Gassed

Gas prices are out of control, so Biden asked the FTC to investigate oil giants’ pricing

Thursday, November 18, 2021 by Robinhood Snacks | Disclosures

Extreme pump anxiety... US gas prices are up more than 60% from a year ago, hitting seven-year highs. California just hit a state record of $4.68/gallon. President Biden wants to understand why: Yesterday he sent a letter to Federal Trade Commission Chair Lina Khan, calling on the FTC to look into "whether illegal conduct is costing families at the pump."

  • Biden alleges there's “evidence of anti-consumer behavior by oil-and-gas companies,” saying gas prices are rising while the price of “unfinished” gas (aka gas that hasn’t yet been blended with other liquids to use in vehicles) drops.
  • Biden underscored that the two largest gas companiesExxon and Chevron — are on track to nearly double their profits from 2019.

Oh, PEC... Oil prices plunged last year when travel and manufacturing halted. So OPEC, the powerhouse org of oil-exporting countries, slashed production. This year, oil demand rebounded quickly as the economy revved up. That's led to an oil shortage, which is aggravating supply issues and soaring prices. BTW: Higher gas prices will hurt low-income families the most this winter.

  • Biden has asked OPEC to increase oil production to ease shortages and keep prices in check — so far, OPEC has said "no, thanks."
  • The American Petroleum Institute, an industry group, said that instead of investigating tightly regulated markets and “pleading with OPEC,” the US should encourage “responsible” development of American-made oil/gas.
THE TAKEAWAY

Despite the green wave, oil is still king... Renewable energy gets the royal treatment, but the world still runs on oil and gas — from transporting food to heating and electrifying homes. Sixty percent of US electricity is generated from fossil fuels, versus 20% from renewables. And EVs account for just 2% of the US’s new-car market. That's why even Biden, who’s put clean energy at the forefront of his spending plans, has asked to boost oil production.