As pressure mounts on Joe Biden and his administration over inflation, including higher prices at the gas pump, the president has asked the Federal Trade Commission (FTC) to investigate potentially “illegal conduct” by the oil and gas industry — and that industry is pushing back.
“This is a distraction from the fundamental market shift that is taking place and the ill-advised government decisions that are exacerbating this challenging situation,” Frank Macchiarola, senior vice president for policy, economics and regulatory affairs at the American Petroleum Institute, said in a statement, adding:
Demand has returned as the economy comes back and is outpacing supply. Further impacting the imbalance is the continued decision from the administration to restrict access to America’s energy supply and cancel important infrastructure projects.
Rather than launching investigations on markets that are regulated and closely monitored on a daily basis or pleading with OPEC to increase supply, we should be encouraging the safe and responsible development of American-made oil and natural gas.
API is the trade organization for the U.S. natural gas industry, which supports more than 11 million jobs in the domestic energy sector, according to its website.
Newsweek reported on Biden blaming the private sector for inflation, including the oil and gas industry:
Decreased drilling during the pandemic paired with a more recent surge in economic activity resulted in the world’s oil reserves falling to their lowest since early 2015, the Wall Street Journal reported. However, the International Energy Agency said on Tuesday that this issue could soon ease as oil output is expected to rise by 1.5 million barrels a day for the rest of the year.
Biden remains focused on bolstering America’s green economy through his infrastructure and social safety net bills. These investments come alongside the cancellation of pipeline projects, like the Keystone XL.
The Hill also reported on Biden’s letter to the FTC:
President Joe Biden is asking the head of the Federal Trade Commission (FTC) to look into whether oil companies are illegally increasing prices as consumers face high costs at the pump. “The Federal Trade Commission has authority to consider whether illegal conduct is costing families at the pump. I believe you should do so immediately,” Biden wrote in a letter to FTC Chairwoman Lina Khan on Wednesday.
“Prices at the pump have continued to rise, even as refined fuel costs go down and industry profits go up,” he added. “In the last month, the price of unfinished gasoline is down more than 5 percent while gas prices at the pump are up 3 percent in that same period. This unexplained large gap between the price of unfinished gasoline and the average price at the pump is well above the pre-pandemic average.”
Biden said that oil and gas companies in the U.S. are generating significant profits from the higher cost of energy, noting that two of the largest oil and gas companies in the U.S. are on track to nearly double their net income over 2019.
Gas prices rose 6.1 percent in last month, according to the Labor Department, with prices about 24 percent higher than they were during the same month in 2019.
“Khan agreed to undertake that investigation, saying regulators will look into whether there are any ‘collusive’ or otherwise illegal practices impacting gas prices,” the Hill reported.
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