"You know why I wanted to be a dictator? Because I want a wall, and I want to drill, drill, drill.”
Donald Trump to Sean Hannity
We are already drilling. And gasoline prices have dropped.
President Biden has a dilemma. He has an inflation problem and a climate problem. The single biggest in-your-face embodiment of inflation is gasoline prices. Meanwhile, climate activists want America to set an example on reducing use of fossil fuels by stopping development of fossil fuel infrastructure.
The U.S. is producing as much energy as it ever has, but we don't hear Biden taking credit for it. The climate activist portion of the Democratic coalition considers it an earth-endangering compromise with the devil. Biden allowed new oil leases in Alaska and pipelines to please West Virginia Senator Joe Manchin. The presence of Green Party candidate Jill Stein and environmental activist Robert F. Kennedy, Jr. running as an Independent give climate activists a way to show their disappointment with Biden. That could be catastrophic for him.
Gasoline prices in 2019 and 2020 created the mental anchor as the "good old days" of low inflation/low gasoline prices when Trump was president. The price rose steadily in 2021 and by mid-2022 -- marked in light blue -- it was double the anchored "Trump price," fueling public discontent with Biden's handling of the economy.
In the 2010s Russia and Saudi Arabia kept world oil prices low by ramping up production. Their goal was end U.S. production of "tight oil" locked in shale deposits. The strategy worked. Oil companies had over-invested in expensive leases and development projects which were unprofitable through 2020. Once burned, twice shy. Domestic oil companies were slow to ramp up production in 2021. Biden got the blame for that.
U.S. producers are pumping 13.2 million barrels a day, more than pre-Covid heights of 2019. Pump prices vary significantly by state. This is less due to state gasoline taxes than it is to refinery location and design. Oil companies are looking ahead to electric vehicles and are reluctant to add refining capacity.
The public mood on the economy could work out for Biden. Gasoline prices have dropped from the high-water "anchor" of 2022, so there is apparent progress. Used car prices are back in sync with new car prices. Supply-chain dislocations have largely ended. Unemployment is low, but not so low as to frighten the Fed, which is signaling an end to tightening. Yields on long treasuries are dropping; mortgage rates may follow.
But voters don't pay attention to economic statistics. They notice message and branding. Biden may not get credit for the easing of inflation. Trump is the one saying he will take decisive action to lower gasoline prices: "Drill, drill, drill." Trump defined the long trend of an improving economy under Obama from 2009 through 2016 as "carnage," but then called it a great economy three months later. He was clear and forceful saying that the economy had been bad under Obama but Trump changed everything and made it great. Democrats were negligent and let that happen.
Biden has his brand: He is the one who criticizes fossil fuels. Trump is the opposite. Trump isn't warning us. He is bragging. He wants to be known as a "dictator" who will cut through the legal and regulatory obstructions of Democratic climate worriers. Climate polls well. There is a general and amorphous sentiment among a majority of Americans that something should be done. Something inexpensive. Something that inconveniences other people. But gasoline prices are immediate and urgent. People hate high gasoline prices.
The ideal situation for Biden would be for gasoline prices continue dropping and for Biden to get credit for it. A more likely one is that gasoline prices come down and Trump gets the credit. He is the one outfront cheerleading for more drilling.
Trump takes credit for everything he thinks will help him win an election. My worry is that the "Biden Dilemna", which includes undying support for Israel, no matter what, in the Israeli and Palistine conflict and the lack of positioning and amplifying what he has done for climate change may lead many young voter to not vote in the upcoming Presidential election. Most of the disgruntled young voters will most likely not vote for Mr. Trump, but will possibly vote for third party candidates, or, not vote at all...Either scenario could be a nail in the coffin for the re-election of President Biden. The Dems need to change the narrative and show some spine on promoting what they have done so far under the Biden Admistration and what they intend to do in the future to correct the course which radical right wing Republicans are wanting to lead the country.