March 31, 2022

Times of San Diego: Rep. Mike Levin: Our High Gas Prices Are Caused by Pandemic, Putin, and Price Gouging

There’s no question we’re all feeling pain from high gas prices. The average price of regular gas in California is now around $6.00 per gallon.

While Americans are hurting, politicians and pundits are pointing fingers and oversimplifying the problem to serve their narrative of choice. It’s counterproductive, and it’s doing an incredible disservice to everyone who simply wants solutions.

The reality is that high gas prices are a far more complex problem than the pundits would lead you to believe. It’s time to be honest about how we got here and what tools Congress has to actually help save you money at the pump.

There are mostly three factors contributing to these high prices. Let’s call them the Three Ps: Pandemic, Putin, and Price Gouging.

When the pandemic started, demand for gasoline plummeted. Our economy largely shut down. Many people significantly reduced driving and traveling, and many businesses stopped manufacturing certain goods that require energy to produce. So, the oil and gas industry made drastic cuts to the amount of oil they extract and refine.

Then, after many months of lockdown, Americans hit the road again, and our economy came roaring back. Oil and gas production didn’t recover at the same rate and keep pace, and it still hasn’t. Prices have spiked accordingly. In April of 2020, the price of a barrel of crude oil was as low as $16.50. Recently, it reached $123.

Next, there’s Vladimir Putin. Russia’s unjust and unprovoked invasion of Ukraine has forced the United States and nations around the world to respond with crippling sanctions on Putin and his economy, including a ban on fossil fuel imports from Russia. While only 3% of U.S .crude oil supply comes from Russia, they’re a major producer on the world stage, and the ban has significantly impacted global prices.

Third, there’s price gouging: while Americans are paying more at the pump, Big Oil is taking in record profits. Exxon reported $23 billion in profit for 2021, its highest since 2014. Same with Chevron, earning $15.6 billion in profit.

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Ask yourself: when the price per barrel of oil recently fell back below $100, did you see any relief in gas prices?

Absolutely not. While Big Oil executives are raking in the cash, many Americans are struggling to make ends meet and are paying more than ever to fill up.

So, what tools do we have to bring down prices and provide some relief?

First, we need to get money back in the pockets of average Americans. I’m open to any action that will help, including a windfall profits tax on Big Oil where we send the proceeds back to people paying the price.

One such piece of legislation I’ve cosponsored is the Big Oil Windfall Profits Tax, which would impose a per-barrel tax on the largest oil companies based on the difference between the current price of oil and the pre-pandemic price. That tax revenue would go directly back to you as a quarterly rebate.

We should also crack down on fossil fuel subsidies. Big Oil executives taking in record-breaking profits and refusing to pass savings on to consumers don’t deserve any assistance from taxpayers. Plus, the CEOs of these oil companies recently refused to come testify in the House Natural Resources Committee about the high prices and how we can get them down.

And if those reasons aren’t enough to end their subsidies, these companies are sitting on thousands of drilling permits on public lands that have already been approved. It’s time to end their corporate welfare and stand up for average Americans.

Finally, we need to reduce our consumption of fossil fuels and invest in clean energy independence. Regardless of domestic oil production, gas prices always will be impacted by the volatility of the global oil market, which is often manipulated by dictators and our rivals on the international stage.

Transitioning to clean energy and zero-emission vehicles is the best medium- and long-term course of action. Ideally, we will manufacture these vehicles here in America while dramatically ramping up the domestic supply of raw materials needed for them, such as lithium.

Let’s be clear: there is no silver bullet that is going to fix our predicament overnight, but these steps would go a long way in helping everyday Americans make ends meet. And while pundits and politicians will continue to point fingers, I’m going to keep focusing on solutions that deliver real results. That’s my commitment to you.

By:  Rep. Mike Levin
Source: Times of San Diego