President Biden wants an investigation into “illegal activity” that may be causing a spike in gasoline prices. Biden’s National Economic Council has asked the Federal Trade Commission to use “every available tool” to monitor the U.S. gasoline market and look for any “illegal activity” that might be causing gasoline prices to spike. Biden is urging the investigation despite his efforts to hamstring U.S. oil producers with policies that hampered domestic oil and gasoline production and even after he asked OPEC+ to increase oil production. The average gas price in January when President Trump’s oil policies were still in place was $2.326, almost a dollar less than what the average gas price was last month. According to AAA, the average price of gasoline is at a seven-year high, $3.186 per gallon on August 12, and is expected to remain above $3 for the rest of summer.
On August 11, Biden’s National Security Adviser Jake Sullivan urged oil-producing countries that make up OPEC to increase production, citing the need for reliable and stable global energy markets due to the coronavirus pandemic. OPEC+ agreed in July to production increases of 400,000 barrels per day on a monthly basis beginning in August and continuing into 2022. But Sullivan says that amount will not fully offset production cuts imposed during the pandemic until well into 2022. Sullivan notably did not mention all the harmful policies that the Biden administration has inflicted on U.S. oil and gas producers. They include:
- killing the Keystone XL pipeline approved by President Trump to transport oil from Canada and the Bakken Shale to Gulf Coast refiners;
- canceling oil leasing in Alaska and suspending legal leases in the Arctic National Wildlife Refuge;
- suspending oil leases on federal land, even after a court ruled the moratorium illegal;
- increasing fuel-mileage standards for cars, which favors electric vehicles; and
- invoking the Endangered Species Act as part of a strategy to reduce drilling on private land in the West.
Biden also discouraged U.S. oil and gas production by rejoining the Paris climate accords, vowed to make “the most aggressive” carbon cut the United States can make, and is seeking to target energy companies by ending fossil-fuel tax deductions akin to those in other industries, causing oil and gas investment to go elsewhere.
Before the pandemic, the United States had become the world’s largest oil producer and had become energy independent under President Trump’s administration. The United States reduced the strategic leverage of foreign producers such as Russia’s Vladimir Putin. But, Biden’s oil policies have now made Russia the second largest importer to the United States, taking over the spot held previously by Mexico after it previously leapfrogged Saudi Arabia. Russia is now selling the United States 840,000 barrels of oil per day, which is the amount of Canadian oil that Keystone XL would deliver to the United States. At the same time, the Biden administration has lifted sanctions on Russia’s Nord Stream 2 pipeline to Western Europe, avoiding the pipeline that crosses the Ukraine. That allows Germany to buy Russian natural gas, rather than U.S. LNG, while increasing Russian energy hegemony over NATO countries while putting Ukraine in peril for Putin’s designs.
According to Alberta’s Premier, Jason Kenney, the Biden administration is also committed to ending the embargo on Iranian oil exports. Biden is blocking energy imports from friendly Canada, while pressing for more imports from OPEC dictatorships & Putin’s Russian regime. Canada is the U.S.’s closest ally and largest trading partner. OPEC+ includes regimes that fuel conflict and instability around the world. Canadian energy producers are transparent publicly traded companies. OPEC+ producers are overwhelmingly state enterprises, many financing corrupt regimes.
U.S. Oil Production
U.S. oil production increased to almost 13 million barrels a day under the Trump administration and was just 11.2 million barrels a day in June. Because of Biden’s policies, the Energy Information Administration does not expect oil production to recover this year or next, expecting just 11.8 million barrels per day in 2022. Under Biden policies, the United States not only has less oil production but also less refining capacity and is more dependent on oil and petroleum product imports from other countries. U.S. oil exports have declined in recent weeks, while oil imports have increased, which will add to the U.S. trade deficit that was brought down in large measure by U.S. energy exports.
According to the Minister of Energy in Alberta, Canada, “the Biden administration pleading with OPEC to increase oil production to rescue the United States from high fuel prices months after canceling the Keystone XL pipeline smacks of hypocrisy. Keystone XL would have provided Americans with a stable source of energy from a trusted ally and friend that adheres to the highest ESG (environmental, social, and governance) standards in the world with industry commitments to net-zero production.”
What oil Keystone XL would have supplied, the United States is now importing form Russia, but that amount is insufficient according to the Biden administration to keep gasoline prices from rising. So, the Biden administration is asking OPEC+ for more production. President Biden needs to tell the American public why oil produced by foreign dictators in Russia, Iran or Saudi Arabia is more desirable than oil drilled by American producers, which his policies are causing to stagnate.