On Balance: What is causing skyrocketing gas prices

U.S.

CHICAGO (NewsNation Now) — An energy expert tells ‘On Balance’ the skyrocketing gas prices are a preventable crisis and our country is “partially responsible” for the prices at the pump.

Currently, the national average for a gallon is about $3.19.  

The rising prices have the Biden administration so worried they are asking the Organization of the Petroleum Exporting Countries (OPEC) to increase supply and thus hopefully lower the price at the pump. 

OPEC is a group of 15 oil-producing countries, and Russia is a close ally. Saudi Arabia is a main member of the group.

Ellen Wald, a senior fellow at the Atlantic Council’s Global Energy Center and president of Transversal Consulting, says the other countries aren’t solely responsible for the price hike.

“Part of that is due to the fact that America is actually producing less oil now than it was before the pandemic,” Wald said. “So we’re partially responsible for it by not producing so much.”

On his first day in office, President Joe Biden blocked the Keystone XL Pipeline permit. The pipeline was designed to deliver hundreds of thousands of barrels of crude oil every day. Biden canceled it back in January because of climate change concerns.

“It’s not just the Keystone XL pipeline. It’s also a high degree of regulatory uncertainty and the decision by the administration to put a moratorium on all new leases for drilling on federal lands that’s making drillers very hesitant to expand production,” Wald said.

She said the administration’s request to OPEC is “a bit off-kilter” because the Russians and Saudis are increasing production and plan to ramp up more in the coming months.

“Honestly, I think they’re trying to kind of punt or distract from some of the other issues that are causing gasoline prices to rise, like inflation, state policies, more gasoline taxes, their own climate policies that have brought this on the people,” Wald said.

The White House says the rise in prices is no cause for alarm, saying the country is “not at an historically high gas price moment” and that prices are roughly where they were in 2018. Still, Biden acknowledged they’re high enough to “pinch” working families. On Wednesday, the White House also asked the Federal Trade Commission to investigate the domestic gasoline market for any anti-competitive behavior that could be increasing prices.

Kristin Soltis Anderson, an expert in political polling, said the rising prices are beginning to play a role in people’s assessment of Biden’s handling of the economy.

“When you ask people what they’re concerned about in terms of prices going up, gas is top of the list,“ Anderson said. “The Biden administration bet really big on giving out stimulus funds, and putting a lot of money into the economy. And there are many people for whom that stimulus check was really a lifeline. But it’s also true that with all this money out there, people are saying, ‘Okay, well, now I’m seeing prices go up. Maybe all of these moves made in the first six months of the Biden administration had a different effect on the economy than I was hoping for.'”

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A Labor Department report released Wednesday showed that consumer prices jumped 0.5% from June to July, down from the previous monthly increase of 0.9%. They have increased a substantial 5.4% compared with a year earlier, erasing much of the benefit to workers from higher pay.

“If the economy’s not looking good by next fall, that could spell trouble for Democrats in the midterms,” Anderson said.

The Associated Press contributed to this report.

Watch On Balance with Leland Vittert weeknights at 8/7c.

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