Joe Biden Shares the Blame for the Nation’s Soaring Gas Prices
The political season is upon us again, and both parties are arguing about who is to blame for the nation’s high gasoline prices. Campaigns muddy serious policy discussions, so let’s take a look and place blame wherever it belongs.
The average U.S. gasoline price is $3.60 per gallon. Those who have an interest in convincing Americans this is a bargain—politicians trying to retain office—point out that this is well below the June 2022 peak of $5.03 per gallon, and opponents will say current prices are well above the April 2020 low of $1.94 per gallon. But just how much finger pointing is warranted? Obviously global events (a pandemic, a war, inflation) matter a lot. But the Biden administration is not entirely free of blame.
While it’s true that the pandemic stunted oil demand and depressed prices, it is important to realize that gasoline prices were already low and had been enjoying historical lows for years since the fracking boom sent U.S. oil production surging. Trump would like to take credit for that, though the trend started under Obama. But that happened despite Obama’s policies rather than thanks to them, and Trump can take some credit for keeping the trend going since federal drilling permit approval times fell from 196 days in 2016 to 94 by 2019.
Then when Biden took office, prices started climbing again. Most of this wasn’t Biden’s fault, as two big factors that were mostly outside of his control that drove up prices: Rising transportation demand as the world started getting back to normal, and a war involving Russia, one of the world’s largest oil producers. The latter point, though, matters less than the Biden administration would like to claim. Gasoline prices were surging before Putin’s invasion of Ukraine and had already risen by $1.16 per gallon by that point since Biden took office (with another $1.45 per gallon to go). But even with prices falling since then, gasoline is still about 77 cents per gallon higher today than it was in July 2019.
The biggest likely culprit is inflation. The inflation adjusted gasoline price from July 2019 would be about $3.45 per gallon, not far off from $3.60, but not exactly in line with it either. A lot of ink has been spilled elsewhere about who is to blame for inflation, and I leave that to the relevant experts.
But even if Biden were blameless for inflation, he’s not off the hook, because his energy policies were all aimed at restricting oil production, which leads to higher gasoline prices. Within hours of taking office, he imposed a moratorium on drilling permits on federal land. Not long after, he implemented a moratorium on oil and gas leases (later ruled illegal). And offshore energy leases remain impossible to get, despite a mandate from Congress. Additionally, scarce refining capacity is now a chronic condition in the United States, as refiners see no value in investment amidst the administration’s attempts to force a transition to electric vehicles.
As always, gasoline prices are influenced mostly by economics, and partially by presidents. Biden may bemoan high gasoline prices as out of his hands, but he hasn’t done anything to help either (unless you count threatening oil companies with abuse of power). For a past corollary, President Ronald Reagan managed to address high gasoline prices by ending price controls which led to a surge of production. Biden’s approach has been exactly the opposite, doing everything to limit production, making him blameworthy for policies that could only have exacerbated pump prices.
Like it or not, Biden was the one steering energy policy during a time of elevated energy costs across the board. While he can’t be blamed for things outside of his control, we can certainly blame him for failing to act, and Democrats are likely to feel the impact of their energy and economic policies at the polls this November.