President Biden has officially requested the Federal Trade Commission (FTC) to investigate high gasoline prices. Unfortunately, this diversionary tactic has a long history and follows a familiar pattern. Pump prices go up and then politicians—usually the ones most vulnerable to claims that they supported anti-energy environmental measures that have added to the problem—point their fingers at Big Oil and demand an investigation. The FTC conducts one and invariably fails to find any anti-competitive conduct, but the report is ignored. Then the process repeats itself the next time pump prices spike.
As with past episodes of high gasoline prices, the accusations of corporate greed and price gouging don’t make any sense. After all, if major oil companies can simply manipulate gas prices upward, why would they have endured six years of considerably lower prices prior until 2021? And if they can just pull a few strings and create $3.40 per gallon gas, then why not twice as high? There’s no reason to believe the FTC will find any wrongdoing this time around—at least on the part of the energy companies.
Even though the Biden administration will likely ignore the FTC’s findings, the rest of us should not, especially if the report points to real things we can do to make energy as affordable as possible.
Ironically, it is the Biden administration itself that is guilty of the very kinds of supply-constraining actions for which it now accuses the energy companies. After all, if one or more oil companies took steps to block a pipeline project that would bring more Canadian oil into the country, or somehow prevented competitors from acquiring new oil leases on federal lands, or pressured lenders to stop providing finance for new production, then the FTC would have plenty of anti-competitive conduct to include in its report. But it is the Biden administration, not industry, that did these things, with the Inauguration Day rejection of the Keystone XL Pipeline, the suspension of new leasing on federal lands (subsequently held illegal in court when challenged by industry), and attempts to dissuade banks from lending money for fossil fuel-related projects. These measures are a part of the administration’s expansive climate agenda, much of which puts upward pressure on gasoline prices and does so by design.
The president told FTC “I do not accept hard-working Americans paying more for gas because of anti-competitive or otherwise potentially illegal conduct.” But is it any less wrong if Americans have to pay more because of costly government-imposed climate measures?