Donald Trump to Sean Hannity
We are already drilling. And gasoline prices have dropped.
President Biden has a dilemma. He has an inflation problem and a climate problem. The single biggest in-your-face embodiment of inflation is gasoline prices. Meanwhile, climate activists want America to set an example on reducing use of fossil fuels by stopping development of fossil fuel infrastructure.
The U.S. is producing as much energy as it ever has, but we don't hear Biden taking credit for it. The climate activist portion of the Democratic coalition considers it an earth-endangering compromise with the devil. Biden allowed new oil leases in Alaska and pipelines to please West Virginia Senator Joe Manchin.The presence of Green Party candidate Jill Stein and environmental activist Robert F. Kennedy, Jr. running as an Independent give climate activists a way to show their disappointment with Biden. That could be catastrophic for him.
Gasoline prices in 2019 and 2020 created the mental anchor as the "good old days" of low inflation/low gasoline prices when Trump was president. The price rose steadily in 2021 and by mid-2022 -- marked in light blue -- it was double the anchored "Trump price," fueling public discontent with Biden's handling of the economy.
In the 2010s Russia and Saudi Arabia kept world oil prices low by ramping up production. Their goal was end U.S. production of "tight oil" locked in shale deposits. The strategy worked. Oil companies had over-invested in expensive leases and development projects which were unprofitable through 2020. Once burned, twice shy. Domestic oil companies were slow to ramp up production in 2021. Biden got the blame for that.
U.S. producers are pumping 13.2 million barrels a day, more than pre-Covid heights of 2019. Pump prices vary significantly by state. This is less due to state gasoline taxes than it is to refinery location and design. Oil companies are looking ahead to electric vehicles and are reluctant to add refining capacity.
The public mood on the economy could work out for Biden. Gasoline prices have dropped from the high-water "anchor" of 2022, so there is apparent progress. Used car prices are back in sync with new car prices. Supply-chain dislocations have largely ended. Unemployment is low, but not so low as to frighten the Fed, which is signaling an end to tightening. Yields on long treasuries are dropping; mortgage rates may follow.
But voters don't pay attention to economic statistics. They notice message and branding. Biden may not get credit for the easing of inflation. Trump is the one saying he will take decisive action to lower gasoline prices: "Drill, drill, drill." Trump defined the long trend of an improving economy under Obama from 2009 through 2016 as "carnage," but then called it a great economy three months later. He was clear and forceful saying that the economy had been bad under Obama but Trump changed everything and made it great. Democrats were negligent and let that happen.
Biden has his brand: He is the one who criticizes fossil fuels. Trump is the opposite. Trump isn't warning us. He is bragging. He wants to be known as a "dictator" who will cut through the legal and regulatory obstructions of Democratic climate worriers. Climate polls well. There is a general and amorphous sentiment among a majority of Americans that something should be done. Something inexpensive. Something that inconveniences other people. But gasoline prices are immediate and urgent. People hate high gasoline prices.
The ideal situation for Biden would be for gasoline prices continue dropping and for Biden to get credit for it. A more likely one is that gasoline prices come down and Trump gets the credit. He is the one outfront cheerleading for more drilling.
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9 comments:
As long as we still have giant RVs towing SUVs down the highways and byways, gas is too cheap.
Making gasoline more expensive: now there’s a winning political message! 😀
MT it might work for most anybody but Regressives, spoiled rotten by decades of cheap gasoline, who could care less about clean air and water, as long as they get to pollute their way across the Country, regardless if consequences.
Thanks, Ed. I wasn’t speaking politically, of course, but as an advocate for our offspring. Unfortunately, we all know the conservative perspective: “Who cares?”
I was not making a value judgment. I was stating a political reality.
If you want to run for elected office or support a candidate, and the message is “I will raise the price of gasoline“, good luck with that. You will do as well as Walter Mondale did in 1984 when he said he would raise taxes.
Democracy means that voters have a say; not the voters you wish you had, the voters you actually have.
Mike, if we can't protect our grandchildren politically, we might as well give up. I'm not quite there, nor do I think you are.
You’re right, Ed, I don’t intend to give up, but I sure wouldn’t want to be running for office. As noted above, too many voters care more about cheap gas than they do about the world they’re leaving their grandkids. They probably figure Jesus is coming so it doesn’t matter.
Missing in the post is why gasoline prices vary so widely.
The reasons are:
- cost to run a gasoline station business
- state and local taxes
- prices vary whether it's cash, debit/credit card, or affinity
Gasoline is a commodity whose price changes daily from the refineries; it's a price that is readily available in the WSJ each day or from online quotes.
Then there is the transportation cost to deliver that gasoline (or diesel) to each station.
The main reason gasoline prices are so wide ranging is the application of federal, state, and local taxes.
Prices at the pump change almost daily. Why? Prices are typically adjusted at the stations after each new delivery.
At the local stations here in central Florida, normal gas stations are within a penny or two, plus adjustments for cash, credit, or affinity. Seldom does the price change from station to station at the retail level. I can get gas cheaper at Sam's, Costco, Wawa, and 7-11. For those latter 4, I simply provide my membership card or phone number and pump my own.
What isn't apparent to many people is the amount of taxes they might be paying. It's not the oil companies adding in all those extra costs that raise the prices.
You might ask why the map in the article shows some states in red, and what residents are getting for that added cost. Road maintenance? Perhaps...increased profits for the oil companies? Not likely.
Pump prices are something residents see everyday, and the taxes paid are rather invisible.
Biden anti-fossil fuels? That's laughably false.
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