How Biden could lower gas prices

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Mar 08, 2022 View in browser   By Myah Ward Gas prices are displayed at a Brooklyn gas station in New York City. | Spencer Platt/Getty Images PRIMING THE PUMP — Oil prices hit a record high today, and President Joe Biden said they're going to keep going up. Biden acknowledged his new Russian energy ban, which a large majority of Americans support, will mean higher gas prices in the U.S. Americans are already paying an average of $4.17 per gallon nationwide, the highest — before factoring in inflation — since 2008. Economists, to be fair, wouldn't call that a record. Taking inflation into account, gas prices were 32 percent higher in 2008, Justin Wolfers of the University of Michigan pointed out on Twitter today. Still, prices have gone up a lot in a short amount of time, and the Biden administration has tried to lower them, without success. "Can't do much right now," Biden told reporters today. "Russia is responsible." The administration, along with 30 other countries, did announce plans last week to release 60 million barrels of oil from strategic petroleum reserves. What else could Biden do to ease high prices at the pump? Nightly asked energy and economic policy experts for their ideas. "There are no quick fixes to our sky-high gasoline prices. They could get even higher if Russia or Europe decide to cut off their ongoing oil trade, in which case it would be appropriate to release oil from the United States' strategic reserve for some temporary relief. "To ensure lower energy prices in the medium term and our energy security in the long-term, the best solution is recommitting to domestic oil and gas production. We can ask Venezuela and Iran for more oil, but relying on oil from these countries will always leave us at the whims of their repressive political systems. "We should also increase our production of alternative energy, but further oil and gas production is the most realistic route to energy security. The U.S. is the world's No. 1 producer of both oil and gas; it's not even in the top 10 for key clean energy minerals such as cobalt, graphite, and lithium. Even if we are prepared for a dramatic expansion of mining on public lands, it will take decades for the United States to establish the secure supply chains we take for granted in oil and gas." — James Coleman, energy policy expert and senior fellow at the American Enterprise Institute "Strong economic recovery coupled with low investment in oil production were hugely exacerbated by the Russian invasion in Ukraine. This sent the oil price to stratospheric levels, which are being passed over to consumers at the pump. " In the short term, the administration can decrease or suspend federal taxes on gasoline and diesel that are 18.4 and 24.4 cents per gallon respectively. It could also work with state governments to do the same. State taxes average 30.63 and 32.29 cents per gallon, hence combined gains could amount to $0.50 per gallon. "Another option would include releasing more from strategic reserves to the market. However, as recent and previous actions show, this would have only a short-lived and limited impact on prices. What is released today will need to be replenished in the near future. "In the longer term, a more supportive approach to increasing domestic and international production would help. But most importantly, I believe that the key to the energy transition is in our — consumers — hands. The biggest shift will need to happen on this side of the equation." — Maciej Kolaczkowski, manager, oil and gas industry at the World Economic Forum "The Biden administration's move to halt U.S. imports of Russian oil is the most important action it could take. It will raise gas prices in the short-run but it will be worth it for the large benefits it will create for geopolitical order. Some but not all of the price pressure this will cause could be alleviated by working with countries around the world to expand production and continued releases from the strategic petroleum reserve. But mostly, for better or worse, Americans need to understand that this is the price we all pay for a safer world." — Jason Furman, economic policy professor at Harvard and chair of the Council of Economic Advisers under President Barack Obama from 2013 to 2017 "The president should immediately rescind his policies to block the Keystone XL pipeline, and let the market decide. He should also cease anti-oil and gas stances and let markets decide. That won't help much now, but in the long run it will reverse his damaging decisions. And the nation should support growing our energy independence, to help offset future situations like this. Allow the oil and gas sector to grow, while also offering Americans incentives to move away from fossil fuels at their own pace, not at a forced pace set by the president. "The president should also issue Reid vapor pressure waivers, allowing winter gasoline to be sold throughout the year instead of just summer fuel. The fragmentation of summer fuels is a key ingredient in why U.S. gasoline prices always rise in the spring, and can lead to hotspots in gas prices all summer. "In addition, educate and encourage Americans to use mass transit through discount programs and subsidies. Consider reducing speed limits by 5 mph or cap them to 65 mph temporarily. Ask companies to allow workers to continue working from home where possible, limiting the rise in demand from commutes. Push states that have percentage-based gas taxes to cap them temporarily." — Patrick De Haan, head of petroleum analysis at GasBuddy  "The cupboard is mostly bare when it comes to the Biden administration's options for lowering gas prices in the near term. Suspending the federal gas tax would leave a small dent in prices at the pump but a potentially huge dent in Biden's plans to expand and upgrade transportation infrastructure: that money goes into a federal trust that helps maintain our highways. Plus, many state governments — red and blue alike — have gas taxes that are even higher, and there's no mechanism for coordinating their responses. Releasing oil from the strategic petroleum reserve hasn't moved the needle much so far, and geopolitically uncertain times are not necessarily the best times to be drawing down strategic resources. Hiking the federal funds rate — especially beyond already anticipated increases — might help tame commodity markets, but that's not Biden's call to make and would come with its own problems. "For decades, the American people have been told energy independence (which we're close to now) would insulate us from the vagaries of global markets and geopolitics. This is and always has been a myth. Our current moment puts the lie to that myth in dramatic fashion." — Cullen Hendrix, senior fellow at the Peterson Institute for International Economics Welcome to POLITICO Nightly. Reach out with news, tips and ideas at nightly@politico.com. Or contact tonight's author at mward@politico.com, or on Twitter at @MyahWard.   SUBSCRIBE TO NATIONAL SECURITY DAILY : Keep up with the latest critical developments from Ukraine and across Europe in our daily newsletter, National Security Daily. The Russian invasion of Ukraine could disrupt the established world order and result in a refugee crisis, increased cyberattacks, rising energy costs and additional disruption to global supply chains. Go inside the top national security and foreign-policymaking shops for insight on the global threats faced by the U.S. and its allies and what actions world leaders are taking to address them. Subscribe today.     What'd I Miss? — U.S. stunned by Polish jet offer: The Polish government stunned Washington by announcing it was ready to transfer its 28 MiG-29 fighter planes to the U.S., with the understanding that they would be handed over to Ukrainian pilots fighting off the Russian invasion . The move, which came with a request that the U.S. supply Poland with used jets with "corresponding capabilities," came after a week of back-and-forth negotiations between Washington and Warsaw over transferring the jets to Ukraine, which needs replacement jets to fight off the Russians. A statement by Defense Department spokesperson John Kirby reflected that deep concern late today, saying "we do not believe Poland's proposal is a tenable one," and it is "simply not clear to us that there is a substantive rationale for it." — Davos freezes out Putin and Russian oligarchs: The World Economic Forum has put on ice its relationships with Russia, including strategic partnerships with conglomerates run by oligarchs . A Kremlin-backed research center in Moscow and an advisory council led by Russian President Vladimir Putin's economic adviser have also been torpedoed. "We are not engaging with any sanctioned individual and have frozen all relations with Russian entities," Amanda Russo, a WEF spokesperson, told POLITICO. — Florida approves controversial 'Don't Say Gay' law: The Republican-controlled Florida Legislature handed Gov. Ron DeSantis a major win ahead of the 2022 midterm elections, approving a controversial measure dubbed "Don't Say Gay" by opponents that bars educators from discussing sexual orientation with young students . Republicans pushed the legislation for months, claiming it strengthens parental rights in Florida by preventing teachers and school staffers from withholding critical information from parents. DeSantis, who has defended the measure publicly, frequently accused the media and others of misconstruing the true intent of the bill to stoke tensions. At one point, his press secretary called opponents of the measure "groomers." — Trudeau announces 'multi-year' renewal of Canada's mission on NATO's eastern flank: Prime Minister Justin Trudeau says Canada is extending its NATO military mission in central and eastern Europe for several more years as part of his government's response to Russia's invasion of Ukraine . "The troops here are not only defending Latvia or eastern Europe, they're defending all NATO allies, including Canada," Trudeau told an outdoor press conference at Latvia's Ādaži Military Base, which provided a backdrop of soldiers and military vehicles. "They're defending our freedom and our security. That's why this work is so important, especially in the face of continued Russian aggression." The Internal Revenue Service building. | Zach Gibson/Getty Images — IRS' tax season woes rooted in pandemic, long funding slide: Millions of taxpayers are still awaiting refunds from last year, part of a paperwork pileup the agency is struggling to get a handle on . Veteran IRS workers have been reassigned to mail duty and the agency is about to go on a hiring binge to reduce the backlog. Taxpayers caught up in the bureaucratic mess have faced roadblocks for mortgage applications and other types of consumer borrowing like car and college loans, tax preparers say, because lenders often require borrowers to submit their latest tax returns to prove their incomes and job status. — Proud Boys leader indicted for conspiracy related to Jan. 6 attack: A grand jury indictment charges Enrique Tarrio with conspiracy to obstruct Congress . Prosecutors have already leveled conspiracy charges against four Proud Boys leaders — Ethan Nordean, Joseph Biggs, Charles Donohoe and Zachary Rehl — who the Justice Department says played a central role in fomenting the breach of the Capitol. In addition to Tarrio, prosecutors added another Proud Boy to the conspiracy indictment: Dominic Pezzola, who breached the Capitol when he shattered a Senate-wing window with a riot shield — Texas militia member convicted on all charges in first Jan. 6 trial: Guy Reffitt, a Texas militia member who was at the head of an early wave of rioters who stormed the Capitol on Jan. 6, 2021, was found guilty of all five felony charges he faced related to the assault, including obstruction of an official proceeding , carrying a firearm during the attack and threatening witnesses. The verdicts are an important milestone for the Justice Department in the first jury trial since the attack that threatened the presidential transfer of power more than 14 months ago.   DON'T MISS POLITICO'S INAUGURAL HEALTH CARE SUMMIT ON 3/31: Join POLITICO for a discussion with health care providers, policymakers, federal regulators, patient representatives, and industry leaders to better understand the latest policy and industry solutions in place as we enter year three of the pandemic. Panelists will discuss the latest proposals to overcome long-standing health care challenges in the U.S., such as expanding access to care, affordability, and prescription drug prices. REGISTER HERE.     Nightly Number $15.6 billion The amount Congress is planning to give the Biden administration to continue the fight against Covid-19, less than half of what federal agencies originally said would be needed. Top Democratic and Republican lawmakers say the 2022 spending bill they aim to pass this week to avoid a government shutdown includes $10.6 billion for domestic efforts such as testing, therapeutics and vaccinations, and $5 billion for global pandemic efforts. Parting Words People walking along "White Bridge" in Vilnius, Lithuania. | Paulius Peleckis/Getty Images 'WE TOLD YOU SO' — For years, Western Europeans have been dismissive of politicians from Poland and the Baltic countries whenever they sounded the alarm over the expansionist threat posed by Russian President Vladimir Putin. They now realize they should have listened to countries with a far deeper knowledge of the Kremlin and a bitter historical memory of the violence that Moscow is willing to unleash to pursue its goals, Stuart Lau writes. Instead, the Westerners followed a path of commercial and political appeasement of Putin, led by German Chancellor Angela Merkel, which has now spectacularly backfired with the invasion of Ukraine, the bombardment of its cities and mass emigration. "The Western Europeans pooh-poohed and patronized us for these last 30 years," said Radosław Sikorski, a former Polish foreign minister. "For years [they] were patronizing us about our attitude: 'Oh, you know, you over-nervous, over-sensitive Central Europeans are prejudiced against Russia.'" The Easterners say they ran into a brick wall when they made pleas for increased NATO deployments, drew attention to cyberattacks and called on Germany not to let the EU be held hostage by giant pipelines pumping gas straight into Germany. The outspoken, pugnacious Sikorski, then defense minister, triggered outrage in thin-skinned diplomatic circles in 2006 when he dared compare the Russia-to-Germany Nord Stream gas pipeline project, which bypassed Poland, to the Molotov-Ribbentrop pact of 1939 that divided Poland between the Nazis and Soviets. Polish and Baltic leaders saw Russia's invasion of Crimea in 2014 as a defining threshold that signaled that Putin needed to be stopped with a genuine show of force from the West, or otherwise he would go on to attack more targets. In fruitless meetings in Brussels, however, Polish and Baltic diplomats found that most of the European Union was reluctant to impose heavy sanctions on Moscow despite its invasion of an EU ally. The furious anti-Putin camp dubbed the Italian-led opposition to sanctions as the "Club Med" grouping. Did someone forward this email to you? Sign up here.   Follow us on Twitter Chris Suellentrop @suellentrop Tyler Weyant @tweyant Renuka Rayasam @renurayasam Myah Ward @myahward   Follow us

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