The author of your pain at the pump

James Freeman:

People wondering who’s really in charge at the White House may be reassured to know that the emerging economic policy appears to be the work of a career politician.

In the Washington Post Tyler Pager, Jeff Stein, Tony Romm and Cleve Wootson report:

President Biden appealed to Congress on Wednesday to suspend the federal gas tax, saying it was critical to reduce the pain Americans are feeling at the pump. “I promise you I’m doing everything possible to bring the price of energy down,” Biden said, as images of oil pumps and gas stations flickered on the wall behind him.

But the notion of a gas tax holiday was met with instant criticism — not only from members of both parties on Capitol Hill, but even from many officials within the administration who said privately that it would probably do little to significantly lower gas prices.

Top Treasury Department officials expressed doubts about the gas tax holiday, and at least two top White House economists also privately conveyed reservations, according to two people familiar with the internal deliberations who spoke on the condition of anonymity to disclose sensitive conversations.

No doubt White House economists familiar with the concepts of supply, demand and incentives are also not entirely on board with the president’s decision to blame high gas prices on each industry in the supply chain. Having previously aimed his rhetoric at oil producers and refiners, the president is now blustering his way down the distribution channel. In the Eisenhower Executive Office Building on Wednesday Mr. Biden said:

My message is simple. To the companies running gas stations and setting those prices at the pump: This is a time of war, global peril, Ukraine. These are not normal times.

Bring down the price you are charging at the pump to reflect the cost you are paying for the product. Do it now. Do it today. Your customers, the American people, they need relief now.

Nothing encourages people you intend to eventually put out of business like demanding they should also forgo profits today. Mr. Biden also claimed on Wednesday:

Now, I fully understand that a gas tax holiday alone is not going to fix the problem, but it will provide families some immediate relief — just a little bit of breathing room — as we continue working to bring down prices for the long haul.

Does the president really mean it when he says he’s working to bring down prices for the long haul? If so, he’s blessed with yet another opportunity to encourage U.S. oil production before he jets off next month to encourage Saudi oil production.

In the New York Times Lisa Friedman reports from Washington:

President Biden’s top aides are weighing whether to ban new oil and gas drilling off America’s coasts, a move that would elate climate activists but could leave the administration vulnerable to Republican accusations that it is exacerbating an energy crunch as gas prices soar.

By law, the Department of Interior is required to release a plan for new oil and gas leases in federal waters every five years. Deb Haaland, the Interior secretary, has promised Congress a draft of the Biden plan will be available by June 30.

Spoiler alert: U.S. consumers and PGA Tour officials should prepare themselves for some bad news. It appears that at the margin Mr. Biden continues to favor the accumulation of oil wealth in Dhahran rather than Houston. “Several people familiar with the administration’s decision-making said it is likely to block new drilling in the Atlantic and Pacific oceans,” reports Ms. Friedman, who also notes:

Last month the Biden administration canceled lease sales in federal waters off Alaska’s Cook Inlet, citing a lack of industry interest.

The Cook Inlet basin, at one time Alaska’s primary source of oil, is now mainly a source of natural gas for local utilities and large-scale projects have been rare in recent years, energy experts said. Still, the industry wants the Arctic waters available for future possible leases.

If the past is prelude, the future will not bring much oil availability from federal lands during the Biden era. Adds Ms. Friedman:

Shortly after taking office, President Biden signed an executive order to pause the issuing of new leases — but a successful legal challenge from Republican states and the oil industry has forced the administration to hold new lease sales.

The administration is appealing that ruling.


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