As gas prices continue to rise and Americans are forced to pay more at the pump amid other inflationary pressures, President Joe Biden has decided it’s time to act.
But rather than implement policies that would ensure a more adequate supply of gas, heating oil, natural gas, and other fossil fuels, which would go a long way toward lowering prices, Biden is taking a different strategy: He ordered the Federal Trade Commission to investigate whether oil companies were intentionally price-gouging consumers.
This, after years of far lower gas prices under former President Donald Trump, whose policies unlocked U.S. gas and oil production to such a level that prices fell to decades-long lows and America became a net fossil fuel exporter for the first time in 2019 since 1952.
“The Federal Trade Commission has authority to consider whether illegal conduct is costing families at the pump. I believe you should do so immediately,” Biden wrote in a letter to FTC Chairwoman Lina Khan, according to The Hill newspaper.
“Prices at the pump have continued to rise, even as refined fuel costs go down and industry profits go up,” Biden also noted.
“In the last month, the price of unfinished gasoline is down more than 5 percent while gas prices at the pump are up 3 percent in that same period. This unexplained large gap between the price of unfinished gasoline and the average price at the pump is well above the pre-pandemic average,” Biden added.
He went on to claim that the country’s two largest oil companies in the U.S. are on pace to double their net incomes over 2019 — when gas prices were about half as much or less than they are now.
“They have announced plans to engage in billions of dollars of stock buybacks and dividends this year or next,” he wrote.
“The bottom line is this: gasoline prices at the pump remain high, even though oil and gas companies’ costs are declining,” the president added.
The Hill reports:
Biden has caught flak from Republicans over gas prices, which are rising ahead of the holiday season, when Thanksgiving travel is expected to return to near pre-pandemic levels. Republicans have focused on the issue especially heading into next year’s midterm elections.
Still, many of the factors impacting gasoline prices — such as global oil production — are out of a president’s control. Currently, a group of oil-producing countries and their allies, known as OPEC+, are steadily increasing their oil production, though the U.S. has urged them to do so more rapidly.
In August, Biden urged OPEC+ to boost oil output as a way to combat rising gas prices and national security adviser Jake Sullivan at the time was critical of big drilling countries for their insufficient crude production during the global recovery from the COVID-19 pandemic.
No sooner than Biden took office, he shut down construction of the Keystone XL pipeline via executive order, after Trump green-lighted the project during his term. It had been delayed for more than a decade, and the Canadian company that launched the project spent billions to build sections of the line as well as litigate the project in court.
In addition, Biden has used his executive authority to cancel new oil and gas drilling projects on federal lands.
Collectively, his policies have been viewed as detrimental to the oil and gas industry, and have come at a time when there are supply chain bottlenecks, labor shortages, and other issues that have led to higher prices at the pump.
Notes Jonah Goldberg:
When gas prices are “too high,” many politicians blame oil companies for “gouging.” When prices are low, these same politicians insist that oil companies shouldn’t drill, build pipelines, or open new refineries. That one result is correlated to the other is irrelevant to the need to aim anger at someone.