Thanks to the compounded negative effects from multiple recent events, gas prices have surged across the country — averaging more than $4 a gallon as of April 10, 2022 — which has been cataclysmic for the average worker and the economy alike. Efforts by the United States and its allies to halt purchases of Russian oil to reprimand their invasion of Ukraine have been largely to blame for the skyrocketing prices. Most gas stations around the country have only two to three days of product in stock, and are therefore forced to charge customers what it will cost to refill their reserves, a concept known as “replacement cost.”
However, gas prices have been steadily increasing in the United States since the initial stages of the coronavirus pandemic, when costs plummeted so much that they even briefly turned negative. As families sheltered in place at home, the average family’s driving was cut in half, according to AAA. This plunging gasoline demand resulted in OPEC and other oil-producing nations reducing production by 10% of the world’s supply. Once restrictions eased and families returned to work and school, demand for oil once again increased but could not be satisfied after significantly diminished production. Thus, gas prices began a steady upswing, rising to the extreme levels we are facing now.
When President Biden took office in January 2021, prices had already reached $2.38 a gallon. Now, crude oil averages around $100 a barrel. While many have tried to point to Biden’s policies as a source for this surge, there is little to no evidence for this. As soon as he took office, Biden terminated the Keystone XL Pipeline, a decision that not only gained him his fair share of criticism but also signaled hostility to the oil industry. However, even if the Keystone Pipeline were in place today, the impact on prices would be measured in pennies. Prices would have continued to rise nevertheless.
Biden’s staggeringly low approval ratings have necessitated lowering gas prices on a bipartisan level. While some politicians have called for suspending gas taxes, this short-term solution would not only serve to be ineffective but would also betray our climate goals, as well as take away funds from Michigan’s transportation fund. As economists explain, “a full suspension of the gas tax would not lower the price of gasoline by the full amount of the tax because producers bear some of the tax burden.” What’s more, during past gas tax holidays in Indiana and Illinois, “researchers found that consumers don’t get the full benefit of the gas tax suspension; (rather,) some of their savings flow to oil producers.” A more effective short-term policy, proposed by Illinois, would instead freeze the gas tax at its current rate, allowing consumers to save millions of dollars while simultaneously honoring our country’s carbon neutrality commitment for 2050.
Another short-term solution would be applying pressure on our country’s largest oil companies to incentivize drilling. Currently, around 9,950 issued drilling permits are unused by oil corporations. Biden has accused these corporations of “sitting on” more than 12 million acres of federal land while consumers suffer at the pump. To prod these corporations to drill, Biden has introduced a policy to Congress that would “make companies pay fees on wells from their leases that they haven’t used in years and on acres of public lands that they are hoarding without producing,” according to a statement from the White House. This would not only maintain consistency with Biden’s climate policies, but would also place the responsibility of drilling on flourishing and profitable oil corporations rather than further punishing individual consumers.
In light of all that though, it is imperative that the Biden administration and those to follow continue to push for less reliance on fossil fuels, with a focus on renewable energy sources for the long-term. When Biden took office, he initiated a sweeping agenda to combat climate change, one that included an ambitious plan to cut net carbon emissions in half by 2030. Though this is no longer feasible, Biden still has the opportunity to initiate positive change. The Build Back Better Bill — which is currently at a standstill in Congress — poses the best option. If enacted, it would decrease the United States’s carbon emissions by roughly 25% by 2030, getting about halfway to Biden’s promised target.
Biden also recently invoked the Defense Production Act, an attempt at accelerating the United States’s transition to renewable energy resources. The Cold War-era law provides serious financial incentives to companies who develop domestic supply chains for products such as lithium and nickel, materials used in batteries for solar wind farms, as well as electric vehicles. While it would take some time for these products to displace the demand for fossil fuels, for both climate and economic stability reasons, this is a worthwhile measure.
Changes in the everyday lives of Americans are also necessary to make this transition to renewable energy. The United States population as a whole is highly reliant on motor vehicles. Many prefer driving over any other form of transportation and feel connected to their cars. However, mass public transportation offers a long-term solution to the issue of rising gas prices and would greatly decrease carbon emissions. A study from the International Transportation Forum concluded that buses and trains release about a third of the carbon of a private vehicle. In other words, mass public transportation is a climate solution staring us in the face, yet many are hesitant to make the jump. Generally speaking, some areas are too rural to rely on public transportation, but it is also important to note that the majority of Americans live in urban areas, and a significant decrease in car usage would still be a large step in the right direction.
As the unpredictability of the oil market proves ubiquitous — which our current gas prices reflect — it is essential for our country to pressure oil companies to drill in the short term while divesting away from fossil fuels in the long term and investing in renewable energy resources. Relieving the financial burdens on working-class families while combating climate change is of the utmost importance.