pro-America First. This is as it should be. All nations live in a state of nature in that they alone must do all they can to preserve their power, prestige, and resources within the boundaries of civilized behavior.
Other factors were also at play. Trump encouraged Saudi Arabia to boost production. COVID limited travel primarily as a result of mask mandates and business closures. Understandably, demand went down. Likewise, when demand goes down, prices go down. At the same time, supply went up due to the measures discussed above. And while presidents have little say over day-to-day gas prices, their attitude tends to influence the supply. When Trump left office, the average price of gasoline was $2.25 per gallon. When attitude leads to action, attitude is important.
To see that this is so, let us look back in history at the presidencies of Ronald Reagan and Barack Obama. After the shock of the oil crisis of 1973 and the mishandling of same under Jimmy Carter, Reagan lowered gasoline taxes and encouraged exploration. Prices stabilized, but less so than expected due to inflation. Fast-forward to the Obama presidency. Obama let it be known he was in favor of “fundamentally transforming America.” He opposed exploration and drilling in Alaska and off the Gulf shore. He opposed the Keystone Pipeline. He was in favor of the “greening” of the economy and the power grid and was opposed to the ongoing use of fossil fuel. He supported loans for such companies as Solyndra, which was given $500 million in federally guaranteed loans. One would think that the Obama administration would bring its best and brightest to assess the suitability and continued viability of Solyndra before bestowing on its managers significant sums of money. If it did, it missed the mark. Completely. Solyndra was bankrupt in less than one year. So much for the expertise of the government and the ease with which we can move to green energy.
Attitude makes a difference. When the president spends time bashing the oil industry, investors get nervous, and nervous investors don’t take unreasonable risks with their own money.
Let us turn now to various statements from Joe Biden during his campaign for the presidency and his actions since becoming elected. On December 20, 2019, during a town hall meeting in Peterborough, New Hampshire, Biden said that oil executes should be imprisoned for damage done to the environment but did not clarify what crime they had committed. Nevertheless, he doubled down by saying, “I’m not kidding.” He finished the sentence of a supporter who said, “If we continue to use fossil fuels…” to which Biden concluded, “We will die.” On the first day in office, he canceled the Keystone Pipeline. He has placed a temporary pause on new oil and gas leases. When Biden took office, gas was $2.25.
In May 2021, just before the peak of the summer driving season, average gasoline prices were $2.91. Consistent with virtually everything else it does, this administration has postured, prevaricated, and played games. It released two days’ worth of petroleum from the Strategic Petroleum Reserve. This accomplished nothing. It has tried to get the Saudis to increase production to no avail. It is reported the Saudis wouldn’t even pick up the phone. Now the administration is stooping even lower by seeking to cut a deal with Iran, which will use the money to fund terrorism and enhance its nuclear power. Iran is a bad actor. In the news today is a story that Iran has sent assassins to kill former UN Ambassador John Bolton. Biden is also seeking to make a deal with Venezuela, which is currently presided over by dictator Nicholas Maduro, who has continued the devastating policies of Hugo Chaves that left Venezuela a bankrupt train wreck. The United States doesn’t even recognize Maduro as the duly elected president.
The administration is not without a plan. Transportation Secretary Pete Buttigieg suggests we should get electric vehicles. This will spare us from the high cost of gasoline. At $60,000 a piece, he expects to see Teslas everywhere. The good secretary and those green acolytes of his forget that most electric power in this country comes not from wind or solar but from coal. Buttigieg is the same man who has a gas-powered government SUV drive him to within a few blocks of his office, where he then pulls out a bicycle to pedal to work. This is the kind of posturing the nation has become used to from green advocates. Separate from the cost of vehicles themselves is the matter of the drastic increase in power usage by putting millions of electric vehicles on the road — if that were possible. And in the short term, it isn’t. Electric vehicles also require special circuits be provided in homes to recharge those vehicles. That process will take years to complete and cost billions.
When one looks at the big picture, it is easy to conclude the surge in gasoline prices is intentional. Biden and the green advocates want Americans to hurt in order to expedite the demand for electric vehicles. It’s just a shame the country is being led to perdition by ideologues.