Oil and Gas Companies Aren’t to Blame for Pump Prices
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Under the guise of lowering gas prices, Democratic leadership in the House and Senate is ramping up legislation-creation efforts and railing against oil and gas companies, according to POLITICO Pro (subscription), The Wall Street Journal (subscription), E&E News (subscription), Punchbowl News, CBS News and Bloomberg (subscription).
What’s happening: In fact, gas prices are dramatically on the rise owing to a combination of factors, including lowered U.S. production, the same supply chain issues that have disrupted the shipment of other goods, limited production by OPEC countries, continued fallout from cyberattacks and Hurricane Ida, a shortage of tanker drivers and more, according to CBS News.
- But the situation is neither as black and white nor as predictable as President Biden would have it.
- “Individual retailers set gas prices based on what they expect their future fuel deliveries to cost,” reads the Journal editorial. “But they have no clue right now due to all of the global uncertainty. Oil prices have plunged this past week in part because the United Arab Emirates said it would urge OPEC to pump more. But the cartel might not.”
Accusation from the Senate: “‘Over the past few days, oil prices have actually been decreasing, but the price of gas at the pump has not,’ Senate Majority Leader Chuck Schumer said Wednesday,” according to the POLITICO Pro piece.
The House, too: Rep. Frank Pallone (D-NJ), chairman of the House Energy and Commerce Committee, this week asked representatives from six oil companies to testify before his committee about why they were prioritizing “their own profits” by keeping gas prices “artificially high,” according to POLITICO Pro.
Democrats’ tax ideas: Congressional Democratic leadership has floated gas price-reduction suggestions, including the following:
- Gas tax “holiday”: The White House recently weighed in on this proposal, which would temporarily eliminate the 18.4-cent-per-gallon federal gas tax that funds infrastructure building as a means of lowering costs to consumers.
- Lease cancellation: “There’s also a proposal floating around Democratic leadership circles to enact legislation canceling oil companies’ federal leases unless they’re actively drilling,” according to the Punchbowl News article. “One Democratic source called this ‘use it or lose it.’”
- “Windfall profits” tax: Rep. Peter DeFazio (D-OR), chairman of the House Transportation and Infrastructure Committee, is pushing for an idea similar to the one floated earlier this month by Sens. Sheldon Whitehouse (D-RI) and Elizabeth Warren (D-MA) to enact a per-barrel tax on oil and gas companies. The Whitehouse tax would be equal to 50% of the difference between the current Brent crude price and the average crude price from 2015 to 2019, according to the Bloomberg piece. (Read the NAM’s response to that proposal here.)
But some Democrats aren’t so naive: “Is there normally a lag between a change in [crude oil] price and the price at the pump? Yes. The energy production system is complex and has many stages in the chain, and the volatility of the price per barrel has been huge in recent weeks,” Sen. Chris Coons (D-DE), who is close to President Biden, told POLITICO.
- Senate Energy and Natural Resources Committee Chairman Joe Manchin (D-WV) also expressed skepticism according to E&E News.
- “I have no problem bringing [oil executives] in to basically explain how the process works…we can all understand it a little better, rather than beating people up who are expected to provide the energy we need,” Sen. Manchin said Wednesday.
The Journal’s take: “President Biden is adopting Donald Trump’s habit of venting his political frustrations on Twitter,” according to a Wall Street Journal editorial this week. “‘Oil prices are decreasing, gas prices should too,’ Mr. Biden tweeted Wednesday. ‘Oil and gas companies shouldn’t pad their profits at the expense of hardworking Americans.’ Sorry, Mr. President. There’s no vast industry conspiracy to raise gasoline prices.”
The NAM says: “Americans are tired of partisan grandstanding and pass-the-buck politics,” said NAM Vice President of Energy and Resources Policy Rachel Jones. “Each of these ideas might look a little different, but they would all have the same result, and none of them would help with inflation.
- “Demonizing the very people we need to produce more domestic energy is a dangerous recipe for shipping jobs overseas and making dictators stronger. And manufacturers know that in the end, these bogus ‘make-someone-else-pay’ schemes always come back to haunt us. When we sacrifice our energy security, prices go up, global emissions go up, China gets stronger, and we become weaker.
- “Instead, we need to remove any roadblocks in America to increasing domestic energy supplies and building out our energy infrastructure, which, by the way, includes renewables as well as domestic oil and gas exploration, nuclear, biomass, hydro and other new energy sources. Now is not the time to fight about favorites; it’s time to stand strong behind all energy options and focus on our drive to sustainability and energy security.”
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Manufacturers Unveil Competitiveness Agenda Ahead of Midterm Elections
“Competing to Win” offers a path for bringing the country together around policies, shared values and a unified purpose
Washington, D.C. – Ahead of the midterm elections, the National Association of Manufacturers released its policy roadmap, “Competing to Win,” a comprehensive blueprint featuring immediate solutions for bolstering manufacturers’ competitiveness. It is also a roadmap for policymakers on the laws and regulations needed to strengthen the manufacturing industry in the months and years ahead.
With the country facing rising prices, snarled supply chains and geopolitical turmoil, manufacturers are outlining an actionable competitiveness agenda that Americans across the political spectrum can support. “Competing to Win” includes the policies manufacturers in America will need in place to continue driving the country forward.
“‘Competing to Win’ offers a path for bringing our country together around policies, shared values and a unified purpose,” said NAM President and CEO Jay Timmons. “The NAM is putting forward a plan filled with ideas that policymakers could pursue immediately, including solutions to urgent problems, such as energy security, immigration reform, supply chain disruptions, the ongoing workforce shortage and more. Manufacturers have shown incredible resilience through difficult times, employing more workers now than before the pandemic, but continued resilience is not guaranteed without the policies that are critical to the state of manufacturing in America.”
The NAM and its members will leverage “Competing to Win” to shape policy debates ahead of the midterm elections, in the remainder of the 117th Congress and at the start of the 118th Congress—including in direct engagement with lawmakers, for grassroots activity, across traditional and digital media and through events in key states and districts as we did following the initial rollout of the roadmap in 2016.
The document focuses on 12 areas of action, and all policies are rooted in the values that have made America exceptional and keep manufacturing strong: free enterprise, competitiveness, individual liberty and equal opportunity.
Learn more about how manufacturers are leading and about the industry’s competitiveness agenda at nam.org/competing-to-win.
The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs more than 12.8 million men and women, contributes $2.77 trillion to the U.S. economy annually and accounts for 58% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org