The effort might be just another distraction. This bill to crack down on what the Democrats call price gouging is open to interpretation. Oil is a commodity, the prices are set in the global market. Studies have been done for years that show the prices are based on market factors. The supply chain problem hasn’t gone away, Russia is still invading Ukraine and we’ve banned Russian oil imports.
Oil prices soaring
House Democrats narrowly approved a bill that would give President Biden emergency authority to punish oil and gas companies for alleged price gouging. The FTC would be allowed to take action.
Kim Schrier, Washington Democrat, co-sponsored the bill, “At a time when people across the country are feeling the pinch at the gas pump, Congress needs to be doing all it can to bring down costs for American families.” She was infuriated that the gouging was “happening at the same time that gas and oil companies are making record profits and taking advantage of international crises to make a profit. This must stop.″
This oil bill may not pass
It was approved 217-207 but the odds aren’t as good in the 50/50 Senate. The average gas price recently was $4.59 a gallon. It’s going up fast too. It was .49 higher than just last month and $1.55 higher than a year ago according to AAA.
Democrats tried to make the oil and gas companies look bad by harping about their profits, over $40 billion. California Democrat Katie Porter is another co-sponsor, “Big Oil is price gouging families because they can. Enough is enough.”
There are several reasons for the increase
Supply chain effects everything and that’s still going on. Russia’s Ukraine invasion and a ban on Russian imports are a couple more reasons. Of course, the Biden administration’s policies are no help.
Biden is trying to do what he can to help so he ordered for a huge release of oil from the nation’s reserve. Republicans maintain the ease at which this whole mess could be solved: just increase oil production here.
Distract and shift blame
Louisiana Republican Steve Scalise said there’s no need for this. It’s being done “to distract and shift blame from the administration’s self-inflicted energy and inflation crisis.” It’s “a socialist price-fixing scheme that hurts small businesses and consumers the most.” The wording is ambiguous, giving the FTC “wide-ranging powers based on undefined parameters that will allow it to usurp market forces and set government-controlled gasoline prices.”
The CEO of the American Exploration and Production Council Anne Bradbury said this is nonsense. The FTC has conducted investigations over the years to prove price fluctuations aren’t illegal, it’s part of the market.
Oil between a rock and a hard place
The Biden administration needs to increase oil production because people still need it. At the same time, environmentalist groups say he’s not doing enough to combat climate change. The efforts are stalled out in a Congress that hears from their constituents that still need fuel.
The West Virginia Democrat Joe Manchin said that “even as we see Russia wage a war enabled by energy insecurity in Europe, this administration has made its opposition to domestic oil and gas production crystal clear.” A pause on new leases for drilling was announced 16 months ago. The “pause” has become a ban.
Eight states had been scheduled for lease sales next month but officials scaled back the amount of land offered. Plus a huge royalty rate of 50% will now be charged to those energy companies.