That feeling at the pump …
When it comes to energy prices, gasoline has been and remains the most visceral touch point for Americans (and, well, likely drivers around the world). Few really connect the turning on of a light bulb to that monthly electricity bill while essentially everyone with a (non-electric) car has experienced the smelly hands while watching the dollars go up far faster than the gallons while filling up the car.
Almost no Americans have internalized that, whether at $2.50, $3.50, or more per gallon, the “price” paid at the pump is only a fraction of the true price that we pay per gallon — in terms of health security risks, and environmental damage. (And, of course, it is far below the price at the pump paid in other industrialized nations.) Without internalizing the true cost (more likely in ballpark of $15 per gallon or so), Americans react to marginal price increases: talk of abundant oil and price drops, SUV sales skyrocket … prices increase and screaming begins.
Thus, when prices go down or, even more so, when they go up, the political rhetoric ramps up as politicians seek to take advantage of the moment — sometimes irregardless of the facts and, all too often, with disdain for long-term and potentially conflicting issues.
Gasoline prices are going up … a lot … under Trump despite the ‘drill, baby, drill’ mentality of the fossil-foolish Republican Party and extremely high US oil production.
Since Trump’s inauguration, U.S. gas has jumped 60 cents per gallon, meaning the average American household is paying nearly $300 more a year for gas. In that time, gas has risen from $2.33 to $2.92 per gallon as of the week of May 21, 2018, a 25.7 percent increase.
With the traditional Memorial Day start of higher gasoline use and people filling up for family vacations, those prices hikes are getting noticed … and, the Democratic Party leadership has a campaign to bring greater visibility to those prices and a legitimate case that Donald Trump’s blustery shoot-from-the-hip (anti-)diplomacy has a lot to do with those rising prices.
Senate Democratic Leader Charles Schumer (N.Y.) is ripping the White House over high gas prices, arguing President Trump’s decision to withdraw from the Iran nuclear deal is putting a pinch on middle-class wallets.
“According to energy analysts and experts, President Trump’s reckless decision to pull out of the Iran deal has led to higher oil prices.”
And, others have joined this assault. Public Citizen’s campaign is to “Blame Trump at the Pump”
With a 15-foot tall inflatable oil barrel and signs saying “Blame Trump at the Pump,” Public Citizen activists alerted motorists passing the Exxon station southeast of Union Station in Washington, D.C., to the fact that their wallets will take a bigger hit than in years past, and that Trump is partly to blame. …
“As Americans fuel up to visit friends and family this Memorial Day weekend, they should blame Trump at the pump for the highest prices in four years,” said Madeline Page, campaign coordinator for Public Citizen’s clean cars program. “Trump should reverse course on his dangerous policies that threaten to steal billions from hardworking families.”
The Trump Factor in Oil Prices: Geopolitical Risk could drive prices to over $100 per barrel according to Total’s CEO
To be clear, it is far from simply political partisans associating rising oil (and, thus, gas) prices with Trump (anti-)diplomacy. Last week, Patrick Pouyanné, Chairman and CEO of Total S.A., spoke last week at CSIS. He sees a real potential for over $100 per barrel oil due to increased geopolitical risk.
you have geopolitics and the announcement on Iran clearly is pushing the price up. … you have many impacts on the supply for many geopolitical events not linked to supply and demand … I would not be surprised to see $100 per barrel in the coming months because, clearly, you will have impacts.
Thus, there is truth and reality here:
- Team Trump’s shoot-from-the-hip disruption of international relations and ripping up of treaties is creating geopolitical risk that is increasing oil (and, therefore, gas) prices.
- These increased gas prices do impact consumers.
- Increased payments at the pump are higher, for middle class Americans, than money received due to the Trump tax program to benefit the wealthiest of Americans (and, well, overseas investors in the US stock market).
The politics are superb: bash Trump over the head, legitimately, for hurting Americans in the pocket book (and worsening the US trade deficit) for its (anti)diplomacy driving up oil prices.
However, those superb politics clash with a fundamental reality: low gas prices do not (as per above) reflect actual costs (as fossil fuel company profiteer with “external” costs ‘socialized’ and not in the price paid at the pump). And, those externalized costs have extremely serious impacts … and lower prices at the pump, a priori, worsens and increases those external costs since lower gasoline prices fosters higher gasoline consumption with more pollution. (And, not just near term: SUV sales go up with lower gasoline prices.)
As per all the times of increased gasoline prices and politicking over them, the loudspeaker noise misses the fundamental issue: high gasoline prices isn’t ‘the’ problem, the problem is that those ‘high’ prices are going to enrich foreign powers (including adversaries like Putin’s Russia) and increase oil company profits and not to helping address (reduce) the externalities from burning fossil fuels and drive a more prosperous future for America and Americans.
The gasoline tax has not increased in a quarter-century — seemingly multiple lifetimes ago, well before the era of iPhones, Facebook, and Dancing With The Stars. Revenue from that tax, degraded by inflation, doesn’t come close to covering highway construction and maintenance costs. With inflation, that 18 cents per gallon should be in the 30-35 cent range — simply to have kept pace with inflation. It should be in the 50-60 cent range simply to keep up with the increased costs and requirements for having a 21st century road system. And, as a user fee to cover true costs, it should be significantly higher than that to account for the costs of burning gasoline — from cancer to asthma to climate change.
To rail against high gasoline prices (even with the legitimate attribution of (at least some causation) to bad Trump policy) is to undermine efforts to boost transportation funding resources through (at a minimum) inflation adjusting the gas tax and, even more importantly, efforts to address the external costs from burning fossil fuels (especially climate impacts).
Whether Democratic politicians, activist groups like Public Citizen or otherwise, those concerned about fostering a better funded US infrastructure program, desirous of policies that foster a better American future for all, and understand the need to #ActOnClimate should be extremely cautious about seeking to exploit gas prices for political purposes.