It’s only been a few short years since the United States demonstrated that it can compete in the global oil market, and in fact, quite literally drilled its way to lower gasoline prices.
Yet, with gasoline prices once again on the rise, the Biden administration continues to look beyond U.S. borders to OPEC+ to solve the problem. Energy Secretary Jennifer Granholm recently assured Americans that “all tools [are] on the table,” but the administration’s actions suggest otherwise.
Over the past year, President Biden cancelled the Keystone XL pipeline which would have safely transported Canadian crude oil to Gulf Coast refineries where it would have been turned into gasoline, among other things.
He then followed up that action by placing an illegal ban on federal oil and gas leasing – and won’t be holding an onshore sale at all this calendar year.
Even with sales now announced, uncertainty remains as a report promised in “early summer” that is expected to detail changes to the leasing program still hasn’t been published and Congress is debating its reconciliation package that includes “numerous items that will decimate American oil and natural gas producers,” according to the Independent Petroleum Association of America and others.
Those changes include a tax on natural gas that would send consumer costs skyrocketing for households already experiencing the crunch of higher gasoline prices.
Rather than look inward – at both the impacts of these domestic policies and the potential for U.S. producers to increase production – the administration has repeatedly gone to OPEC to solve the problem.
And now, Secretary Granholm is blaming the oil cartel for increased U.S. prices. As the Washington Examiner reports:
“Indeed, Granholm pointed the finger again at the OPEC+ group of oil-producing nations that ignored calls this week from the U.S. to increase output beyond what it already has planned. ‘Everybody was hoping that there would be additional supply made available so that prices would not be jacked up,’ Granholm said.” (emphasis added)
But what does the administration consider part of the domestic toolbox? Banning crude oil exports.
Except that wouldn’t help with global prices – the same global prices that determine U.S. gasoline prices. That’s because one of the largest determining factors of U.S. gasoline prices is based on the Brent crude oil price, which is determined by international supply and demand.
In other words, even if the United States stopped exporting oil tomorrow, it wouldn’t reduce domestic gasoline prices. In fact, it could make them worse as it would remove U.S. supplies from the global market at a time when demand is outpacing supply.
Back in 2012 in response to high gasoline prices, then-Vice President Biden said:
“There’s no way to get energy independent unless you do all of the above. I get confused by our friends who don’t think we should do any of that.”
That hasn’t changed in the last decade.
This post appeared first on Energy In Depth.