Dispatch from America: Skyrocketing Gas PRICES May Give Keystone New Life

Americans are not happy. (I know … these days, are they ever ?)

But this is different. Americans are getting a reality lesson that almost all the rest of the world learned a decade ago: the days of cheap gasoline are over.

And they don’t like it!

Even most of those who called for, campaigned for and celebrated when US President Joe Biden cancelled the Keystone XL pipeline project from Alberta to the US are hurting … a lot.

Gas prices in the US now approach $4 to as high as $5 (US) a gallon in many states … nothing new by Canadian (or European) standards … but a horror for US consumers.

In the Fort Lauderdale area , where I am now visiting, regular gas is now averaging up $3.59 a US gallon … where $2.73 or less used to be the norm.

People are pissed!!! Regardless of their political affiliation.

Of course, it’s due here to a very old and very basic law of capitalist economics: supply and demand.

Not like, in some countries, where environmentally-driven policies are aimed at deliberately making fossil fuels more expensive … to reduce their use and help fight climate change.

THAT is not the case in the US.

Americans are just paying the price, literally, for a post-Covid return to economic growth and the inevitable increased energy consumption.

NOTHING to do with environmental or climate policies.

Of course, the price escalation is not affecting just motorists/families driving to work or out for a weekend drive. This US Thanksgiving, 93% of those planning to travel will do so by car.

Commercial vehicle drivers … from delivery vans to semi-trailers … are also being hugely impacted as well … and passing it on to customers … wholesale and retail.

And huge numbers of the American people … registered Democrats as well as Republicans … are angry.

“Despite strong job gains in recent months and promising signs of economic growth, only 23% of respondents rated the economy positively, the lowest since the height of pandemic lockdowns in May 2020. More than 70% said recent rising gas and grocery prices have caused hardships for their families,” according to Seattle’s KOMO News.

In Fact, in the latest Fox News poll, only 44% of Americans approved Biden’s overall job performance … down 12% since June; and only 36% supported his handling of the economy … a drop of 15%.

Sunday, the New York Post reported even more troubling polling results:

“While the CBS News/YouGov poll pegs Biden’s job approval rating at 44 percent, which is higher than some other recent surveys, it also shows that he gets negative scores for his handling of inflation (67 percent), immigration (64 percent), the economy (61 percent), foreign policy (58 percent), and race relations (56 percent).

“Biden is in positive territory for his distribution of the coronavirus vaccine — 53 percent.” 

Supply and demand: or actually, the the LACK of supply is clearly hurting Biden and the Democrats.

And as the world economy continues to rebound, and demands for fuels continue to grow, the picture for the US will likely even get worse … just as US politics heat up again for the 2022 mid-terms!

And how ironic: by killing Keystone, Biden put the plug into the pipeline that could have pumped, according to the Natural Resource Defense Council environmental organization, 830,000 barrels of Alberta tar sands oil a day to refineries on the Gulf Coast of Texas.

Total estimated supply of crude oil buried in Alberta: 168 BILLION barrels.

Canadian oil for a thirsty America. In return, of course, for billions of US dollars pumped into Canadian jobs, royalties, taxes.

Now, I get it: from an environmentalists’ point of view, Keystone’s cancellation was good for the planet, good for the climate, good for reduction in fossil fuel consumption.

That’s NOT, however, what most Americans now care about … and the implications of that will very likely come back to haunt Biden and the Democrats.

Higher gas prices will bring even lower voter support.

From a practical and political point of view, Biden and the Democrats may have sealed their political fate in the mid-terms.

I doubt Biden had any idea when he killed Keystone, Americans would so soon be facing $5 a gallon gasoline …with prices heading even higher by next summer as world demand continues to grow.

It’s the stuff that can make and break governments … more important to voters than Covid, crime, gun control, civil rights … or climate change.

Perfect fodder for the Republicans… especially if gas prices remain high.

It could even become part of the next campaign.

So if the Republicans re-capture the House and the Senate in 2022, and threaten the Democrat Presidency, the Keystone pipeline story may not be over.

Harv Oberfeld

(Special note: deepest care and concern for all those back home impacted by the flooding, mud slides and terrible damage over the past few weeks. Thinking of you … every day.)

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9 Responses to Dispatch from America: Skyrocketing Gas PRICES May Give Keystone New Life

  1. nonconfidencevote says:

    Here comes a Recession…..

  2. DonG says:

    And if they try it will be met by radicals ready to do anything to stop it.

    https://www.msn.com/en-ca/news/canada/pipelines-will-be-blown-up-says-david-suzuki-if-leaders-don-t-act-on-climate-change/ar-AAR0ck8?ocid=msedgdhp&pc=U531

    (Response: Policies must be made by duly elected people ONLY … even if some disagree with them. Threats and intimidation or blockades or shakedowns by self proclaimed dictators must never be allowed to set policy. h.o.)

  3. HARRY Lawson says:

    Harvey,

    I may have to correct you.

    You say the price of gas has nothing to do with the climate o r environmental policies. I must disagree.

    Under the Trump administration the USA was energy self sufficient.

    They used fracking and leases on government land to attain this.

    My understanding is that the Biden administration stopped and cancelled a lot of the leases .and also raised taxes and free on exploration.

    (Response: I have seen/heard no evidence here … unfortunately (?) that the current rising gas prices in the US relate to deliberate government climate/environmental policies or goals by the Democrats or the Republicans. In fact, today Biden announced release of 50 million barrels of reserve oil to try and bring the supply up prices down. Not exactly an environmentally desirable action! h.o.)

  4. RIsaak says:

    Energy east, a similar effect on eastern Canada.

    The villa of Montreal has effectively blocked Canadian oil from the east coast, just like the State of Maine is doing to Quebec’s new hydro lines to New Hampshire.

    The US is also trying to shut down line 5, yet another reason for Canada to focus on domestic supply and distribution, alas a complete waste of time with Trudeau’s new regulations on pipelines ( after he bought kmx for foreign buyers).

    Shifting political sands have done one thing for sure, driven the costs up exponentially for all, far in excess of what carbon taxation has cost the consumer.

    Biden’s approval ratings are in a free fall, too much change mostly just for
    the sake of change, seldom results in long term stability.

    The only sure thing is increased costs for consumers, the loss of political support should be in lockstep with massive consumer price increases, history proves this simple concept time & again.

    (Response: The situation does demonstrate the difficulty of matching society’s desire for dealing with climate change and the ozone versus the reality that the vast majority of consumers and voters (NOT the ones the media show/interview) do not to pay the price for cutting back, or eliminating, fossil fuels. And politicians who force it will pay a very high price themselves … lose their jobs. Looks to me like governments are going to have to concentrate of going after polluting industries and sources … not individuals… an important lesson now playing out in the US …and likely soon in Canada too. h.o.)

  5. Keith says:

    Trump approved XL in 2017 and with all levels of the administration republican, republican governors all the states of the new pipeline route – Montana, N. And S. Dakotas to Steele City Nebraska they couldn’t get the pipeline through due to the legal challenges and weren’t that bothered as they had the tax cut. Then in June 2020 the U.S. supreme court blocked the construction pending further reviews and appeals.

    https://www.cnn.com/2020/07/06/politics/keystone-xl-supreme-court-pipeline/index.html

    Biden saying he wouldn’t approve it was a tad empty as it wasn’t going anywhere, but got him the enviro. vote

    If the house and senate in 2020 go republican and approve X.L. there still may not be enough votes to overrule a Biden veto, assuming the Supreme court decision is no longer in place, and if in 2024 there is a republican president, the legal challenges start all over.

    If X.L. finally gets built great for Alberta but would it make any difference to U.S prices.? Not for years and if at all as OPEC calls the shots on oil pricing and production and at present they are making up for lost revenues when a year ago oil prices were at one point in negative territory. The U.S. and other countries dumping some of their reserves into the system won’t make a tad of difference, all Russia and Saudi do is cut back on their production to keep the prices high, nor can I see any level of U.S. govt. putting the squeeze on the oil companies. There goes the donations that go to both parties.

    Amazing to see the epitome of free enterprise and capitalism whining and then complaining “that govt. should do something” when the law of supply and demand isn’t in their collective favour.

    (Response: We all know world oil prices are controlled/manipulated. I believe the addition of 168 Billion barrels into the US market WILL affect supply … and therefore prices as well. The Saudis in particular do not like competition and would increase flow and lower prices to retain their share of the market. So it sure couldn’t hurt … not to mention the economic boost to Alberta and Canada. h.o)

  6. Stu de Baker says:

    Ok, ok, I get it. You are reporting on a mood and American-centrism is very much on display.
    https://en.wikipedia.org/wiki/Americentrism

    But where is the “skyrocketing”?
    “Gas prices in the US now approach $4 to as high as $5 (US) a gallon in many states.”

    https://gasprices.aaa.com/state-gas-price-averages/

    As of Nov. 28-2021 the national average was US$3.39 per gallon, which is equal to C$1.20 per litre. Florida was at $3.34.

    From that same AAA piece, no state hit $5.00 for regular gas and only two (CA $4.71 and HI $4.36) hit $4.00. Hardly “many states.”

    “In the Fort Lauderdale area , where I am now visiting, regular gas is now averaging up $3.59 a US gallon … where $2.73 or less used to be the norm.”
    https://www.wfla.com/news/hillsborough-county/florida-gas-prices-nearing-highest-level-in-7-years/
    According to that article, the price in 2014 was $3.39 per Gallon, so these prices are nothing new. Short memories serve well.

    (Response: Apparently, Americans see their reality differently than you…. regular gas selling as high as $5.99 a gallon …US!!! Sure looks like skyrocketing to me…https://www.cincinnati.com/story/news/2021/11/10/gas-buddy-gas-prices-increase-november-2021/6367280001/. And …. USA Today reported: “California continues to top the nation’s most expensive markets at $4.62 a gallon, followed by Hawaii ($4.33), Nevada ($3.95), Washington ($3.87), Oregon ($3.77), Utah ($3.72), Alaska ($3.71), Idaho ($3.69), Washington, D.C. ($3.61) and Illinois ($3.60). And I guess Americans are not buying your spin: “Pain at the Pump Drives Biden’s Suffering at the Polls” said Politico …. https://www.politico.com/news/2021/11/17/gas-prices-biden-inflation-522777. h.o.)

  7. Gilbert says:

    I can’t say I’m surprised. Politicians like Joe Biden and Justin Trudeau know nothing about economics or how to improve an economy. It looks highly unlikely President Biden will run for re-election.

    (Response: He says he will …but I agree with you, he will not. Will probably blame health problems. And I wouldn’t bet on Kamalla Harris either. h.o.)

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