There actually is a way Biden can ease gas prices today without encouraging higher fossil-fuel consumption tomorrow, explains EricLevitz
The prices at a gas station in Los Angeles last week. Photo: David Crane/MediaNews Group/Los Angeles Daily News via Getty Images Economic warfare is expensive. For weeks now, the West has been trying to thwart Russia’s war of conquest in Ukraine by debasing its currency and banning its exports. This is having its intended effect on the Russian economy. But American consumers of wheat, industrial metals, Matryoshka Dolls, and, above all, energy, have ended up as collateral damage.
If Biden is fighting a crusade against fossil-fuel extraction, he’s losing it. As Matt Yglesias notes, the United States has produced more barrels of oil a day under Biden’s leadership than it did under Trump’s. Now, as boom times return to the U.S. energy sector, those investors want to be made whole. Thus, they’ve forced firms to prioritize shareholder dividends over expanded production. After all, the war in Russia could end tomorrow and they could lose money on expanding drilling all over again.
What Biden needs is some energy policy that threads the needle between these two challenges, easing gas prices today without encouraging higher fossil-fuel consumption tomorrow. Ideally, this policy would also be enforceable through creative interpretations of existing law, since Biden can hardly trust our fractious Congress to move quickly.
To further reassure anxious shale shareholders, Employ America’s proposal advises the government to use the Treasury Department’s Exchange Stabilization Fund to reduce shale drillers’ borrowing costs. Under existing law, the ESF has the authority to purchase “instruments of credit and securities the Secretary considers necessary.” In this case, it could purchase credit and securities tied to the drilling of new oil wells.
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