Biden’s Empty Promise To ‘Work Like The Devil’ On Gas Prices

During a rare press availability on Thursday, President Joe Biden promised to “work like the devil” to address high gasoline prices at the pump. He said that as part of an answer in which he also admitted, “I don’t know why they keep moving and all that.” Thus, the President promises to work hard to fix the problem, but admits to having little understanding of its’ causes.

That lack of understanding on energy-related matters in general by this administration and members of congress is certainly an assessment with which many leaders in the oil and gas industry would agree. At a recent industry conference, the CEO of one large upstream company referred to the Biden administration as being “energy ignorant.” Another CEO admitted that their company has “no relationship at all” with anyone in the administration. Another told me during an interview that they found it “impossible” to even get a meeting with relevant officials at the Department of Interior or DOE. How can any government official really understand an industry they refuse to to have a conversation with?

Biden and Energy Secretary Jennifer Granholm have spent the better part of a year promising to do everything at their disposal to slow the rise of oil and gasoline prices, efforts that have generally boiled down to their urging OPEC to produce more oil. The net result has been an inexorable rise in energy costs. As of Friday’s close, the price for West Texas Intermediate was up by 65% from a year ago; AAA reports that the average price for a gallon of regular gasoline stood at an 8-year high of $3.48, up by 40% from 12 months ago. If the President has been working like the devil to address energy prices, whatever he’s been doing hasn’t helped. If he has any new ideas, he didn’t opt to mention them at Thursday’s presser.

The situation between Russia and Ukraine hasn’t helped, of course, but neither has the administration’s rhetoric about the situation. Crude prices jumped by 3.5% Friday after National Security Advisor Jake Sullivan told reporters that an invasion by Russia was imminent and urged U.S. citizens in Ukraine to leave within the next 24 to 48 hours. The promise by the President himself earlier in the week to “end” Russia’s Nordstream 2 pipeline in the event of an invasion also raised tensions in the market. How exactly the U.S. would “end” a fully-constructed natural gas pipeline owned by Russia that only requires German and EU final approval to start operations was unclear; the threat, however, was real.

It isn’t only the administration exhibiting this lack of understanding about energy. Just at a time when the booming U.S. liquefied natural gas industry is playing a major role in supplying Europe’s natural gas needs during this time of crisis, 10 Democratic senators sent a letter to Sec. Granholm recently to urge her to consider imposing limitations on America’s ability to export natural gas.

Their reasoning displayed the same “energy ignorance” which that CEO talked about a few weeks back. In the letter, the senators express the belief that LNG exports are causing their constituents to pay higher prices for natural gas in power generation and home heating bills. But the realities of the market do not support this claim.

Over the past month, as U.S. LNG exports to Europe have risen dramatically, the domestic Henry Hub index price has remained essentially stagnant, closing at $3.91 per Mmbtu Friday, as opposed to the January 13 closing price of $4.00. Two months ago, on December 13, 2021, the price stood at $3.79; again, essentially static.

Two of the senators who signed this letter represent Sec. Granholm’s home state of Michigan. This is a state whose Governor, Gretchen Whitmer, has positioned herself as a fierce opponent of the permitting of new, modernized pipelines and other oil and gas infrastructure to service her state. Imposing artificial constraints on the ability to transport oil, natural gas and propane will inevitably impose higher costs on consumers.

Seven of these ten senators are from New England states. There is no mystery why their constituents pay higher than the national average prices for natural gas and electricity: Their states have for more than a decade now been denied access to cheap and abundant natural gas produced in the nearby Marcellus Shale basin by the state of New York. Throughout his multiple terms in office, former Gov. Andrew Cuomo served as one-man blockade opposed to the construction of any new pipelines across his state, which stands between the Marcellus and New England. New Gov. Kathy Hochul shows no inclination to change any of her predecessor’s policies.

As a result, we see the spectacle of LNG tankers cruising into Boston Harbor each winter, often bringing cargoes in from Russia, 4,000 miles away. That importation of natural gas from overseas means that, rather than bearing the comparatively low domestic price for natural gas, New England consumers are held hostage to much-higher international prices, which in Europe right now are 6 to 7 times more. If these New England senators really want to help their constituents, they should be lobbying Albany, not Washington, DC.

President Biden is certainly far from the only politician in the nation’s capital who displays no understanding of why energy prices keep getting higher. To his credit, he even admits it. But if he really plans to “work like the devil” to address the problem, then he, these senators and many other policymakers should really study up on the matter before proceeding. Otherwise, it’s just another empty promise that would likely end up making the problem even worse.