Democrats for higher gas prices

March 11, 2022 6:44 PM ET Gasoline prices are displayed at a Chevron gas sta...


Gasoline prices are displayed at a Chevron gas station in Gustine, California on March 8.


Photo:

john g mabanglo / Shutterstock

You knew this was coming. Even as President Biden pleads with OPEC to pump more oil, Senate Democrats are threatening to punish US oil companies with a windfall tax if they increase production. The contradiction neatly sums up progressive energy policy.

“Putin’s war drives gas prices up and big oil companies rake in record profits,” Elizabeth Warren tweeted on Thursday. To curb what she calls “big oil profiteering,” she and 11 other Senate Democrats introduced legislation to impose the new tax.

“We need to hold big oil and gas companies accountable” and “we need to urgently invest in America’s clean energy economy,” says Colorado Sen. Michael Bennet. Responsible for what? Making money in a legal business? Respond to an obvious consumer demand?

The senators’ plan would require companies that produce or import at least 300,000 barrels of oil a day (or did so in 2019) to pay a tax per barrel equal to 50% of the difference between the current price and the average price. between 2015 and 2019 (about $57 per barrel). They say smaller companies would be exempted so the giants cannot raise prices without losing market share.

But oil companies don’t set prices, as the Federal Trade Commission has found time and time again. Market supply, demand and expectations do. Crude prices fell $20 a barrel on Thursday after the United Arab Emirates said it would encourage other OPEC members to increase production. Imagine how much oil prices could plummet if President Biden announced a moratorium on climate regulations that punish fossil fuels. Instead, Democrats are threatening to hurt producers for producing more.

Not so long ago, climate progressives argued that falling oil profits showed companies needed to move away from fossil fuels. That was what last year

ExxonMobil

the council battle was supposed to be all about. Liberals also say asset managers should divest from oil companies because their profits are set to decline as the world embraces green energy.

But now Democrats say oil companies are too profitable and blame them for benefiting from tighter oil supplies and higher prices that political hostility to fossil fuels has exacerbated. Rhode Island Senator Sheldon Whitehouse said “oil companies never let a good crisis go to waste.” Neither do the Democrats.

The windfall tax proposal shows that Democrats don’t want American companies to produce more oil, which is driving down gas prices. They want higher gas prices to get reluctant consumers to buy more electric vehicles. They can’t say it directly because that would be politically suicidal in an election year with the average gas price above $4 a gallon, so they do it indirectly via taxes and regulation.

It’s hard to believe President Biden would support the windfall tax, but with the influence of the climate lobby in this administration, you never know.

Wonder Land: While Joe Biden’s ‘State of the Union’ speech offered words of support for Ukraine, the president didn’t offer defense spending increases because it would go to the against his progressive agenda. Images: CNP/Zuma/AFP/Getty Images Composed: Mark Kelly

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Appeared in the March 12, 2022 print edition.

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