Robert Rapier on Gasoline Prices
I thought I’d publish this piece by senior energy analyst Robert Rapier, and then comment on it.
If you are one of those people still raging about Biden and gasoline prices, then I can put you into one of three categories. You are either 1). A partisan who knows better, but doesn’t care; 2). Someone who prefers simple answers even if they are wrong; or 3). Someone who doesn’t understand the factors that move gasoline prices.
Let’s assume you are in that third category. There is some hope for reaching you with facts. Here they are. Last summer U.S. oil production dropped by 3 million BPD. See the graph below. It was the largest short-term drop in history, and that was on Trump’s watch. It wasn’t his fault, but he also was powerless to prevent it.
Incidentally, it is perhaps a great historical irony that President Obama oversaw the largest oil production gains of any president in history. Again, not because of him. He just happened to be in office when fracking took off.
Since last summer’s plunge, oil production has bounced back by 1.5 million BPD, but we are still 1.5 million BPD below where we were in January 2020. But demand started to recover last summer. The people raging against Biden surely don’t know this: During the last five months that Trump was in office, oil prices increased by 43%. Again, not his fault, but he was also powerless to prevent it.
What we have seen since Biden took office is a continuation of the same trend that started in September 2020. Demand has recovered, and supply has not. When you are missing 1.5 million BPD of oil supplies — which has also played out in many other countries — you are going to have surging prices. There is absolutely nothing a President can do about it. He can scream at the oil companies. He can scream at OPEC. But there is nothing he can practically do to move the needle in the short term when 1.5 million BPD of oil supplies are missing.
First, let me say how much I admire this guy’s writing; don’t you love the closing line?
More importantly, this is a crystal clear exposition of a critical datum: Contrary to what uninformed people believe, the president has virtually no effect on things like gas prices. It’s pitiful to hear Trump supporters say sarcastically, “Thanks, Biden” when prices rise.
Presidents should be judged on the degree to which the policies they create make Americans’ lives healthier, safer, more productive and more pleasant. On top of that, I would throw in the leader’s character. We shouldn’t tolerate presidents who are criminally insane.
Not naming any names here, of course. 🙂
