OPEC and the high cost of energy in the United States
This summer, gas prices topped $5.00 per gallon in many states, and regularly neared $7.00 in California. In Mendocino, one station’s price at the pump hit $9.60 per gallon.
It looked like those days were behind us, with the national average now just under $3.87 (still a big jump from the $2.26 average this week two years ago). But the relief might not last long.
OPEC+ (the 13 members of the Organization of the Petroleum Exporting Countries and 10 other oil-exporting countries) announced Wednesday that it will slash oil production by two million barrels per day, the biggest cut since before the pandemic. Oil prices, which were under $77 per barrel less than two weeks ago, are nearing $90 per barrel after the announcement.
President Biden said he was “concerned” by the “unnecessary” move. Behind the scenes, the White House response was sharper. CNN reports that “some of the draft talking points circulated by the White House to the Treasury Department on Monday…framed the prospect of a production cut as a ‘total disaster’ and warned that it could be taken as a ‘hostile act.’”
Indeed, this action that threatens U.S. energy security was made by hostile nations including Iran, Russia, and Venezuela.
Sen. Joe Manchin (D-WV) said Wednesday, “Today’s announcement from OPEC+ confirms why the United States must be energy independent and energy secure so we cannot be intimidated by foreign adversaries.”
Manchin’s energy permitting bill, which would speed the approval process for domestic energy production infrastructure, was blocked late last month. The bill would allow more production of fossil fuel energy as well as from renewables and other methods. It could come up in the Senate again during the post-election session. According to Politico, Manchin seems to “still think there’s still a deal with Republicans to be had.”
No Labels reached out to our members in California about how gas prices were affecting them.
“Everybody was just in shock to see $7.19 per gallon at the gas stations,” said Diana Radonic, a San Joaquin Valley resident. “We pay such high prices for everything, and we do it because we have no choice.”
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