Gas prices are always a contentious political issue. After a massive drop in prices during 2020, prices rebounded and eventually exceeded the most recent high by mid-2021. Gas prices throughout the United States remain far above the highs of mid-2018, and consumers are not happy about it.
That’s probably why Sean Hannity decided to have economics professor Austan Goolsbee on his show last week. Obviously, Hannity wanted to lay the blame for high gas prices on President Joe Biden, but Goolsbee, ever the defender of neoliberal Democratic policies, seemed only too happy to deflect the blame.
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In a two-minute clip shared all over Twitter, Goolsbee apparently crushes Hannity’s claims from atop the ivory tower that is the University of Chicago Booth School of Business. Hannity flailed about trying to maintain control of the conversation, but his lack of knowledge on the subject made for some entertaining late-night television.
Unfortunately for those who want to come away better informed, however, Goolsbee’s commentary is not helpful. The reality is that Biden is certainly responsible for higher gas prices, and his recent agreement with OPEC hasn’t moved the needle appreciably. Biden’s first actions as president in January 2021 included halting oil and gas activity in the Arctic National Wildlife Refuge and killing the Keystone XL pipeline. The latter would have efficiently and safely piped crude oil to refineries in Texas. The construction of that pipeline provided jobs, a fact that seemed to have escaped Goolsbee.
It’s certainly true that the drop in crude oil prices in 2020 made a lot of oil production in the U.S. unprofitable, as Goolsbee rightly notes in the interview. He is also correct that crude oil production in the U.S. has rebounded since prices recovered in 2021.
However, crude oil is not magically converted to gasoline whenever the political winds shift. Rather, crude oil must be refined into the myriad products we use every day. According to the Energy Information Administration, refinery utilization in the U.S. as of October 2021 (the most recent data available) is still well below the 2015-2019 average.
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Where would gas prices be if Biden hadn’t shut down ANWR and Keystone XL to appease far-left environmentalists in early 2021? Would refinery utilization be higher? Would the average person still be paying absurdly high prices for gasoline?
Surely the laptop class that makes up the bulk of the president’s most vocal support doesn’t care. They’re ideologically opposed to oil production (even though their plastic laptops are literally made of the stuff) and have been working from home since early 2020. Gas prices, for them, are an afterthought.
Only blue-collar America suffers from the ideologically driven shortfall of gasoline production and associated high prices. They don’t donate to the president and his friends, so they are of little concern to him. Goolsbee’s ill-informed defense of Biden might have deflected blame for the problems we face for a time, but the truth is that the public is paying more at the pump precisely because of Biden’s policies.
Levi Russell is an assistant teaching professor at the Brandmeyer Center for Applied Economics at the University of Kansas and a fellow at the Leonine Institute for Catholic Social Teaching. You can email him at [email protected].
