World market sets oil price, but Sullivan claims Biden's to blame for high prices
Sen. Dan Sullivan complained about paying $109 for 23 gallons of gas for his pickup truck in Anchorage. It would have cost him $142 had the tank been empty.
He went back to Washington, D.C. for a GOP senatorial whine event at which he displayed a photo taken at an Anchorage Holiday gas station.
He appeared almost gleeful that somebody had put a picture of Joe Biden pointing at the price indicator with the words “I did that.”
Sullivan was apparently unaware that anonymous schlubs have been putting these stickers on gas pumps for months.
“Nobody’s being fooled,” Sullivan said, claiming that Biden deserves all of the blame for higher prices.
“Nobody’s being fooled. This is what literally was on the pump in my home state. ‘Joe Biden, I did that.’ “I did that.’ Nobody’s being fooled. This isn’t Putin. This is Biden. He did that.”
All that’s missing from the Anchorage gas pump is a Sullivan sticker that has him pointing at the price along with Biden and saying, “I don’t know what I’m talking about.”
The notion that Putin has nothing to do with the spike in oil prices that followed the attack on Ukraine and the removal of Russian oil from world markets is complete nonsense.
On the other hand, so is the notion that this is entirely the work of greedy oil companies screwing customers and making record profits. The turmoil created by the pandemic, the aftermath of the collapse in oil prices two years ago and the war in Ukraine are major factors.
With state and federal elections this year, Republicans see gas prices as an easy weapon to use against Democrats. Sullivan is following that playbook.
He is also repeating the falsehood that Alaska could somehow have much greater production and lower prices if only Biden was not in the way. All Alaska projects are multi-year enterprises that can’t possibly make a difference right now.
World oil prices are not set by the White House or by Congress or even by the oil companies, though decisions about investment levels and dividends paid by the companies will determine future production levels.
Federal policies have an impact on the amount of oil production, but the demand by investors for companies to produce higher returns has a far more direct bearing on the immediate future.
Prices rise and fall all the time. Companies that were burned two years ago during the short period when oil was nearly worthless are not pursuing more production at any cost.
Add to this the uncertainty of climate change, customer preferences for cheap fuel and the desire of companies to hope to still be in business 20 or 30 years from now and the problem is an enormous puzzle.
Biden and the Democrats want to reduce fossil fuel consumption to limit the damage from rising temperatures. Many Americans support this vision as long as they don’t have to pay more for gasoline or buy smaller vehicles.
But even oil industry officials see the need for a long-term move away from fossil fuels.
The notion that there will be a seamless and painless transition to alternative energy supplies is absurd. Sullivan and others who see no need for a reduction in fossil fuel burning don’t bother themselves with that challenge at all, ignoring anything beyond the next election.
The New York Times reporting on a House hearing about rising gas prices included some salient observations from oil industry officials.
“Because oil is a global commodity, Shell does not set or control the price of crude oil,” Gretchen Watkins, the president of Shell USA, told the committee in prepared remarks. “Today’s crisis and the pressure on hydrocarbon supplies and prices reveal the urgent need to accelerate the energy transition.”
The Times also provided this clear description of the dilemma: “In reality, the loosening of pandemic restrictions has increased demand for gas when supply is not rising quickly enough. Both supply and demand are being driven by factors that are out of the control of Mr. Biden and Congress.”
Sullivan insists on oversimplifying a complex situation, made all the more difficult by the contradictions between short-term energy demands that can’t be changed without cost and controversy and the long-term need to reduce carbon emissions to curb rising global temperatures.
That won’t fit on a sticker on the gas pump.