The price of gasoline occupies a unique place in the political and economic life of the country. No other product has its price advertised in gigantic signs on so many street corners.
And though the president has almost no control over what that price is, any time it goes up the opposition party is quick to 1) blame the president for the increase, and 2) demand that he do something about it.
What can a president do? He can urge OPEC countries to increase production, but not only will that make him look like a supplicant, it’s unlikely to work.
But President Joe Biden, knowing that currently elevated prices have people upset — and that we can’t help comparing those prices to what they were last year, when lockdowns sent demand for gas, and therefore prices, plummeting — is taking action.
After instructing the Federal Trade Commission to investigate whether oil companies are gouging consumers, Biden has now directed the Department of Energy to release 50 million barrels of oil from the Strategic Petroleum Reserve, in an effort to boost the supply of oil and put downward pressure on prices.
This is probably the only thing he can really do — in that it will make him look active, powerful and engaged — but it will probably have only a small effect.
That’s the consensus among analysts on what will happen if that much oil is put into the market, given that in the U.S. we consume about 19 million barrels a day. But the logic here seems to be the following: Everyone says the administration should do something about oil prices. Well, this is something.
The SPR was established after the oil shock of the early 1970s, to make sure the country could have oil in the case of a national emergency — war, natural disaster, or another attempt by OPEC to strangle world supply. And from time to time, presidents have used the SPR to make a point.
George H.W. Bush ordered a release of 34 million barrels during the first Gulf War in 1991, and prices did drop. During the 2000 presidential campaign, Al Gore urged President Bill Clinton to order a release during a spike in prices. Everyone, including Republican nominee George W. Bush, accused Gore of being a cynical phony just trying to pander to voters, but Clinton took the advice and released 30 million barrels; prices dropped for a bit, then returned to nearly where they had been before.
Then after Sept. 11, Bush ordered the reserve to be expanded, to show that we weren’t going to be at the mercy of a bunch of foreigners with Arabic names. He later released 11 million barrels after Hurricane Katrina in 2005, and President Barack Obama released 30 million barrels in 2011 to counter supply disruptions from Libya. So Biden is hardly the first president to make use of the SPR for what looks like political purposes, at least in part.
Naturally, Republicans are contemptuous of his action and want everyone to know that every extra penny you pay at the pump is 100% Biden’s fault. “Begging OPEC and Russia to increase production and now using the Strategic Petroleum Reserve are desperate attempts to address a Biden-caused disaster,” said Sen. Jon Barrasso, R-Wy.
That is, of course, ludicrous. Biden is about as responsible for the price of gas right now as he is for the weather — unless you want to argue that production hasn’t caught up to demand because Biden has been so successful getting the economy humming. Which I doubt Republicans will be saying.
But over the long term, one of the best ways to reduce the price of gas is to get as many people as possible to switch to electric and hybrid cars, which the Build Back Better bill tries to do with generous tax incentives for the purchase of those cars. The recently signed infrastructure bill also funds charging stations, electric school buses and battery research.
Which over the longer term means many more people who won’t have to care about gas prices at all, and those still driving standard internal-combustion cars should wind up paying less as demand falls.
But of course, Republicans aren’t going to applaud those measures either. And in the short term, Biden isn’t saying they’re a solution to high gas prices. He knows that the public has a short attention span, and they want something that resembles action right now. So the SPR it is.
Sooner or later, gas prices should come down. When they do, Biden would be smart to remind everyone of what he’s doing now, whether it made a difference or not. If he’s going to get blamed when things are bad, he might as well take credit when they go well.