It’s a political joke with little basis in fact and a coping mechanism to deal with high gas prices
If you’ve pumped gas anytime in 2021 you’ve probably noticed how much more you’re paying compared to last year.
And a few of you might see a funny little sticker of Joe Biden placed on gas pumps, Biden often pointing at the price of gas or your total.
The two trends, if you haven’t figured it out, are related, but it’s not what you think.
Here’s an example below.
Republicans seem to get a kick out of it, too.
It’s popular, as of late, to blame Joe Biden for everything, whether it’s related to COVID, inflation, supply chain issues, and now, the rising price of gas.
Under President Trump, the United States became a net exporter of oil for the first time since 1949.
Trump was also a supporter of the Keystone Pipeline XL and US’s fossil fuel and coal industry. Despite opposition from Native American Tribes, which the pipeline would run through their native lands posing localized environmental hazards and health risks if issues arise, Trump sold the promise of thousands of new jobs and a decreased dependence on foreign oil.
In comes Biden.
During his Presidential run, a key party issue Biden promised and delivered on was to reverse Trump’s earlier reversal of Obama not approving a permit for the Keystone Pipeline XL.
And, in response to an over supply of oil and low demand because of a decreased demand from the American consumer, American oil production and refining plummeted.
Now that gas prices are up, Americans are incorrectly correlating the two, if Trump was still in office we would still be a net exporter and wouldn’t have high gas prices.
Thanks a lot, Biden.
“The primary reason for this drop in crude oil prices was the pandemic. The pandemic drove the world’s oil market to become massively oversupplied, inventory dramatically increased and prices collapsed“
“In response to the low demand, major oil-producing countries cut down on their own oil production.“
“But the cut meant oil producers weren’t ready to meet the demand for crude oil once it renewed this year thanks to easing of COVID-19-related restrictions.“
Now that increased demand is up thanks to easing of COVID-19 lockdown restrictions, suppliers, and refineries, are racing to meet demand, both raising the price for a barrel of crude oil and, as a result, the price of gas.
And, it’s true, the United States was a net exporter of oil in 2020. But, was it because of Trump?
According Robert Rapier, a chemical engineer and energy analyst for 25 years, digging into why the United States ended up being a net exporter last year,
“Who is responsible for what was — at least before the Covid-19 pandemic — the highest oil and natural gas production in U.S. history? Obama? Bush? Trump?” Rapier asks.
None of the above. The person most responsible is the late George Mitchell…the “Father of Fracking.” It was hydraulic fracturing that enabled the enormous growth rates of oil and natural gas production over the past 15 years. Who was president was largely irrelevant.”
“Giving credit to any president misses the most fundamental underlying reason for the gains in U.S. oil and natural gas production.”
“But, we would’ve had a cheaper supply of readily available gas if we had the Keystone Pipeline XL!” The sticker placers and Facebook commenters would say.
But would we?
It took two years to build Phase 1 of the Keystone Pipeline. How would a pipeline extension, not even built and in operation, lower gas prices today?
As for how much control Biden has over how much our American oil producers extract and refine, it’s, according to Clark Williams-Derry, an energy finance analyst at the Institute for Energy Economics and Financial Analysis, not up to president Biden, but largely up to the price of crude oil and the American investor.
2020’s oversupply of oil, although great for regular Americans at the pump, meant weak returns for energy partners.
“That is what oil financiers are demanding. In response, (American) executives are vowing they’ll be responsible, and focus on profits over oil.”
Contrary to popular belief, American oil companies do not have your best interests in mind.
Oil producers and investors are actually enjoying high gas prices and see no reason to produce more, allowing the United States to become a net exporter of oil again, if it will result in overall less shareholder earnings.
Political commentator Leigh McGowan (aka PoliticsGirl) brilliantly pointed this out in one of her most recent videos, calling out oil companies for their consolidated power and corporate greed in light of high gas prices.
Gas is expensive and sure, we could cut taxes on it but that won’t solve the problem which, as always, is consolidated power & greed. pic.twitter.com/knbulBYD5U— PoliticsGirl (@IAmPoliticsGirl) February 18, 2022
William-Derry’s conclusion also aligns with Rapier’s, that Biden and his administration have little control over supply-side economics.
“Anybody who blames a politician for high prices is ignoring basic market dynamics,” concludes Williams-Derry .
Regarding Biden’s other oil-related actions taken by his administration, it’s true they will affect the outlook for fossil fuel energies, but that’s a long-term effect we have yet to see.
In conclusion, quoting McGowan,
“So, people can keep putting the Biden I Did That sticker on gas pumps across America, but it only shows how little they know who the real villain here is, and it’s not the President. As usual, it’s corporate greed.”