The President makes short and long-term proposals to curb fluctuating gas prices

Gas companies say no single firm sets the price for a gallon of gas.
Published: Apr. 13, 2022 at 6:32 AM AKDT
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WASHINGTON (Gray DC) - As gas prices fluctuate across the nation, the President has a plan to lower costs in both the long and short term. But, some oil and gas companies claim they need policy stability in Washington to feel confident to invest.

AAA pegs the national average for gas at $4.10. That’s down from one month ago when gas was $4.33. One year ago, the national gas average stood at $2.86.

“We’re coming off a pandemic that really scrambled supply and demand but what we’re seeing right now is Putin’s price hike on gasoline prices,” said Ali Zaidi, White House Deputy Climate Advisor.

The President is focused on increasing supply.

On Tuesday, he announced a plan to expand the sale of E15 gasoline, a 15% ethanol blend, this summer. The Environmental Protection Agency plans to issue the national emergency waiver to increase the fuel supplies. The White House claims E15 can save families 10 cents per gallon on average. It’s currently sold at 2,300 gas stations.

The president also announced a plan that includes a proposed fee on companies that lease federal land but are not producing from the wells. Companies that produce on the leased acres and existing wells would not face the higher fees.

Mike Sommers of the American Petroleum Institute said that fee sounds like an additional tax.

“It certainly would be the first case of someone increasing taxes and expecting more in return. In terms of development, we would have great concerns about an increased tax on American companies that are trying to produce American energy during this time of high oil and gas prices. We’re focused on making sure that there’s long term development here in the United States so that we can provide energy security not just for Americans, but for the world,” he said.

Sommers said, in the long-term, the Biden administration is pushing for a larger reliance on renewable energy and electric cars. However, he noted that idea competes with the notion that companies need to improve production.

“A number of members of Congress.. are saying that oil and gas industry here in the United States isn’t producing enough while at the same time they’re saying that we should stop producing and make a faster transition to renewables. This is a huge concern I think that we have about what the world should be doing right now to advance oil and gas because the world is going to continue to consume these products for decades and decades to come,” said Sommers.

Chairmen, CEOs, and presidents of oil and gas companies from bp America, Chevron, ExxonMobil, Devon Energy, Shell, and Pioneer Natural Resources Company testified via teleconference on Capitol Hill in April. They told the Energy and Commerce committee that increasing production on wells that are not currently in use requires more workers and equipment.

They said they are willing to increase production and invest in renewable energy. But, they said they need predictability and stability in the policy-making in Washington in order to feel confident to invest.

They also said they are not hoarding or price gouging gas.

“We know that today’s high prices at the pump are hurting Americans, the impact of high energy costs, underscores the importance of reliable and affordable energy supplies,” said Darren Woods of Exxon. He added, “no single company, sets the price of oil or gasoline, the market establishes the price based on the available supply and the demand for that supply.”

Meantime, the President has moved forward on a plan to increase supply by dipping into the Strategic Petroleum Reserve. In March, he announced the largest release in history, putting one million additional barrels on the market per day for the next six months. Zaidi calls the 6-month release a ‘bridge’ to give oil and gas companies the time needed to increase their production.

“That is just a dramatic exercise of the president’s authority in a way that we’ve never done before in the history of the United States. And, it is directly designed to counter the supply challenges that come from Putin’s war and aggression in Europe,” he said.

Zaidi said the president is also focused on new fuel economy standards, electric car production, and technology to weatherize and retrofit homes.

“The long-term play here, and it’s not a long-term play we start in the long term, it’s something we’ve got to get doing right now is to accelerate the adoption of zero emissions vehicles like electric cars and trucks. And, what we know is that if we do that, that means for the average family, 900 bucks per year that they would have spent on gasoline that they no longer have to. And for the economy, that means over a million barrels per day of oil that won’t need to be consumed or purchased from somewhere else,” said Zaidi.

Republicans held their own press conference in April to discuss gas prices. They raised concern over dipping into the national reserve. They also accuse the President of handcuffing oil and gas companies by not granting more permits and leases for pipelines and pumping on federal land. They say the president should focus on how more American oil and natural gas can be drilled and delivered.

Republicans want the President to once again start construction on the Keystone XL Pipeline. That pipeline was the subject of protest by several environmental groups.

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