Remember when the White House claimed that presidents don’t control gas prices? Apparently that only counts when gas prices rise from $2.464 per gallon at inauguration to $5.107 over 17 months. When prices drop fifty cents in a month at the end of that spike, however, it’s Miller Time in the Oval Office.
Or so Joe Biden and his team tried to claim yesterday afternoon, prior to the release of the weekly EIA average price:
Gas prices have been dropping for 34 days straight, about 50 cents a gallon. That saves the average driver about $25 a month.
I know those extra dollars and cents mean something. It’s breathing room. And we’re not done working to get prices even lower.
— President Biden (@POTUS) July 18, 2022
It’s dropped 34 days straight, eh? What about the 510 days of Biden’s presidency that preceded those five weeks? Well, we’re fortunate that the EIA supplies the data for that. Here’s the chart showing the entire 545-day run of Biden’s impact on gasoline, rather than just the last 34 days:
At which point does Biden want to take responsibility for gas prices? Only in the last 34 days? That’s absurd. Biden campaigned on ending the use of fossil fuels and made that goal his top priority. On Day 1, Biden signed EO 13990 imposing all sorts of new obstacles and costs on oil and gas infrastructure, which dried up investment capital and left the US with an inability to significantly increase its domestic supply of crude and to expand its refining capacity. Biden owns every step along this trend line.
Worth noting: This isn’t a “return to a pre-COVID norm,” either. Before Biden became president, the last time we had sustained gas prices above $3 a gallon was in 2014. The average gas price at the beginning of March 2020 was $2.514.
That brings us to the big question: How did those prices fall over the last 34 days? Did Biden bring new supplies of gasoline on line? Nope — actually, demand went down in the second quarter of the year, which the EIA reported as Biden sent out this laughably false claim to credit for it. The EIA chalks up the decline to vehicle efficiency and the impact of high prices, a point to which we’ll return in a moment. In other words, we brought the price down rather than Biden:
Based on weekly estimates in our Weekly Petroleum Status Report (WPSR), less gasoline has been consumed in the United States during the second quarter of 2022 and early July than during the same period in 2021. Our latest Petroleum Supply Monthly (PSM) confirms the trend, which shows that U.S. gasoline consumption (measured as product supplied) averaged 8.8 million barrels per day (b/d) this April, or 0.4% less than during April 2021. …
Data from the U.S. Department of Transportation show 1.6% more vehicle miles traveled (a measure of travel by vehicles) during April 2022 compared with April 2021. Increased travel tends to result in more gasoline consumption; however, increased fuel efficiency in vehicles allows drivers to travel more miles using less gasoline and can offset the increased travel.
Before we get too caught up in vehicle efficiency, let’s recall that we didn’t travel nearly as much in 2020 and 2021 as we have in 2022. The pandemic shut down a lot of destinations, including daily travel to work. A rebound of 1.6% on miles traveled from 2021Q2 to 2022Q2 seems very low, given the context of a partially shut down economy as the basis for the comparison. Besides, new auto sales have been slower than usual because of the chip shortage, so where did all of this new efficiency originate — and why just in Q2?
The EIA tries to shrug off higher pump prices, but it’s tough to argue that a sixty-one percent hike in price will have “little effect” on demand:
Higher gasoline prices, which were up 61% in June 2022 compared with June 2021, may have resulted in less travel during the month, although changes in gasoline prices have historically had comparatively little effect on consumption in the short term.
Well, your mileage may vary. (Get it?) This looks more like a decision by consumers to use less gas, especially for vacations. This summer was supposed to be our big Return to Normal, or as Allahpundit put it more than once, our Hot Wet Summer of Love. All of that anticipated economic activity should show up in other reports, and when it doesn’t, we can get a pretty good read on why prices dropped 10% in 34 days after rising 107% in the preceding 510.
By the way, prices are likely to start rising again, the Washington Post warned this weekend, and likely by more than just 50 cents. That will make Biden’s claim yesterday a bit … awkward:
Drivers relieved by the recent dip in gas prices may be in for a shock when the summer winds down, with energy analysts warning a fresh round of price surges could emerge as soon as October.
The prospect of a new gas price jolt coinciding with midterm elections has the White House and many Democrats on edge.
The price concerns are tied to the timeline for stricter sanctions on Russia that will further choke the global oil supply. J.P. Morgan has warned that in a worst-case scenario — in which Russia retaliates by shutting down its supply altogether — the price of oil could jump to $380 per barrel, more than triple what it is today.
“If you were to ask me where could oil prices go, I would say pick a number,” said Michael Tran, managing director for global energy strategy at RBC Capital, who says that while the outlook is murky, several indicators point to a price rebound. “This is the tightest oil market we have seen in a generation or more.”
You know what would loosen it up? More American production and refining, which would rob Russia of its strategic economic strength — not to mention make OPEC less of an issue for the West. Biden hasn’t figured that out, because he can’t even play checkers on gas prices very well, let alone chess.