The White House is struggling to respond to rising gas prices as the holiday season begins and people face surging costs for gas, groceries, and goods.
President Joe Biden is limited in his short-term ability to wrestle down prices, but that hasn’t stopped him from trying. Biden and his administration have twice alleged possible price collusion by oil-and-gas firms, calling for a federal investigation in a threat to domestic companies.
Biden has also laid blame at the feet of OPEC, repeatedly urging Saudi Arabia, the group’s de facto leader, to increase oil production.
Meanwhile, Democrats, who suffered disappointing results in recent Virginia and New Jersey elections, are staring down increasingly chilly polls.
The response from Biden has been to continue rattling sabers.
In a letter on Wednesday, Biden called on the Federal Trade Commission to “immediately” investigate whether oil and gas companies were illegally keeping prices high, citing “mounting evidence of anti-consumer behavior.”
It’s not the first time that Biden officials have made this request. National Economic Council Director Brian Deese sent a similar letter to FTC Chairwoman Lina Khan in August.
And while Biden and top administration officials have called on major oil-producing countries to boost output, their pleas have so far fallen flat.
OPEC, Biden officials have charged, has placed in jeopardy the “global recovery for countries around the world.” When the cartel declined to boost output by more than it had planned, the White House issued a threat to “consider the full range of tools” at the administration’s disposal.
Democrats broadly lack the knowledge to respond to the crisis, an energy analyst told the Washington Examiner.
“Part of the problem Democrats have is they just don’t really know anybody in the industry because it’s so overwhelmingly a Republican industry. And regionally, it’s Republican regions,” the analyst said. “And so most of the people doing energy and climate in this administration, there are not many people like that in this administration.”
Former President Donald Trump helped broker an OPEC truce between cartel members Saudi Arabia and Russia to save U.S. oil jobs.
Biden has had no such luck, with some reports suggesting that OPEC and Saudi Arabia’s reluctance to bow to U.S. pressure stems from the president’s refusal to accommodate a closer relationship with Saudi Crown Prince Mohammed bin Salman.
Oil consultant Greg Priddy said he thought this political angle had been “overblown,” however.
OPEC members are enjoying higher prices for now, but forecasts suggest this could soon change. “What’s driving them right now to resist increasing production faster is that they see a lot of production coming on,” said Priddy, including U.S. shale production, with output at the Permian Basin likely to hit a record level next month.
A report Tuesday by the International Energy Agency said oil supplies were rising to meet demand. The oil market is still “tight by all measures, but a reprieve from the price rally could be on the horizon,” the agency said.
Forecasts from the U.S. government and OPEC also point this way, with the cartel stating that it sees an oil surplus from next month. OPEC+ will next meet on Dec. 2.
Still, the Biden administration faces pressure to act, including top Democrats calling on him to tap emergency oil supplies to help slow rising prices.
“We need immediate relief at the gas pump, and the place to look is the Strategic Petroleum Reserve,” Majority Leader Chuck Schumer said during a news conference over the weekend.
Secretary of Energy Jennifer Granholm hinted at possible action, with some expecting Biden to open the SPR to add supply to the market. Democrats have also asked Biden to consider an export ban to stop domestic producers from shipping product overseas.
“There’s a political anxiety in the administration about prices going well over $3 a gallon,” Priddy said. Crude prices have dropped from the highs of recent weeks due in part to a stronger U.S. dollar, which can pull down oil prices.
Biden and Democrats’ maneuvers target a domestic audience and are nothing new, Priddy said. “Presidents of both parties have done this for political purposes.”
White House deputy press secretary Chris Meagher would not say during a press gaggle whether the White House believed the commission now had enough to act on. He rattled through the letter’s allegations but ignored part of a question about whether the motivation was largely political.
“They’re not well informed on this,” the analyst said. “They don’t have industry people working for them.”
Granholm drew attention earlier this month after she laughed at the suggestion that the United States should increase its energy output.
Biden could pay dearly for this. Presidential approval ratings correlate negatively to rising gas and food prices, both issues plaguing the current administration. In October, the cost of goods for U.S. consumers jumped 6.2% compared to one year earlier, the most significant monthly rise in more than 30 years.
“Every single presidential administration has, at some point, had political concerns about oil prices,” the analyst said. “[Former President Bill] Clinton tapped the SPR before the 2000 election. … There were later times that [former president George W.] Bush made swaps.”
He added, “Both parties have manipulated markets for political ends.”
In response to Biden’s latest charges, the American Petroleum Institute said that the demand for gas had increased as the economy picked back up. Biden’s letter is a “distraction from the fundamental market shift that is taking place,” Frank Macchiarola, the group’s senior vice president of policy, economics, and regulatory affairs, said in a statement.
“Rather than launching investigations on markets that are regulated and closely monitored on a daily basis or pleading with OPEC to increase supply, we should be encouraging the safe and responsible development of American-made oil and natural gas,” he added.
Original Location: Biden rattles saber at energy producers and OPEC while eyeing holiday season
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