When a news anchor faced Energy Secretary Jennifer Granholm about high fuel rates and asked about the Biden administration’s strategy to increase oil production in America, she broke into laughter. “That is hilarious,” she stated.
It was early November 2021, and gas costs were averaging $3.39 nationally. The press wasn’t laughing. And now, with the average cost well above $4 and still climbing, nobody else is either.
Americans feel the pressure build each time they fill up, obviously, but it doesn’t stop there. Think of all the activities, goods, and services that count on transportation, and one begins to see how greater gasoline prices increase costs throughout the entire economy.
What, many are asking, is going on with fuel costs? And what can be done?
Crude oil costs represent roughly half the cost of a gallon of gas, followed by refining costs, circulation, and state and regional taxes. Analyzing each shows where policy choices affect the price of gas.
- Let’s start with the last, most straightforward element initially.
State, county, and municipal taxes, most often utilized to fund transport infrastructure, go to most of the substantial differences in the cost of gas between states. While taxes and fees in Nevada average approximately 20 cents per gallon, neighboring California racks up 50 cents or more since of the state’s penalizing environment policies that are designed to dissuade individuals from driving.
- Distribution– the shipment of fuel to the client– is a relatively stable contributor to the cost of a gallon. However, even here, policy matters.
For example, federal law significantly restricts the ships available to deliver energy locally, which really makes it more affordable for some states to import fuel from Russia than from Texas. This is particularly real for seaside states with limited pipeline capacity (yet another policy option).
- Then there’s refining, the procedure that turns the oil into usable fuel.
Costs increase every summer season when the Environmental Protection Agency needs refineries to switch to more expensive blends of gas to comply with Clean Air Act standards. Some states likewise mandate that refineries make and store blends of gas, forcing clients to pay a green premium. Refinery expenses have also been increasing, as costs to adhere to the EPA’s eco-friendly fuel required are at record highs.
- Last, and definitely not least, is crude oil, which provides 90% of Americans’ transport fuel requirements.
Fuel rates tend to follow the cost of petroleum closely, and whatever else is equivalent, Americans see a boost of 2.4 cents per gallon each time the price of a barrel of crude oil increases by $1. Considering that oil is a globally traded commodity, the U.S. can’t set the price of oil. But domestic production– and the policies that allow or prevent that from taking place– can influence it.
The world is now experiencing crude oil prices well over $100 per barrel– costs not seen considering that 2014. The very best method to decrease oil costs– and, given the present context, dilute Russia’s sway in energy markets– is to increase supply. Yet President Joe Biden hesitates to make the policy changes that would allow this to occur.
Biden remains adamant that the path forward isn’t to utilize all the energy resources we have, but to force a shift to a narrow set of politically preferred technologies. So while asking the American oil business for short-term production increases to bail him out of political difficulty, Biden has actually made it clear that he means to put them out of operation in the long term.
To that end, the regime’s regulatory agenda intends to choke the energy supply. Even now, with Americans struggling, it wishes to make it more expensive and tough to explore for and produce oil, construct and operate pipelines, and access financing and investment. And that indicates it has to control consumer demand by preventing gas usage in the long run.
The only reason American households and services are not feeling the pain more than they already are is due to the fact that energy production is taking place mostly on state and personal lands, putting it a little more out of reach of Biden’s anti-energy program. In the meantime.
In the same month of Granholm’s disastrous interview, White Home press secretary Jennifer Psaki was asked whether the administration’s policies added to gasoline costs, to which she responded with unexpected and highly disturbing honesty:
“The rise in gas prices over the long term makes an even stronger case for doubling down our investment and our focus on clean energy options.”
In other words: High fuel prices are a feature, not a bug, of this administration’s policies. It’s all a part of the plan to ‘reset’ the market in the U.S and the world at large…a ‘Great’ reset… if you will.
H/T The Daily Signal
