Biden’s Gas-Price Diversion

He sends out the FTC posse to chase the wrong suspects

WSJ editorial.

"President Biden is feeling political pressure to show that he’s doing something about rising energy costs even as his Administration’s policies are a big part of the problem. Ergo, round up the usual fossil-fuel suspects.

On Wednesday the President sent a letter to Federal Trade Commission Chair Lina Khan asserting that there is “mounting evidence of anti-consumer behavior by oil-and-gas companies.” He urged her—as if she needed his prodding to target businesses—to investigate illegal conduct and “bring all of the Commission’s tools to bear if you uncover any wrongdoing.”

The President complained—irony watch—that “the largest oil and gas companies in America are generating significant profits off higher energy prices.” Large producers like Exxon and Chevron are generating hefty profits because they have scaled back investment in new production due to pressure from green investors. Exxon this summer lost a board proxy campaign by a hedge fund allied with progressive investors who complained the oil and gas giant had prioritized new production over profits. The left doesn’t want either. 

Mr. Biden also complained that the “unexplained large gap between the price of unfinished gasoline and the average price at the pump is well above the pre-pandemic average.” He can blame in part the renewable fuel standard, aka ethanol mandate, which his Administration is working to ramp up.

Our sources say the ethanol mandate is adding roughly 14 cents per gallon to the cost of producing gasoline and diesel in the U.S. The difference between the cost of wholesale gasoline and ethanol adds another 10 cents. One easy way to reduce gasoline prices is to waive the ethanol mandate.

In any event, the main reason gasoline prices are rising is because demand is outstripping supply. The Administration is exacerbating the supply shortfall with policies that discourage and raise the costs of domestic production. Perhaps Ms. Khan should investigate the collusion among Democratic politicians, regulators and green investors.

Mr. Biden knows that the FTC is unlikely to turn up any illegal conduct. But unleashing the agency on energy companies gives the appearance of doing something while diverting public attention from the problem that is his own war on fossil fuels."