Gasoline prices are surging. Can Biden actually do something about it?
Presidents don't set the gas price you pay at the pump, but they're often blamed for it. And right now, high energy prices are helping send inflation to an over 30-year high.
DANIELLE KURTZLEBEN, HOST:
Gas prices, home heating bills - energy of all kinds is getting more expensive. President Biden is promising to do something about it. Here's Energy Secretary Jennifer Granholm on "PBS NewsHour" on Monday.
(SOUNDBITE OF TV SHOW, "PBS NEWSHOUR")
JENNIFER GRANHOLM: The president is all over this. He's looking at whatever short-term tools he has to be able to relieve the pain that people may be feeling at the pump.
KURTZLEBEN: But what exactly are those tools? NPR's Camila Domonoske joins us now to discuss. Good morning, Camila.
CAMILA DOMONOSKE, BYLINE: Hi, Danielle.
KURTZLEBEN: The average price of a gallon of gasoline is around $3.40, Camila, which is the highest it's been in seven years. So how big of a problem is that for the Biden administration?
DOMONOSKE: It's a big problem. You know, just last week, we had data showing a surge in inflation, which was mostly driven by energy prices. Inflation is one of the country's biggest economic challenges right now, so obviously this is a huge concern for the White House.
And it's also a perception issue. Presidents don't set gas prices, but they're usually blamed for them. And, yeah, a lot of people are blaming Biden for these prices we're seeing right now, even though he didn't cause them.
KURTZLEBEN: OK, so if Joe Biden didn't set these prices, why are gas prices so high right now?
DOMONOSKE: Well, oil demand crashed back at the very beginning of the pandemic. We all stopped driving. We stopped flying. And that meant that oil production had to go down really quickly, too. Now demand has come back, and production just hasn't kept up. It's kind of like if supply and demand were on a seesaw. And normally both sides are making tiny adjustments to try to stay wobbling somewhere around level, right? But then demand completely fell off, and the seesaw crashed to one side. The supply side had to jump off, too. Now they're trying to rebalance the seesaw, but it's just really hard with everybody climbing back on.
And it's oil companies, or countries like Saudi Arabia that control their oil industry, that are actually deciding who jumps on that seesaw when. The White House isn't making those decisions.
KURTZLEBEN: OK. Well, in that case, what actions could President Biden take that would actually have some impact on these prices?
DOMONOSKE: Well, he could ask Saudi Arabia and OPEC to pump more oil. They have the ability to actually just order more oil production, which he doesn't. But he already tried that, and the answer was no.
So then there's possibilities like he could release oil from the Strategic Petroleum Reserve. This is meant for emergencies like natural disasters, and it would have a short-term effect. It's kind of like drawing on your savings to pay your monthly bills. It doesn't actually fix the underlying problem, right?
There's other options, like banning U.S. crude exports. That would be a huge disruption to the industry, and it might not actually help gasoline prices at all. There's also - you could pick a fight with OPEC. Some lawmakers want to sue OPEC members for collusion. That could backfire. It could actually make markets more volatile.
You know, Kevin Book, the managing director of ClearView Energy - he says this is a challenge for every president. They always want to push gas prices down, but that's basically their list of options.
KEVIN BOOK: And the problem is you want at least one of those options on the list to be good, and none of them are good. There's only less bad.
DOMONOSKE: He says the least bad option is probably drawing on the reserve, even if it doesn't do very much.
KURTZLEBEN: OK, but let's zoom out here, because this conversation is happening in the wake of a huge U.N. summit on climate change. Doesn't Joe Biden want Americans to use less oil, not more, anyway?
DOMONOSKE: Yeah, this is a huge tension in global energy markets right now. Long term, leaders are calling for production to go down for the sake of the climate. But right now, everyone wants more oil.
You know, from an economic point of view, high oil prices actually encourage people to cut their oil consumption, right? Maybe you're more likely to buy an electric vehicle. But politically, it's an absolute nightmare. So countries are trying to balance this - wanting less oil long term, but more in the short term. And for now, it does look like oil production is still going up, which means prices should go down. A U.S. agency just predicted that prices will be easing sometime next year.
KURTZLEBEN: All right. NPR's Camila Domonoske. Camila, thank you so much.
DOMONOSKE: Thank you. Transcript provided by NPR, Copyright NPR.