"It’s tempting to believe high prices are all about price gouging. But the reality is far wilder."
"With every new inflation report, the Biden administration seems to get even more laser-focused on a single goal: making gas cheaper. Its strategy so far has been a little baffling, though—as is its explanation for why prices are high.
Sometimes the White House blames “Putin’s Price Hike,” pointing to the massive supply chain disruptions caused by Russia’s invasion of Ukraine and ensuing international sanctions. The White House and top Democrats have also accused Big Oil of price gouging and blamed it for not producing more, even trying to rally congressional support behind a fine on companies for not drilling on their unused leases. Or is it Wall Street’s fault for wanting to keep companies from going on another spending binge, as state department special envoy and co-ordinator for international affairs Amos Hochstein has said? As the Biden administration desperately attempts to do something ahead of midterms, federal agencies have been even more generous than usual with new permits, giveaways, and regulatory rollbacks for drillers.
One obvious casualty of all this is the climate crisis, which seems to slip further down the list of national priorities by the hour. Needless to say, trying to keep gas prices low and boost production by any means necessary is probably not the right answer, here. But what is?
Answering that requires understanding what gas prices actually are and what policymakers can do to influence them.
A century ago, these questions were a little simpler to answer. Gargantuan U.S. and U.K. producers (the “Seven Sisters”) used to be vertically integrated, overseeing everything from extraction to transportation to refining and sales. That means the company that dug up oil was probably the same one you bought it from at the gas station."
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