As gasoline prices rise, Biden administrator takes responsibility for anti-competitive practices

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WASHINGTON, DC – OCTOBER 13: President Joe Biden delivers remarks after meeting with senior … [+] officials and stakeholders to discuss collective efforts to address bottlenecks in the global transportation supply chain in the East Room of the White House on Wednesday, October 13, 2021 in Washington, DC. (Kent Nishimura / Los Angeles Times via Getty Images)

Los Angeles Times via Getty Images

The Biden administration reached out to oil and gas producers on Wednesday, asking for their help in bringing down high fuel prices. Relying on three anonymous sources, Reuters reports that the talks also included discussions on other issues, such as reducing methane emissions. White House reporters attempted to ask President Biden himself what he planned to do on Wednesday against high gasoline prices, but the president simply stepped away from the podium. An anonymous White House official reportedly said: We are closely monitoring the cost of oil and the cost of gas that Americans pay at the pump. And we use all the tools at our disposal to fight anti-competitive practices in the US and global energy markets to ensure reliable and stable energy markets.

The anti-competitive practices in the US and global energy markets to which this anonymous White House official refers are not explained. It doesn’t really matter, because what the administration is now engaged in is to blame it on a problem that Bidens’ own policies have helped to amplify.

After all, the cancellation of the cross-border Keystone XL pipeline permit by Bidens as one of its first ruling acts has been viewed as a highly anti-competitive practice, by oil producers as well as by Canada, which would like to compete on the global market. by selling crude oil to the United States. What could be more anti-competitive than the government denying pipeline companies the right to compete in the market? What could be more anti-competitive than a president canceling an investment of $ 8 billion with the stroke of a pen? Now, instead of buying oil from our northern neighbors, American refiners are sourcing similar quality from Iraq and Brazil.

Wasn’t Bidens’ other day one action to impose a moratorium on the federal oil and gas lease program an anti-competitive practice? This moratorium, let us remember, was to last 30 days, finally lasted 8 months, and was only reactivated following multiple decisions unfavorable to the administration in the federal courts. Eliminating the ability of oil companies to compete to lease federal land is not competitive at all.

The President’s Energy Secretary Jennifer Granholm recently suggested that the administration consider reinstating the old 1970s ban on crude oil exports, a ban that Barack Obama repealed in 2015. The repeal of this ban The ban has been one of the most pro-competitive actions the federal government has taken affecting the oil and gas markets in the United States and around the world in modern times. It would be difficult to imagine a more anti-competitive action than to re-implement this irrational ban.

So if we want to identify anti-competitive practices in the US and global oil and gas markets, we don’t need to look any further than this White House.

As I have discussed here several times over the past few months, the price of gasoline at the pump has risen and will likely continue to rise because the price of crude oil in the world market has risen, and not by due to anti-competitive practices in the oil markets. . The price of oil has risen mainly due to the rapid rise in post-COVID demand and supply tension. Much of this was caused by normal market forces.

But the Biden administration itself has compounded this problem by doing all it can – or, as an unidentified White House official puts it, using all the tools at our disposal – to slow the growth of the government. national shale industry. Public policy is important, and the public policy of this administration has signaled that oil and gas is now an underprivileged industry in America. This is not a value judgment – its simple reality.

To those who say that this kind of signal to the markets doesn’t really matter, we must remember that the price of crude oil is set in a speculative market on which analysts and traders try to anticipate the impact. a range of factors on supply, demand and prices. in the future. Government policy is one of these factors. When these analysts and traders watch a US presidential administration pursue policies that they believe will reduce supply, it puts upward pressure on prices. This has been happening in the markets since election day 2020.

White House blame rejection efforts like this will do nothing to alleviate high gasoline prices. Neither do the appeals to the CEOs of oil and gas producers, who have little or nothing to do with the price of gasoline at the pump. If this president and his officials are serious about doing something about high gas prices, they would stop efforts to cripple our national oil and gas industry and allow it to do its job of providing reliable and affordable energy.

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