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A surging U.S. oil industry has reshaped the politics of high gas prices

Why Biden is handling steep prices differently than past presidents — and what it means for the climate fight

A person pumps gas at a Shell gas station in Houston on April 1. (Brandon Bell/Getty Images)
8 min

On March 31, President Biden announced a new energy policy designed to combat high gasoline prices.

The United States will release 1 million barrels from the Strategic Petroleum Reserve every day for six months to reduce prices. Biden will also use his authority under the Defense Production Act to accelerate the development of minerals needed to construct electric vehicles. While Biden suggested the world needs to cut its dependence on oil, in the short term he emphasized the need for more production. “If we want lower gas prices,” Biden said, “we need to have more oil supply right now.”

This rhetoric reflects the contradiction in the United States’ approach to energy and climate policy. Unlike past energy crises — most notably during the 1970s — individuals and businesses are under no pressure to reduce their oil and gas consumption. The Biden administration is wary of suggesting conservation measures in large part due to the politics surrounding the domestic oil and gas industry, which has flourished since 2010. Politicians in both parties support the drive for “energy independence.” But this policy will make it harder to decarbonize the economy and reduce dependence on fossil fuels to combat the dangers of climate change — a goal an overwhelming majority of Americans said they supported before recent events.

In the first half of the 20th century, the United States was both the largest consumer and producer of petroleum, accounting for more than 50 percent of the global total. Gasoline consumption per capita in the United States was higher than anywhere else on earth, reflecting a way of life defined by automotive transportation.

In periods of crisis such as World War II, however, the federal government imposed price controls and rationing of energy products.

After the war, consumption soared as global production fueled a boom in fossil fuel use. Domestically, the interstate highway system encouraged more driving and oil company subsidies kept gasoline relatively cheap.

The boom came to an abrupt end when demand outstripped supply in the early 1970s, leading to the supply shock of the 1973-1974 Arab oil embargo and OPEC price increase.

The 1970s also marked the peak of postwar American oil production and the rapid increase in domestic dependence on imported oil, much of it from the Organization of the Petroleum Exporting Countries. That pushed politicians to experiment as the federal government tried to tackle this burgeoning crisis. President Richard M. Nixon’s Project Independence foresaw cuts to oil imports through greater fuel efficiency, the nation’s first federal speed limits and a shift to alternative energy sources. President Gerald Ford followed with the Energy Conservation Act of 1975, which created the Strategic Petroleum Reserve and pushed voluntary conservation and fuel efficiency programs.

While Nixon and Ford aimed to boost domestic oil production to offset the nation’s dependence on imports, their policies also prodded Americans to reduce consumption.

President Jimmy Carter went even further. In April 1977, Carter called the crisis of rising oil consumption and dependence on imports the “moral equivalent of war,” and suggested it was a generational challenge that Americans could face together. Through greater use of public transportation, collective efforts at reducing gasoline and home-heating energy consumption as well as a shift toward renewable energy and coal, which was more plentiful than oil, Carter predicted the nation could cut its oil use by 10 percent in seven years.

Yet Congress rejected most of Carter’s programs, due to the influence of oil-state politicians and the political dangers posed by driving prices up for American consumers. Carter’s appearances in cardigans and his push to raise thermostats in summer and lower them in winter also became the subject of ridicule. Two years later, in 1979, as inflation surged and the Iranian Revolution prompted gasoline shortages and spiraling prices, Carter resorted to compulsion to force Americans to reduce consumption, insisting that these efforts would pay dividends.

Though not politically popular, Carter’s energy conservation program was a success from a policy standpoint. Oil imports fell from 8.6 million barrels per day (bpd) in 1977 to 8 million bpd in 1980, while overall petroleum consumption fell by 2 percent. Gasoline demand fell 5 percent. These patterns continued even after President Ronald Reagan entered office with a vastly different message, eschewing calls for conservation and touting increased production.

In many ways, Americans seemed to have no other choice. The 1970s had proved the danger of relying on imports from the volatile world oil market. More importantly, estimates in the late 1970s suggested oil would be in permanent short supply, with most of the world’s reserves depleted by 2000. Getting off oil was a matter of national survival.

But the urgency to conserve dwindled over subsequent decades. President Bill Clinton pushed for further research into renewable energy to reduce oil demand, though an uninterested public and a Republican Congress stymied his efforts. President George W. Bush, a former oilman whose administration was full of industry executives and lobbyists, acknowledged that the United States was “addicted to oil” in a speech in 2007 and laid out a small program to boost clean energy.

Dependence on imported oil and vulnerability to price jolts motivated both presidents, who understood the political and policy perils of high gas prices. But these fears peaked in the early 2000s, when pundits and politicians became concerned that a permanent shortage of oil loomed, just as it had in the 1970s.

President Barack Obama was different. He came to office in 2009 determined to address the danger of climate change, a larger and more existential threat to American security than oil imports. As he pushed for better energy standards, greater investment in solar and wind power and increased tax credits for electric vehicles, Obama linked oil dependence to the threat of terrorism and vowed to reduce American oil consumption by 35 percent over 20 years through investments in renewable energy and better energy standards for cars.

Obama’s policies did affect individual consumption. Per capita gasoline use fell from 457 gallons in 2000 to 412 gallons in 2015, reflecting improved energy standards and a shift toward more fuel-efficient cars. Yet, national oil consumption did not fall at all. At the same time, production rose dramatically, driven by advances in hydraulic fracturing and horizontal drilling in the shale formations of Appalachia, North Dakota and West Texas.

Obama later took credit for the boom — recognizing its political value.

His successor President Donald Trump pushed for American “energy dominance,” suggesting the United States could overtake Saudi Arabia and Russia as the world’s largest exporter of oil. While the coronavirus pandemic caused oil production to slide, the United States did become a major oil exporter once again. And that had major political ramifications.

Many constituents’ jobs and well-being now depend on the growth of domestic oil production, prompting intense bipartisan pressure not to damage this industry, particularly from politicians who represent states rich in fossil fuel resources.

The conversation around oil has also changed. Concerns over shortages have vanished. Oil now appears effectively limitless. While the United States remains vulnerable to price shocks such as the current one, the fears that drove conservation policy for decades have faded, replaced instead by the danger of climate change.

Biden is now caught between contradictory forces. Reflecting the sentiments of his political base, he wants to address climate change. And support for investing in renewable energy and cutting overall oil use is high.

At the same time, consumption of fossil fuels remains an integral part of the American political economy. The administration has been extremely sensitive to concerns over high gasoline prices. Rather than adopt measures to curb consumption, Democratic lawmakers across the country are eager to subsidize it. While Biden’s March 31 address contained calls for ending oil dependence, most of his policies aimed to increase oil supply in the short-term.

Yet, to accelerate the energy transition and accomplish a more rapid move away from fossil fuel dependence, the United States has to cut its oil use. While boosting production and keeping prices low might be good politics, it will render it almost impossible to address climate change — which increasingly proves costly to Americans in different, less visible ways.

Ironically, then, politicians trying to ensure that Americans pay less at the pump while protecting constituents’ jobs are not only precipitating long-term environmental catastrophe. They are also laying the groundwork for larger climate-related economic repercussions further down the line.