Another Surge of Greed in the Biden Era?

Having taken credit for the recent moderation in prices that had little to do with his policies—unless one wants to laud the president for making commodity investors more pessimistic about the global economy—Mr. Biden now especially enjoys one particular excuse as prices head northward.

“As gas prices rise, Democrats scramble to lay blame on Big Oil,” notes a headline in the Washington Post. Big Oil needn’t take it personally. Democrats have also been blaming Little Gas. Last week at a White House event the President said:

To the companies running gas stations and setting those prices at the pump: Bring down the prices you’re charging at the pump to reflect the cost you pay for the product. Do it now. Do it now. Not a month from now — do it now. And it’s going to save people a lot of money.

In the Biden era of inflation, Democrats have also pointed fingers at Big Beef and Big Turkey, among other alleged villains. Of course if the problem really is corporate greed, voters will naturally wonder what it is about the Biden era that supposedly makes people so greedy. Don’t expect an answer from the White House.

For now Team Biden is focused on the short-term politics of gasoline and doesn’t seem overly concerned about the destructive impact of its contemplated political attacks on the energy industry. The Washington Post’s Evan Halper reports:

As prices at the pump trend up nationwide, the Biden administration is scrambling to shelter Democrats from consumer frustration, laying blame on oil company opportunism and threatening new restrictions on the industry.

In public comments and private meetings with oil executives, administration officials are warning that the White House could take extraordinary — and potentially economically risky — steps to bring costs down if the companies do not move more aggressively to shield Americans from price spikes.

The renewed attention on the cost of fuel comes as gas prices have jumped in recent days by as much as 60 cents per gallon in some regions, posing a political challenge for Democrats. A decline in prices that stretched for 99 days helped to improve their prospects in next month’s midterm elections, during which control of Congress and several key governorships is at stake.

There is surely an argument for energy executives to keep their heads down until after Election Day. On the other hand, a misguided president who has spent his entire career in politics can do a lot of damage in a month. On Friday the Journal’s Collin Eaton reported:

Exxon

Mobil Corp. is pushing back against reductions of U.S. fuel exports urged by the Biden administration in August, arguing that restricting shipments would further squeeze global supplies and lift pump prices at home.

Exxon told the Energy Department this week that the oil industry shouldn’t slow fuel shipments in favor of putting more in storage tanks, according to a letter reviewed by The Wall Street Journal. Easing exports wouldn’t fill tanks in the Northeast—a region where U.S. officials said oil companies need to send more supplies—and instead would create a glut in the Gulf Coast that would lead refineries to cut output, according to the letter, which was signed by Exxon Chief Executive

Darren Woods.

Naturally the Energy Department welcomed this valuable background on the gasoline supply chain. Just kidding. Mr. Eaton reports:

On Friday, after publication of the Journal’s story on Exxon’s letter, Energy Secretary

Jennifer Granholm

said U.S. energy companies need to take action to lower prices and refill low inventories of gasoline and diesel…

“These companies need to focus less on taking every last dollar off the table, and more on passing through savings to their customers,” Ms. Granholm said.

Since Team Biden has seized nearly every opportunity to discourage U.S. production of fossil fuels, it’s hard to see where consumer savings can be found. Bashing profit-seeking businesses for seeking profits is just one more incentive the administration is offering to persuade people not to invest in the creation of new U.S. oil supplies. This follows enactment of a $370 billion plan to steer Americans toward other energy sources.

There seems to be a growing split among oil industry analysts between those who think oil prices will rise due to limited production and those who think oil prices will fall because the global economy will struggle and demand will be modest. Neither scenario is looking especially pleasant for consumers.

David Havens of SMBC Nikko thinks oil prices will be lower next year, but he’s not exactly offering a cheerful outlook. He writes in a note to clients this week:

The world is seeing the consequences of the long-term underinvestment in hydrocarbons perpetuated by the misguided energy policies formed around idealistic clean energy initiatives…

At the end of the day, a global recession will perpetuate the long-standing underinvestment in global oil and natural gas supplies, and setup for an extended period of scarcity value in crude oil and natural gas prices once an economic recovery gets traction.

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The Biden War Against Cheap Energy Has Many Fronts
Ben Lieberman of the Competitive Enterprise Institute writes:

Several recent Department of Energy (DOE) efficiency standards for appliances have been a bad deal for consumers, but the latest proposed standard for residential natural gas furnaces is worse than most. As detailed in an October 4 coalition comment signed by CEI and 13 other free market organizations, the rule could deprive millions of homeowners of the best furnace option for them…

Specifically, the proposed new efficiency standard is so stringent that it would all but ban conventional non-condensing furnaces now used in tens of millions of homes in favor of costlier but more efficient condensing furnaces. The difference, in a nutshell, is that a condensing furnace has a second heat exchanger that captures some of the heat that would otherwise go into the exhaust stream and utilizes it, making for a more efficient system. Sounds great—until you learn that doing so makes it more difficult to vent the exhaust. Depending on a home’s age and configuration, using a condensing furnace may be impractical, if not impossible. In some cases, it may be downright unsafe.

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James Freeman is the co-author of “The Cost: Trump, China and American Revival.”

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(Teresa Vozzo helps compile Best of the Web.)