Gasoline Prices: Where Political Fantasy and Reality Collide

The sharp relief between fantasy and reality of America’s energy needs is on full display at gas stations around the country this week after President Biden’s announcement that he is banning all Russian oil and gas energy imports. According to AAA, the price for a gallon of regular gas is now at $4.17 per gallon, breaking the previous record high of $4.11 per gallon set in 2008.

After knee-capping the future of America’s oil and gas industry by suspending new oil and gas leases on federal land during his first year as President to score political points domestically, Biden turned to other nations, including Russia, to stem the increasing cost of gasoline. As a result, imports of Russian crude oil doubled, averaging 154,000 barrels per day in 2021, making Russia was the second-largest foreign oil supplier to the U.S.

The Domestic Problem

For all his talk about securing energy independence, Biden’s halting new oil and gas leasing on federal land was a measure designed to stall future domestic energy growth. Leases are the first part of a multi-step process, which include exploration, development, and ultimately full-scale production, a process that takes years to come to fruition. In many cases, leases turn out not to contain any oil or gas. 

While this was happening, the Biden administration pulled federal permits from projects such as the Keystone Pipeline, which would have linked large portions of the country to Canada’s vast petroleum resources. In addition to being our close friend and stalwart ally, Canada is our largest foreign oil supplier. 

Now that thousands of good-paying pipeline jobs are no longer available to those who were working on building easy access to foreign petroleum from one of our closest allies, what is the Biden administration doing to ease energy costs? To counter rising fuel prices, Biden released 30 million barrels of crude oil from the Strategic Petroleum Reserve. This is, however, a short-term fix to a long-term problem. 

The International Problem

In order to address the long-term nature of this issue, the White House sent a diplomatic delegation to Venezuela, a country publicly supporting Russian aggression in Ukraine, to negotiate for oil imports. This is particularly notable because the previous administration sanctioned Venezuelan oil companies due to horrific human rights abuses under President Nicolas Maduro. 

Energy independence frees America any leverage international despots and dictators have over our day-to-day lives. Similarly, energy exports are an important arrow in our international relations quiver, allowing us to bolster our friends and allies in times of need.

More than Petroleum

In his speech yesterday, President Biden called for “clean energy” and the transition to electric vehicles. To be clear, creating true energy independence means more than focusing on bolstering the fossil fuel industry. The reality is that sources of energy, particularly solar and wind generators, as well as their attending battery storage devices, require rare earth and other minerals that are largely under international control by countries such as China. Heavy-handed federal regulations make opening and operating rare earth mineral mines, not to mention processing the ores, extraordinarily difficult.

Bowing to the political pressures of what may come in the future compared to what has come today will only bring suffering to the American people.

In Depth: Energy

It is difficult – and perhaps even impossible – to overstate the relationship between readily available access to safe, affordable and reliable energy and individual prosperity and economic wellbeing. This is because energy is an input to virtually everything we produce, consume and enjoy in society. Think for a minute…

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