Making American Gasoline Greater Again
I am not an oil expert, but I am trying to put together some factors which have appeared in the press to solve the rapidly increasing gasoline price inflation.
The high price of gas may partly be price collusion, but it is also due to refineries being shut down during the pandemic. They have not restarted supposedly because they do not think it is worth the investment because of uncertainty with switching to electric cars. Supposedly, new Biden regulations on emissions also require investment. The shut downs normally provide a million barrels a day, which is 5% of the 20 million barrels a day which are used in the US.
The solution can be President Biden calling upon the Defense Production Act to restart the refineries. He can use some of the money in the Infrastructure Act to carry this out. He can use appropriations to the states with the refineries to spend on restarting and refurbishing the refineries in their states to provide jobs in those states.
C-SPAN, just before the January 6th first hearing, hosted the Republican presentation. Their new line is to forget the January 6th Trump Coup attempt and insurrection, which relied on a mob animated by Trump, after VP Pence, Attorney General Barr, 60 courts, state legislators, and Secretaries of State managing state elections refused to go along. Instead, the Republicans from oil producing states said that we had to go back to their complete reign under Trump. That involves more leases on government land, offshore drilling, restoring the Keystone pipeline, achieving energy independence, and getting more oil from Alaska, and Canada, and, I presume, removing environmental standards from refineries. So oil companies would not only be getting their exhorbitant prices, but also retaking their previous reign over the American economy.
None of the above does anything to solve the high prices in the next couple of years, except removing the hard won environmental standards, which are needed to protect the health of those in the cities surrounding the refineries.
We have shown previously that the offshore drilling off of California is a pittance of even California’s oil needs, but endangers the much more valuable shore and beach economies and business and housing values. That is true on all other shores of the United States and elsewhere.
President Trump had trumpeted many times that we had now already achieved energy independence, although that is a serious misunderstanding that we export half of our oil, and import another half of it. Expanding our drilling is not necessary now, other than continuing the fracking wells, which have to be redrilled in a field every few years as they run dry. It would only matter if American oil was restricted to be sold only in America. Instead, more oil production could just be sold abroad to further maximize oil company profits.
The Canadian oil that would have been transported by the Keystone pipeline was transported by oil tank cars in trains, and at the now higher prices undoubtedly still pays off. The Alaskan offshore oil has been considered risky even under Trump, and the onshore drilling is prohibited on the ANWR to save crucial wildlife areas. In any case, it would take years to develop, and there still would not be open refineries to handle the oil.
So, the Republicans had no meaningful replies to the current gas price inflation. It also shows that the situation is not President Biden’s fault, since the Saudi’s and OPEC are also limiting production to artificially drive prices up. Economic sanctions are quite necessary to stop Russian expansion into NATO countries, which could start a world war, and to put peaceful economic pressure on Russia to halt its unjustified and illegal invasion of Ukraine.
Will the Republican Senate (West Virginia’s Senator Joe Manchin is a fossil fuel producer) go along with this solution, and lose their most valuable campaign issue, just to help all American consumers? Of course not!
The American public can do many things to lower their gasoline consumption, and hopefully bring oil companies back into competition for sales. Part of the price rise may be temporary shortages due to people filling up with the expectation of higher future prices.
We have had two years of many working from home and from local business hubs, as well as distributed company quarters. That can still be done on a partial basis. Less traffic also means better fuel economy. The waining of the coronavirus as well as the hopeful national or local restoration of mask requirements for public transportation could encourage commuters to return to those modes of transportation. The high prices should provide extra incentives to car pool. They also could encourage people to use their cars in Econ mode, and to obey the speed limits. Businesses could cut back on business travel, for the much more time effective zoom meetings. The same with academic conferences, and even university classes. Retail and entertainment businesses should back a government solution, since consumers have internet ordering and delivery available, as well as many streaming options for entertainment.
Well, there are many available solutions, and it is up to us individually and collectively to make use of them.
