Biden takes a victory lap on gas prices. Now what?
Haisten Willis
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After facing a summer of angst and outrage over gas prices that topped $5 a gallon on average, the Biden administration has celebrated a sustained easing of those prices.
According to AAA, gas prices are now $3.18 per gallon on average, lower than they were one year ago and down nearly $2 from the summer peak. Half of all gas stations are selling their product for under $3 a gallon.
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“That decline is saving Americans’ families with two cars about $170 a month,” White House press secretary Karine Jean-Pierre said Wednesday. “President Biden committed to addressing Putin’s tax hike at the pump, and he is doing just that.”
The White House followed that up with a Friday announcement that it was starting to replenish the Strategic Petroleum Reserve, which is down 200 million barrels from its summer 2020 peak of 650 million. Biden began tapping the SPR in November 2021, though the White House later blamed high gas prices on “Putin’s Price Hike” following the Russian invasion of Ukraine that began three months later.
Gas cost $2.31 per gallon on average the day Biden took office.
Though oil prices are no longer grabbing headlines, conservatives still say the administration’s policies are counterintuitive and that they empower foreign adversaries who produce oil.
“Team Biden doesn’t really care about high energy prices,” said Republican energy lobbyist and former Trump White House official Michael McKenna. “If they did, they would take meaningful actions to address the underinvestment in oil and gas, make federal lands available for exploration and production, and permit, rather than cancel, pipelines.”
Biden has endured a controversial and, at times, contradictory record on energy policy. He pulled the plug on the Keystone XL pipeline upon taking office and was sharply criticized for fist-bumping Saudi Crown Prince Mohammed bin Salman.
The president said immediately before the midterm elections he’d approved “no more drilling” for oil. But just three days prior, he said energy companies “should be drilling more than they’re doing now.”
“Biden just admitted his anti-American oil & gas agenda,” Rep. Steve Scalise (R-LA) tweeted following the “no more drilling” statement. “Not even his allies in the media & the phony fact-checkers will be able to cover for him on this now. It came straight out of his mouth.”
Biden has also talked of instituting a windfall profits tax on oil companies, accusing them of “war profiteering.”
Some of the political talk about oil is more show than substance, argues Cato Institute senior fellow Peter Van Doren.
“The cost of the oil stockpiled in the SPR is almost certainly greater than the highest annual average cost of oil ever encountered in world markets,” he said. “The good news about the drawdown of the SPR in 2022 is that it occurred when oil prices were high, and the refilling is occurring when prices are at pre-Ukraine war levels. Thus the timing of the release seems to be more economically sensible.”
Such was the idea when Biden announced he’d begin refilling the SPR when oil prices dipped below $75 a barrel, after drawing it down when prices averaged $96 per barrel.
“Careful economic analysis to determine how this year’s SPR release affected crude and gasoline prices will eventually be done,” Van Doren said. “But that may not be the point of the SPR; It allows the president to claim to be hurting Russia and protecting American consumers at the same time.”
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With prices easing and the midterm elections in the rearview mirror, the political discussions about oil may cool off for a period. But the Biden administration will remain mindful of the issue, especially because gas prices are so volatile and visible to consumers.
“We have more work to do, as we know,” Jean-Pierre said this week. “The president has been doing a lot of work on getting that gas price down. And we have seen that fall about $1.75.”