ANUZIS: Investigation into “price gouging” in the oil and gas sector is political nonsense

Americans are facing a crisis of consumer confidence as costs continue to rise and inflation crushes people’s wallets. The inflation rate is still high at 3.4 percent in 2024, above the pre-pandemic average. And with federal officials making clear they want to keep interest rates high and President Biden insisting he has already “turned around” the economy, it’s no wonder people are left perplexed.

Americans on fixed incomes are particularly vulnerable to economic downturns because they are primarily concerned with inflation and costs. But the security of our economic future and the well-being of consumers are clearly not the prerogative of the politicians whose job it is to ease the financial burden on Americans. Instead, they are full steam ahead with election-year policy.

Take, for example, the latest move by Democrats in their crusade against the American energy industry. Frank Pallone Jr., ranking member of the Energy and Commerce Committee, recently renewed emphasis on investigating oil and gas executives accused of alleged collusion and price-fixing with officials of the Organization of the Petroleum Exporting Countries.

Unfortunately, to the detriment of the people, Biden and his progressive cabal are determined to use every agency, committee, and platform to politicize the energy sector at a time when we need it most. All in the name of politics.

Moreover, their claims do not hold much water in the face of some key market indicators in the global energy market. Data shows that OPEC as an organization is on the verge of collapse, while the US energy sector has been booming for the past few years. Production is increasing, which will offset OPEC’s supply cuts and make a huge contribution to the American economy.

In fact, OPEC members have been leaving for years. Angola’s exit in January 2024 follows others such as Ecuador (2020), Qatar (2019) and Indonesia (2016). The market share of the remaining OPEC members fell to 27 percent, the same as during the pandemic. Unlike OPEC, global demand for fuel has since recovered and increased massively. US supply has risen steadily since 2021 and will reach 12.9 million barrels per day in 2023, according to the Energy Information Agency.

It makes no sense that systematic collusion keeps prices high and production low. The allegations against an energy executive directly contradict what the FTC itself has admitted: U.S. producers have achieved the most production increases in the world in recent years, and that is the only means of diversifying market share and reducing prices.

The FTC’s formal complaint against Pioneer – which prompted Pallone’s letter – acknowledges that U.S. manufacturing increases were due to domestic production and that “U.S. manufacturing growth brought new competition to the market and ultimately provided American consumers and businesses with salvation at the gas pump.”

This means the industry is actively working to expand production and keep prices low, and Americans are feeling the pinch. The Biden administration has been even more aggressive in its attempt to influence OPEC members. In October 2022, the president publicly asked the group to delay oil cuts until after the U.S. midterm elections, while simultaneously accusing U.S. producers of not doing enough to balance the market. If anything, Biden has sought to collude with OPEC on energy production and prices.

The question is: why should we care? This question is relevant because the health of the American energy industry directly reflects the health of the entire economy. According to Forbes, the United States became a net exporter of petroleum in 2020, resulting in total oil exports in 2022 of $119.37 billion and an export value of $75.02 billion for the first eight months of 2023.

Not only is this economic growth positive for businesses, but Americans are also benefiting at the pump. Oil prices across the country have been declining overall since June 2022 following the Russian invasion of Ukraine, coupled with record production in the US offsetting it. What we are seeing here is US production replacing OPEC supply cuts and Russian oil following global political upheaval, not some collusion.

House Democrats have clearly exploited this complaint to unnecessarily attack oil and gas companies for political gain, rather than recognizing that America’s booming energy industry has produced material benefits rather than keeping prices high and competition low. This is a frivolous request for an investigation, and administration officials need to get back to focusing on providing financial relief to Americans.

This means that we deal with real economic problems such as stagnation, inflation and everyday costs, not with allegations of collusion.