The price of gasoline is poised to rise higher in the coming weeks than it has since 2014 -- right as this year's peak driving season approaches.
That increase is fueled by global events largely outside U.S. control. But should President Trump pull out of the nuclear deal with Iran, as he has been itching to do for months, the price at the pump could continue to creep even higher past Memorial Day — potentially presenting more political headaches for Trump and the GOP going into the midterm elections.
On Sunday, the national average gasoline price was about $2.81 per gallon, according to both the American Automobile Association and GasBuddy. As the busy travel weekend approaches, the price could break the $2.90 mark to make for the most expensive summer gas prices since 2014, analysts from both organizations said.
U.S. drivers are being pinched at the pump as the price of oil creeps up globally. The price of Brent crude, a global oil benchmark, grew to $75 per barrel from just under $50 per barrel since the same time last year.
Oil prices have swollen due to a confluence of international factors. The Organization of the Petroleum Exporting Countries (OPEC), a cartel of petroleum-producing nations dominated by Saudi Arabia, has curtailed production for more than a year as that kingdom's state-run oil company, Saudi Aramco, prepares to sell its shares on the open market as part of an upcoming initial public offering. The higher the price for oil goes, the more valuable the company will be. Saudi Aramco will be the largest publicly traded corporation in the world when it goes public.
Simultaneously, oil production in Venezuela, home to the world's largest crude reserves, has plummeted during the country's economic crisis under President Nicolás Maduro. Earlier this year, Venezuela's oil production hit a three-decade low of 1.6 million barrels a day, according to an OPEC report, as crime grows and workers flee the oil-rich plains of eastern Venezuela.
Nonetheless, the thriving domestic economy has insulated U.S. drivers from much pain at the pump. “With a stronger economy, better wages, consumers have a higher confidence. With that, they are not really blinking twice with the more expensive prices we’re seeing this year," AAA spokeswoman Jeanette Casselano said.
These geopolitical events alone are not enough drive the U.S. national average above the $3-per-gallon mark, according to analysts from AAA and GasBuddy.com.
“I think we will stop short of that psychological $3 barrier,” said Patrick DeHaan, a petroleum analyst at GasBuddy.com, “of course, barring any unforeseen changes.”
One such curveball is Trump's decision on Iran.
Though presidents are often blamed by the driving public for high gas prices — just ask Jimmy Carter — there are few levers in the White House with which a commander in chief can control the price set by the global economy for oil.
But the president's decision on Iran is different. Trump must decide whether to reauthorize the multilateral nuclear pact his predecessor, Barack Obama, negotiated with the Middle Eastern nation.
The Iran nuclear deal works like this: In exchange for Iran submitting to regular international inspections, the United States and other parties ease up on nuclear-related sanctions against Tehran. For the United States to keep its end of the deal, the president must periodically waive nuclear sanctions against Iran, which remain part of U.S. law.
Trump's next waiver deadline is Saturday. For months, Trump has been reluctant to keep the Iran deal in place — as he has with most of Obama's policy achievements. The president has elevated Iran hawks John Bolton and Mike Pompeo, hiring the former to be his national security adviser and promoting the latter to secretary of state from CIA director. In January, Trump warned that unless Congress fixes "the deal's disastrous flaws" he will withdraw from the pact.
Opponents of the deal have turned up pressure on Trump to pull out. Last week, Israeli Prime Minister Benjamin Netanyahu claimed in a televised speech that his country has tens of thousands of documents proving Iran lied about its nuclear-weapons history when it signed the 2016 deal.
If Trump's decides to end U.S. participation, that could cause oil prices to rise even more as it becomes more difficult for Iran to sell its oil in the international market.
“The president really has limited control of gas prices,” DeHaan said. But he added: “His rhetoric with Iran is fiery and could push up prices further.”
Trump should be well aware of how critics try to pin blame for high gasoline prices on the president. He did so to Obama in 2012 when the average gas price nearly broke $4 per gallon, suggesting on Twitter the president does indeed have the power to make the price of gasoline obey his wishes:
Gas prices are about to hit a record high during the Labor Day weekend. @BarackObama could have stopped this.— Donald J. Trump (@realDonaldTrump) August 31, 2012
Gas prices are at crazy levels--fire Obama!— Donald J. Trump (@realDonaldTrump) October 22, 2012
Throughout Trump's tenure in office, the nation has enjoyed gasoline prices well below $3 per gallon — something for which Trump has been eager to take credit:
Gas prices are the lowest in the U.S. in over ten years! I would like to see them go even lower.— Donald J. Trump (@realDonaldTrump) July 4, 2017
But consumer habits will change “if they climb well into the $3 range nationally,” DeHaan said of gas prices. Above that mark, some lower- and middle-income motorists may cancel summer road trips while wealthier drivers will be more eager to look into buying fuel-efficient vehicles.
One big question for Trump as he contemplates the Iran deal is whether a presumed bump in gasoline prices from pulling out of the pact could change voting habits in November.
Congressional Republicans running to keep their seats hope that delivering a sizable tax cut to voters — the only major legislative achievement for the federal government united under the GOP — will buttress the party against what some expect will be a Democratic wave election. With unemployment low and the economy roaring, the GOP hopes to stave off losses the president's party usually sees in the midterms following a White House win.
Should the Iran deal end, the higher daily transportation costs may take a bite out of the boon from the tax breaks — and give Democrats another talking point to counter the GOP's economic narrative.
Correction: This story originally stated Mike Pompeo was promoted from secretary of state to CIA director. Pompeo was actually elevated from the CIA post to the State Department.
|You are reading The Energy 202, our must-read tipsheet on energy and the environment.|
|Not a regular subscriber?|
It was another weekend full bad news for Environmental Protection Agency chief Scott Pruitt. Here are the highlights:
- Another day, another EPA aide gone: On Friday, Pruitt lost his fourth aide in a week amid ongoing scrutiny about the administrator’s pricey travel habits and security detail. John Konkus, the second-in-command on the public affairs team, is leaving the agency for a job at the Small Business Administration.
- “The most burdensome review process”: Top aides to Pruitt have been slowing the release of information beyond what is legally allowed by screening public records requests under the Freedom of Information Act, Politico reports. One expert said it looks like “the most burdensome review process I’ve seen documented.” Internal emails have revealed “Pruitt’s political appointees reviewed documents collected for most or all FOIA requests regarding his activities, even as he’s drawn scrutiny for his use of first-class flights and undisclosed dealings with lobbyists,” per Politico. “While past administrations have given similar heads-ups to political aides for certain records requests, FOIA experts say this high-level vetting at EPA appears to have increased compared with the Obama era.”
- Behind the scenes: The ongoing barrage of news has created an “unreal” atmosphere inside the agency, Axios reports. And Trump is reportedly upset about a story in The Atlantic last week that said Pruitt’s own media team had attempted to shop negative stories about Interior Secretary Ryan Zinke to take heat off of the administrator. "All of us have been frozen out over time," one EPA political appointee told Axios. "It's absolutely unreal working here. Everyone's miserable. Nobody talks. It's a dry wall prison."
- Democrats want answers about the latest revelations related to Pruitt’s connection with lobbyists who helped him plan a series of lavish trips to Morocco, Australia and Israel. “The outsized role you have given lobbyists and non-governmental individuals in setting both your domestic policy agenda as well as your international travel is concerning and leads to even more questions about your ability to objectively serve the American people,” Sen. Ed Markey (D-Mass.) wrote in a Friday letter to Pruitt.
- The lobbyist couple who rented a Capitol Hill condo to Pruitt for what critics called a “sweetheart” deal of $50 a night had to pay a $2,034 fine to the District for incorrectly renting out the spot, Politico reported. “The owner agreed to pay the fine for engaging in a business without a housing residential license,” a spokesman for the D.C. Department of Consumer and Regulatory Affairs said.
— One year after the EPA removed its informational website about climate change, the page is still down. Before it was taken down to be “updated,” the page referred to a position on climate change that cited humans as the main driver of global warming. “But that position contradicted statements by the new EPA chief, Scott Pruitt, who had expressed doubts about human activity being the dominant driver of climate change,” The Post’s Chris Mooney reported. “The removal of EPA’s main page on climate change … an extensive informational resource, is significant because it underscores the ambivalence about climate change science within the Trump administration.”
— The coal baron vs. the GOP: Don Blankenship, the former coal executive released last year from prison who is running for a Senate seat in West Virginia, defended his use of the term “China people” in an ad attacking Senate Majority Leader Mitch McConnell. “We’re confused on our staff as to how it can be racist when there’s no mention of a race. There’s no race. Races are Negro, white Caucasian, Hispanic, Asian. There’s no mention of a race. I’ve never used a race word,” Blankenship said at a Thursday night event, per Roll Call. In a Friday statement, Rep. Judy Chu (D-Calif.), the first Chinese American woman elected to Congress and chair of the Congressional Asian Pacific American Caucus, chided Blankenship's comments. “There’s no mystery to what Mr. Blankenship is doing,” Chu said. “It is intentional race baiting.”
— His final pitch: Blankenship is surging ahead in recent polling before Tuesday’s primary. And Republicans continue to be concerned he may win the party’s nomination, Politico reports,worried his victory would ruin their chances at beating Democratic Sen. Joe Manchin III in November. “As the tight contest hurtles to a close, four Republicans said they’d reviewed polling conducted in recent days showing Blankenship … moving narrowly ahead of his more mainstream GOP rivals, Rep. Evan Jenkins and state Attorney General Patrick Morrisey,” per the report. “The Republicans cautioned that the surveys, designed to offer a snapshot of the race, were conducted over a brief period of time and may be overstating Blankenship’s support. Still, Blankenship’s rivals and other Republicans are alarmed.”
— "Blankenship... can’t win:" Trump tried to throw cold water on Blankenship's candidacy Monday morning on Twitter, urging West Virginia voters to pull the lever for either of his two GOP rivals:
To the great people of West Virginia we have, together, a really great chance to keep making a big difference. Problem is, Don Blankenship, currently running for Senate, can’t win the General Election in your State...No way! Remember Alabama. Vote Rep. Jenkins or A.G. Morrisey!— Donald J. Trump (@realDonaldTrump) May 7, 2018
Trump tried the same tack in the Alabama Senate special election by repeatedly endorsing then-Sen. Luther Strange on Twitter. Ultimately, Strange lost to controversial Roy Moore, giving Democrat Doug Jones a path to victory in the ruby-red state.
Blankenship may prove to be even more disruptive in West Virginia than Moore was in Alabama. The former coal baron told CBS News on Sunday he hasn’t ruled out a third party bid for Senate if he loses the Republican nomination.
— Scientists warn against losing a crucial research ship: Some ocean researchers are irate that the National Science Foundation plans to sell the research vessel Marcus G. Langseth. The 235-foot ship excels at mapping under the Earth's crust with its array of sound guns. Now scientists are loudly complaining about the NSF's plans to divest from the ship, which has been plagued by financial problems from the start, according to The Post's Ben Guarino. Marine seismologists “feel that the NSF has betrayed us a bit here,” James Austin, a geoscientist at the University of Texas at Austin, told Guarino.
— Still in the dark: Months after Hurricane Maria blasted onto Puerto Rico, the fate of the island’s electric system is still uncertain. "After Maria and the hurricane that preceded it, called Irma, Puerto Rico all but slipped from the modern era,” the New York Times reports in an extensive look at the territory’s recovery efforts. “Even now, while officials say the $2.5 billion reconstruction effort has restored power to 98 percent of the grid’s customers, swaths of hilly country across the island are still pitch black after dark, punctuated by lights run on private generators... Even restored sections of the grid are nightmarishly unreliable.”
— "An immediate threat to life:" Officials are warning about dangerously high levels of sulfur dioxide following the eruption of Kilauea volcano in Hawaii. In a statement, the Hawaii County Civil Defense Agency said the gas is “an immediate threat to life for all who become exposed.” “Elena Cabatu, a spokeswoman for the Hilo Medical Center in Hilo, Hawaii, the main hospital that was prepared to treat affected patients, said on Saturday there had not been an increase in emergency room visits, adding that people so far appeared to have stayed away from the areas with the highest concentration of gases,” per the New York Times.
— End of the (pipe)line for protesters: The mother and daughter who have been camped up in the trees since April 2 to protest the construction of the Mountain Valley Pipeline in Virginia finally came down on Friday after a federal judge threatened heavy fines, The Post’s Gregory S. Schneider reports. “The women endured subfreezing temperatures, high winds, snow and rain in their efforts to stop tree-clearing and to rally opposition against the 303-mile pipeline,” he writes. “Late Friday, a federal judge said the pipeline company had legal authority to be on the land, found the women in contempt and gave them until 11:59 p.m. Saturday to come down."
— A lot on the line for Volkswagen’s ex-CEO: The German automaker's supervisory board is considering demanding damage claims from its former chief executive, Martin Winterkorn, who was indicted last week in connection with the company’s diesel emissions scandal. VW spokesman Michael Brendel told a German news agency that “the investigation has been going on for quite some while and is conducted independently from the authorities’ investigation,” per the Associated Press.
POST PROGRAMMING: On Thursday, The Post will gather government leaders and experts across the energy sector to discuss issues affecting the safety, security and future of the country’s energy infrastructure and electric grid. Sign up here for a live stream notification for the event.
- The House Appropriations Subcommittee on Energy and Water Development and Related Agencies holds a markup.
- The American Wind Power Association’s Windpower conference begins in Chicago.
- The House Energy and Commerce Environment Subcommittee holds a hearing on “Sharing the Road: Policy Implications of Electric and Conventional Vehicles in the Years Ahead” on Tuesday.
- The Senate Energy and Natural Resources Committee holds a hearing on Puerto Rico’s electric grid on Tuesday.
- The Wall Street Journal’s “Future of Everything Festival” begins in New York on Tuesday.
- The CHP Association’s 2018 policy forum begins on Tuesday.
- The United States Energy Association holds an event on the benefits of LNG exports on Tuesday.
- The Atlantic Council holds an event on “Innovations for a Secure Energy Future” on Tuesday.
- The Wilson Center’s China Environment Forum holds an event on “How Low (on Energy and Carbon) Can Buildings in China and the U.S. Go?” on Tuesday.
- The Energy Department’s Office of Energy Efficiency and Renewable Energy holds a webinar on Tuesday.
- American Wind Action holds an event on Tuesday.
- The Senate Indian Affairs Committee holds a hearing on the nomination of Tara Mac Lean Sweeney to serve as the assistant for Indian Affairs at the Interior Department on Wednesday.
- The Senate Environment and Public Works Committee holds a legislative hearing on America’s Water Infrastructure Act of 2018 on Wednesday.
- The Senate Energy and Natural Resources Subcommittee on Public Lands, Forests and Mining holds an oversight hearing on Wednesday.
- The Environmental Law Institute holds an event on infrastructure review and permitting on Wednesday.
- The House Energy and Commerce Energy Subcommittee holds a hearing on “Examining the State of Electric Transmission Infrastructure” on Thursday.
- The Women’s Council on the Energy and the Environment holds an event on congressional priorities in 2018 and beyond on Thursday.
- The United States Energy Association holds an event on “An Advanced Approach to Coal Utilization” on Thursday.
— From the New Yorker: