Congressional Republicans Attack Biden On Rising Gas Prices

As gasoline prices in the United States have increased to more than $4.00 per gallon, Republicans in Congress have increased the intensity and frequency of their attacks on the administration, blaming the high prices almost entirely on what they describe as President Biden’s "anti-American energy policies." Members of the Oklahoma delegation have been particularly vocal, given the state’s standing as one of the country’s top oil and gas producers.

Gasoline prices were already, on average, well over $3.00 a gallon when Russia, the world’s 2nd largest oil exporter, invaded Ukraine last month, throwing the global market into turmoil and pushing prices even higher. President Biden’s decision earlier this week to ban all imports of Russian crude and refined products, while welcomed by Republicans, nudged prices higher still, into the record territory where they currently sit.

Congresswoman Stephanie Bice (R-OK5) acknowledged the conflict in Ukraine has played a role.

“But the root cause of high energy and gas prices is due to the anti-energy policies of the Biden administration,” Bice said in a floor speech Wednesday.

“The price of gasoline, just in the last 13 months, has gone up over a dollar a gallon,” said Sen. James Lankford (R-OK) on the Senate floor Thursday. "That wasn’t because of Russia and Ukraine, that was directly because of policies that are in the Biden administration.”

But some who work in the oil and gas industry say these claims are, at best, an oversimplification of what’s happened and, at worst, simply not true.

“There are other factors that are at work,” said Walt Duncan, an Oklahoma City oil and gas executive in a Zoom interview Friday.

Duncan is president of Oklahoma City-based Duncan Oil Properties and has been a director on the Oklahoma City branch of the Kansas City Federal Reserve since 2019, providing the Fed with analysis and insight on the energy industry. He said Biden’s policies, while not necessarily friendly to his industry, are also not significantly responsible for depressing production.

“In my opinion,” said Duncan, “they really have not—in the short term, they have not had a huge impact on current production.”

The two policies that Biden critics point to primarily are his decision, on day one of his presidency, to stop construction on the Keystone XL pipeline and then to pause the approval of new drilling permits on federal land.

Duncan disagrees with the decision on the pipeline but said neither that nor the federal drilling permits are what’s responsible for supply being unable to keep pace with demand right now. What is playing a major role, however, is Wall Street.

“Essentially, the capital markets are just no longer friendly to the oil and gas business,” explained Duncan.

He said this new attitude became apparent years before Biden took office and is rooted in ROI – return on investment.

“Over the last decade, our industry has not operated profitably,” said Duncan. “If you look at returns on assets, they have been in the low single digit and so thus we’ve seen many, many companies having to restructure their debt, go bankrupt.

Without eager investors to pump money into operations, Duncan said companies were being forced to live out of their own cash flow. They became more risk-averse and production goals were pared back.

With crude oil trading above $100 a barrel and the nation clamoring for more domestic oil, Duncan said there are supply issues making it very difficult to ramp up production.

“Pipe, casing is very hard to find, it’s very expensive,” Duncan stated. “There are probably assets that we could put to work in the way of rigs and that sort of thing, but there are simply no people to run them.”

Duncan said, over the long term, he can see Biden’s policies leading to higher energy prices. However, he said, at the moment, this is really just traditional supply-and-demand economics at work, with a war throwing it all into added turmoil.