PRICE INCREASES
There have been a lot of concern about high fuel prices. Some politicians have blamed it on a government war on fossil fuels. But the government has not set any prices on anything. So it's worthwhile to review what government policies might cause high fuel prices. Generally speaking, the price of gasoline usually goes up when the price of oil goes up. One of the most popular fake news stories is that the cancellation of the Keystone pipeline project caused the price of gasoline to go up. But not a single drop of oil flowed through that pipeline, even in 4 years of the Trump administration. So canceling that pipeline had no impact on gasoline prices. And even if the project was completed, it was unlikely to bring down gas prices https://www.mana-now.com/post/the-keystone-xl-pipeline. Republican politicians have had think tanks construct enormous fantasies about the energy policies of the Biden Administration. However, it is interesting to review possible government policies that might influence the price of oil and gas. And there has been so much bragging about the low gasoline prices in 2020. It's worthwhile to review the brilliant strategy used then to see if that feat can be reproduced.
DRILLING PERMITS
One factor often mentioned and a limitation to the growth of oil production is the number of approved billing permits. The Biden administration began with the overly ambitious plan to increase the use of alternate fuels and reduce the dependence on fossil fuels. The motivation was to reduce pollution and minimize the impact of climate change. However, the rapid recovery from the disastrous mismanagement of the COVID virus crises caused a huge demand for energy that could not be handled by alternate energy sources. Biden did try to block oil drilling on public lands. But this was blocked by the court (1). By the end of the first year, the Biden administration had approved 34% more drilling permits on public lands than Trump did in his first year (2). Biden was attacked by environmentalists for that. By 2023, the Biden administration issued 50% more drilling permits than in the 3rd year than Trump's 3rd year (3). A lack of drilling permits from the Biden administration was not the cause of an oil shortage or cause of high gasoline prices (4,5). . Oil producers decided not to drill for more oil but instead to enjoy the high profit margins and return capital to share holders (6, 7, 8, 9). Energy companies were very afraid to ramp production because they were going to get punished by investors. The reason that U.S. oil companies haven’t increased production is simple: They decided to use their billions in profits to pay dividends to their CEOs and wealthy shareholders and simply haven’t chosen to invest in new oil production. According to Bloomberg, “U.S. Oil companies generally have been reluctant to pump more, preferring to steer cash flows back to investors instead of spending it on new drilling that could flood the world with cheap crude.”
OIL PRODUCTION
Saudi Arabia and Russia have the most impact on the world oil market because they have more surplus oil not needed for domestic consumption. In America there has been only twice in recent years has the president been able to directly affect the amount of oil on the world market. In 2020, the price of oil was very low, and Trump worked hard to increase the price of oil (10, 11, 12) He said that he was trying to help American oil companies. To many people, it appeared that he was trying to help Russia, which was getting hurt by Saudi Arabia. In any case, he was not helping American consumers. Oil production was very low in America because over 20 million people were unemployed and the economy was crashing due to the mismanagement of the coronavirus https://www.mana-now.com/all-news/categories/the-virus-mismanagement. In 2020, while millions of Americans were out of work and many were sick, Trump was working hard to increase the price of oil and gas (10, 11, 12). By 2022, America was the leading oil producer, but gasoline prices were peaking at $4-$5 a gallon (13, 14, 15). Even the professional propaganda organization called the Heritage Foundation admits that America was the leading oil and gas producer (16). The story that gas prices are high due to a shortage of oil was completely busted. By 2023, America was producing more oil than any country in the history of the world. And significantly more than any Trump year (17, 18). America continues producing oil at world record rates (19). The propaganda that the price of gasoline is high due to Biden's war on fossil fuels is complete nonsense. OIL COMPANY PROFITS
By the end of 2021, four oil companies—"Shell, , Chevron, BP, and Exxon—posted record profits last year totaling $75 billion, while American consumers struggled to pay their heating bills and fill up their gas tanks. The monumental financial haul flies in the face of industry’s “sky is falling” attacks on the Biden administration’s environmental and climate initiatives” (22). Aramco, the world's largest oil company, more than doubled their profits in 2021 (23). Aramco became the world's largest company, larger than Apple. By 2022, the big oil companies had doubled their profits while consumers were paying $5.00 per gallon of gasoline (24, 26, 27). By the first quarter of 2022, EXXON was doubling its profit over the previous year (25). ExxonMobil reported its net profit more than doubled to $5.5 billion from a year earlier. That was even after booking a $3.4 billion charge from exiting its operations in Russia (28). Shell and Chevron reported record profits for the first quarter of 2022 even after taking write-downs for exiting Russia. Record high oil company profits continued in 2023 (29). The oil company executives must have found it hilarious that the public was blaming the Biden government for high gasoline prices.
GAS PRICES
Its not unusual to see Trump supporters posting pictures of low gas prices on the pumps from April of 2020 (30).. They compare those prices to today's prices as if Trump had some brilliant strategy to keep gas prices low. But the reality is that at that time the economy was crashing; millions were unemployed or working from home. At the same time, Trump was actually working hard to cut oil production and increase gas prices (10, 11, 12). Trump raised oil prices on Americans in a deal with Putin and OPEC (31, 31B, 31C, 31D).. But what about before the mismanagement of the COVID crises? Forbes has pointed out that gas was cheaper the two years before Trump than the first 3 years of Trump. And on Trump's 4th year, the prices crashed because the economy was crashing (32). This can be verified by published data (33). Industry experts know that usually presidents don’t have much effect on gasoline prices (34). However, there can be exceptions. Trump was able to create the biggest 1-day price increase in the cost of oil in history (24%) right in the middle of the biggest economic downturn since the Great Depression depression (35). Kicking Americans while they were down was a favor to Russia. By the spring of 2022, gas prices were peaking and Republicans were blaming Democrats, which was another fake news story (36, 36B). But no Democratic policies or actions were driving up gasoline prices. And oil production was record high. The reality was that the American economy was recovering so fast from the mismanagement of the virus that oil production could not keep up with demand. The Russian war against Ukraine caused further disruption in the oil market (37). Since then, American families and businesses are footing the bill for the global rise in gas prices and the ongoing volatility resulting from Putin’s invasion of Ukraine. High fuel costs are compounded expenses included in the manufacture and distribution of all products in America (38). Biden actually took executive action to lower oil prices by selling oil from the strategic reserve (39). He was legally required to sell it to the highest bidder. But the sale had the effect of downward pressure on world oil prices. This has been done several times by previous presidents to put downward pressure on oil prices (31D). But Biden was very much criticized for selling oil from the strategic reserves. Now the Biden administration is buying back oil at a lower price to replace the strategic reserves earning a profit for the government (40). And the Biden administration is continuing to buy back replacement petroleum at a lower price than they sold for (41). The government is continuing to replace the strategic reserves at lower prices (41).
Now Trump is regularly bragging about the low gasoline prices in 2020. He is hoping that most people will not remember how he did it. What was the strategic trick? Over 20 million people are unemployed, the biggest drop in GDP history. After that, Trump was the only person who took direct action to get oil and gas prices up. Now he is continually bragging about that.
Iowa, March 2023: “In fact, I got the oil down so low I had to save the oil companies. How about that one? Remember that little period when you were getting almost free gasoline? We had to save them. We had to call OPEC, and we had to call Russia, frankly, and Saudi Arabia. We said, ‘We have to get the price up.’ But we saved all those companies.”... “What caused inflation? The oil price. The oil. Energy. Energy became so ridiculously expensive, it drove everything up. Now everything is inflated.”
North Carolina, June 2023: “We had the worst, the worst problems and the worst cost of energy in 60 years. We had it down to $1.87 three and a half years ago, a gallon. And we actually had it lower than that, but we won’t even talk about that because I had to save the oil companies that we were all going to go bust. I said this is the first time I’ve ever said we got to get it up a little bit. I actually called Russia and the king of Saudi Arabia.”
Georgia, June 2023: “Gas prices were at $1.87 a gallon. We actually had them lower than that for a little while, but I had to get them up. We were going to lose the oil companies. They were going so low they were getting killed.”
Texas, July 2020: “But we really did—we did a great job. And I want to thank, frankly, Saudi Arabia. I want to thank Russia. I want to thank Mexico. And I want to thank OPEC, as they call it, Plus. It’s called OPEC+.”
DRILL,BABY,DRILL
The former president has pledged to “drill, baby, drill” and to restore America’s “energy dominance.”
The reality is the United States is already dominant. But fuel prices are more determined by OPEC and Russia because the have more excess oil to put on the world market.
Trump is often providing this solution to fix the economy. No one has told him that America is currently producing more oil than any country in the history of the world and significantly more than any trump year. In one campaign speech he promised to expand oil production 8 or 10 times higher. He is completely disconnected from reality outside his own head. He is not the only person unaware of the current oil market production. The Republican candidate for vice president , JD Vance recently said that the solution to climate change is to increase energy production!!! One FOX News episode with Laura Ingraham and Maria Bartiromo echoed the same theme that America needs to drill more oil (43) . Maria Bartiromo has a university degree in economics and she is a professional financial reporter but she does not know that America is currently producing more oil than any country in the history of the world. Media Matters has provided a full review of how disconnected from reality the Fox News staff is on the issue of energy (44). A number of people have pointed out that more drilling for oil is not a good anti inflation policy (45). America had the highest gasoline prices in 2022 when America was already producing record levels of oil. Oil Executives may decide that that they can have better profit margins by not flooding the market with oil. And there is no way the govt can force them to drill more than they want to (46). Oil company executives prioritize profitability over production volume (47). Some oil company executives prefer ‘earn, baby, earn.’”
CORRUPTION
Trump has asked the oil company executives for a 1 billion dollar contribution to his campaign in exchange for favorable regulations and taxation (48,49,50,51) .
Oil company executives are already writing executive orders for trump to sign (52). A lot of people see this as a request for a bribe (53).
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