For all his pretensions of fostering a clean-energy transition, U.S. President Joe Biden is spending an awful lot of time these days fretting about high gasoline prices.
The inverse relationship between gas prices and a U.S. president’s approval rating remains stubbornly immutable, even in 2021. And with the average price at the pump surging to a seven-year high of more than US$3.40 ($4.28), the White House has gone into panic mode. Mr. Biden is desperate to see some relief at the pumps before next year’s midterm elections.
Failing that, he must try to persuade U.S. voters that high gas prices are not his fault. This week, Mr. Biden wrote to the head of the U.S. Federal Trade Commission calling for an investigation into alleged price gouging amid what he insisted was “mounting evidence of anti-consumer behaviour by oil-and-gas companies.” Previous presidents have pulled the same stunt, without results, and there is little expectation that the FTC will play along this time.
This week’s letter came on the heels of Mr. Biden’s repeated calls for the Organization of Petroleum Exporting Countries and Russia to increase production as global oil demand snaps back to pre-pandemic levels. The political optics of a U.S. president conceding that OPEC has him over a barrel are anything but good. The last time it happened, when Jimmy Carter was in the White House, it did not end well. But Mr. Biden appears to be out of other options.
Eleven progressive Democratic senators, including Elizabeth Warren of Massachusetts and Sherrod Brown of Ohio, wrote this month to Mr. Biden to express their “support for your efforts to help families and businesses across the nation who are struggling to cope with soaring gasoline prices.” Yet, those same Democratic senators remain hostile to more domestic oil production or increased imports from Canada.
Mr. Biden himself revoked a permit for the Keystone XL pipeline on his first day in office and subsequently signed an executive order halting leases for drilling on federal lands. A federal court injunction stopped Mr. Biden from following through with the order and his administration this week began auctioning off new oil leases in the Gulf of Mexico. But White House Press Secretary Jen Psaki insisted the move was involuntary.
“We’re required to comply with the injunction; it’s a legal case and legal process,” Ms. Psaki said. “But it’s important for advocates and other people out there to understand that it’s not aligned with our view, the President’s policies or the executive order that he signed.”
The disconnect between Mr. Biden’s calls for lower gas prices and his stated goal of slashing U.S. greenhouse gas emissions to half their 2005 level by 2030 should not be lost on anyone. While his administration promises to step up incentives for zero emission vehicles and build more EV charging stations, such policies are mere window dressing in the face of an American economy that still runs on fossil fuels. Mr. Biden has taken only baby steps to change that. His administration has no plans to introduce a carbon tax or slap carbon levies on gas-guzzling light trucks, which accounted for more than 80 per cent of U.S. auto sales in October.
Americans might like the concept of net zero emissions, but, like voters almost everywhere, they have expressed little willingness to accept the lifestyle changes needed to get there. Mr. Biden appears to be in no hurry to force them to. His administration insists there is no contradiction between its desire to see short-term relief at the pumps and longer-term goal of ending U.S. dependence on fossil fuels. “If he were asking [OPEC] to boost their production over five years, I’d quit. But he’s not. He’s asking them to boost production in this immediate moment,” former Democratic senator John Kerry, Mr. Biden’s climate envoy, said on the sidelines of this month’s United Nations COP26 conference. “You can’t just shut down everybody’s economy across the planet and say, ‘Okay, we’re not going to use oil’ or whatever.”
Perhaps. But there are few signs Mr. Biden’s climate change policies will succeed in decoupling the U.S. economy from fossil fuels. U.S. oil consumption fell to 18.2 million barrels per day in 2020, in the depths of the pandemic. Demand has rebounded this year and is set to return to its 2019 level of 20.5 million barrels next year. U.S. production, which reached more than 13 million barrels a day in 2019, has hovered at around 11 million barrels this year, though shale producers in the southwest Permian Basin recently begun increasing output as prices rise.
The U.S. Energy Information Administration forecasts the United States will consume 22 million barrels of oil per day in 2050, or more than it does now. So, Mr. Biden may not be the last U.S. president to find himself at OPEC’s mercy.
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