Last July President Joe Biden assured us price increases were “temporary.” The latest Consumer Price Index, however, shows a year-over-year increase of 8.5%. A much bigger number lurks in the report, however.
Even with the recent declines, gasoline prices are still up a whopping 44.0% over the year. Unfortunately, it comes as no surprise to Americans suffering at the pump.
Americans suddenly making sacrifices just to fill up a tank are looking for our domestic energy production to do more to help. They understand that outside factors, including Russian hostilities in Ukraine and refinery bottlenecks, continue to create upward pressure on oil prices, even if recessionary fears act in the opposite direction. What they do not get is why the Biden administration seems to take every opportunity to keep American oil and gas sidelined.
They remember 2011 when gasoline retail hit $4/gallon (crude oil prices had reached over $113/barrel). But they also remember something remarkable. We started reaping the benefits of American ingenuity. George Mitchell combined two old technologies, horizontal drilling and hydraulic fracturing, to solve the riddle of tapping America’s vast but previously trapped shale oil and gas resources.
Thanks to fracking, American production quickly proved an effective counter to OPEC and Russia. High cartel prices per barrel incentivized more U.S. production, causing oil and gasoline prices to plummet (bottoming out in 2016 at below $30/barrel and $2/gal.). By 2018, domestic production of crude oil was 85% higher than the U.S. Energy Information Administration had projected in 2011, the price per barrel was around $65, gasoline retail was around $2.81/gal., and the U.S. had become the world’s top producer of crude oil and natural gas.
Happily, for American families, the effect of the shale revolution was energy savings worth an estimated $2,500 for a family of four.
Nevertheless, after telling campaign audiences he would stop pipelines and fracking and that oil and gas executives should be put “in jail,” President Biden canceled Keystone XL pipeline permitting and the planned oil and gas leasing in Alaska on his very first day in office. He then ordered the suspension of new oil and gas permits on federal land and waterways and a review of existing permits.
The moratorium was eventually blocked by a federal judge, so the Biden administration chose to dig in its heels. This May, the Biden administration canceled more offshore oil and gas lease sales in Alaska and the Gulf of Mexico. In June, they delayed the announcement of a new federal plan for offshore oil and gas development leasing only to release a plan that limits federal leasing and allows for the option of no leasing at all.
President Biden seems to think the hardships Americans face from historically high energy prices can be solved by gimmicks: non emergency releases from the Strategic Petroleum Reserve, suspending the federal gasoline excise tax, or calling inflation “Putin’s price hike.” Meanwhile, he has demanded answers from oil companies for high gasoline prices and spoken of taking emergency executive actions.
The answer lies in what a different president explained on his first day in office. “It is no coincidence,” said President Ronald Reagan in his inaugural address, “that our present troubles parallel and are proportionate to the intervention and intrusion in our lives that result from unnecessary and excessive growth of government.” The petroleum and coal industries are by far the nation’s most heavily regulated.
So U.S. oil and gas executives responded to President Biden’s demand by offering practical ways to remove unnecessary and excessive government limitations. Among other things, ExxonMobil, American Fuel & Petrochemical Manufacturers and the American Petroleum Institute urged lowering regulatory costs, streamlining pipeline approvals and other infrastructure development, waiving provisions of the Jones Act, not playing favorites with energy technologies and clearly and consistently favoring domestic resource development.
This issue is too important for gimmicks and threats. Americans need the Biden administration to remove the regulatory constraints, support infrastructure and resource development and set aside ideological hostility so our domestic energy industry can again be a game-changer.
Jon Sanders is the director of the Center for Food, Power, and Life at the John Locke Foundation. James Carter is the director of the Center for American Prosperity at the America First Policy Institute.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
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