As gas prices ease, US now has to deal with diesel crisis

Breanne Deppisch

November 14, 06:00 AM November 14, 06:53 AM

As the United States took steps to alleviate high gas prices this year, the cost of diesel, another key commodity, has been quietly climbing for months thanks to a supply crisis that threatens to extend to nearly every corner of the U.S. economy this winter.

The surge in diesel prices is due to a sharp imbalance between refining capacity and global demand.

NORTHEAST CAREENING INTO ‘WHAC-A-MOLE’ WINTER ENERGY CRISIS

In the U.S., distillate inventories have dropped to their lowest point since 1951, according to the Energy Information Administration, but demand is roughly four times that level.

The scarcity has sent diesel prices climbing 43% higher in the last year, compared to just 15% for gasoline.

National diesel costs are expected to average around $6 per gallon this winter — or worse if the weather gets colder, said Mark Wolfe, the executive director of the National Energy Assistance Directors Association.

“Going into winter, if and when it gets cold in the Northeast … a [cold spike] could cause prices to jump by $8, $10, even, [per] gallon,” Wolfe said.

The uptick in diesel prices is the result of multiple factors — among them low inventories of distillate fuel oil, both in the U.S. and globally, as well as increasing demand, lower production, and higher transportation costs for the commodity.

There’s also been a drop in production from the U.S. and China, the world’s top two diesel refiners, each producing at less capacity than they were compared to pre-pandemic levels.

The U.S. has shut down or repurposed a number of its refineries in the past two years, and those that are still operational produced a total of 17% less fuel this year compared to the five-year average, according to government data.

And while China does have available refining capacity to spare, it is prohibited from exporting additional fuels due to stringent domestic policies unlikely to abate anytime soon.

The U.S. also banned Russian gas imports, further cutting into domestic supply.

Prior to the war in Ukraine, the U.S. was importing roughly 700,000 barrels of petroleum from Russia each day and has yet to make up for that loss.

In the meantime, analysts say high distillate fuel prices will be felt in nearly every major U.S. industry. Among the most impacted will be farmers, truckers, and households in the Northeast, which rely heavily on home heating oil to heat their homes.

According to the EIA, residents who rely on home heating oil will spend an average of $2,354 to heat their homes this winter — a 27% increase from the previous winter and the highest price point in more than 25 years.

And since analysts don't expect distillate markets to return to normal until next summer at the earliest, the U.S. is in uncharted territory, at least for the foreseeable future.

“This is the first time, really, that one fuel has jumped so high before" and has so directly upended the lives of consumers, Wolfe said.

Biden's drilling and coal comments expose Democratic rift days before election

Haisten Willis

November 08, 03:00 AM November 08, 03:00 AM

President Joe Biden exposed a rift within the Democratic Party just two days before an election with his off-the-cuff pledge to approve "no more drilling. "

At the end of a rally with embattled Gov. Kathy Hochul (D-NY), Biden made apparently spontaneous comments to a heckler and opened up another midterm headache for his party.

MIDTERM ELECTIONS COULD LEAVE BIDEN FACING CONSERVATIVE CONGRESS AND SUPREME COURT

"No more drilling,” he said, waving his hand with a back-and-forth motion. “There is no more drilling. I haven’t formed any new drilling.”

The remarks come on the heels of a spat Biden started with Sen. Joe Manchin (D-WV) by saying he's going to shut down coal plants across the country and appear to directly contradict comments the president made just days before.

At an election rally in New Mexico on Thursday, Biden bragged that his administration hadn't slowed down any oil leases in the state and said energy companies "should be drilling more than they're doing now. If they were drilling more, we'd have more relief at the pump."

Some Republicans pointed to Biden's New York comments as confirming a hidden truth — that Democrats want gas prices to go up in order to force a transition to green energy.

"Biden just admitted his anti-American oil & gas agenda,” Rep. Steve Scalise (R-LA) tweeted. “Not even his allies in the media & the phony fact-checkers will be able to cover for him on this now. It came straight out of his mouth.”

House Oversight Republicans released a report detailing "Democrats' war on American energy" the following morning.

But the conflict within his own party may prove more problematic for the president. Manchin released a scathing statement after Biden pledged to shutter coal plants, which are a major economic driver in West Virginia.

"President Biden’s comments are not only outrageous and divorced from reality, they ignore the severe economic pain the American people are feeling because of rising energy costs," Manchin said. "Comments like these are the reason the American people are losing trust in President Biden and instead believes he does not understand the need to have an all-in energy policy that would keep our nation totally energy independent and secure."

Across the border in energy-rich Pennsylvania, both anti-coal and anti-oil comments could be problematic in the crucial Senate race between Republican Mehmet Oz and Democrat John Fetterman, who has been vague at times about his own support for fracking.

Biden's latest remarks promising to end new oil drilling could add to the midterm headaches, as gas prices have risen sharply during his time in office, and some blame his anti-oil policies for contributing to the surge. The average price of a gallon of gas was $2.31 when Biden took office. It peaked above $5 per gallon this summer and sits at $3.80 now, according to AAA.

BIDEN PROMISES 'NO MORE DRILLING' BEFORE ELECTIONS — HERE'S HIS RECORD

Detractors have blamed the president for helping drive up the price, and in turn he has tapped the Strategic Petroleum Reserve and taken other measures to make gas cheaper. Biden met with Saudi Crown Prince Mohammed bin Salman over the summer, which generated its own round of controversy, and the kingdom announced later it was cutting production.

Samuel Abrams, a senior fellow at the American Enterprise Institute, said Biden may be saved by the fact that the remarks came so close to the end of the midterm elections, with millions of early ballots already cast, and during a relatively low-profile Sunday night appearance. Still, it is indicative of a major intraparty spat.

"Democrats are not aligned on this issue at all, that's been a big problem for the party for years now," said Abrams, a professor at Sarah Lawrence College, where the rally took place. "In Biden's case, it could be a sign of his age, perhaps not even remembering the contractions. ... This would not be the first time the White House has tried to walk back his comments."

White House press secretary Karine Jean-Pierre responded to a question from the Washington Examiner during Monday's press briefing by repeating previous statements about approved drilling permits that remain untapped by the industry.

The dispute may prove to be more symbolic than real, argues Cato Institute senior fellow Peter Van Doren, due to nuances about onshore vs. offshore drilling and the fact that drilling on private land is now more important than that done on public land.

But the issue remains politically volatile, especially so long as elevated gas prices remain top of mind for voters.

A Trafalgar Group poll found that 54.4% of voters say rising gas prices will make them more likely to choose Republican candidates in the 2022 midterm elections, including 55.5% of independents. Another poll, from the New York Times, found that voters who were focused on the economy and inflation favored Republicans over Democrats 64% to 30%.

Biden suggests critics of significant gas prices ready to take 'Putin's iron fist'

Christian Datoc

June 24, 07:00 AM June 24, 07:01 AM

President Joe Biden debuted a new messaging tactic that seeks to reframe the gasoline discussion in a method that shields the White Dwelling from criticism more than traditionally superior charges at the pump.

For months, Biden experienced blamed the present inflationary operate, specifically skyrocketing fuel and diesel fees, on Russian President Vladimir Putin's choice to wage war from Ukraine.

ON GUNS AND Gasoline, BIDEN PUNTS Major Concerns TO CONGRESS

For the duration of his Wednesday remarks calling for a 3-thirty day period suspension of federal gasoline and diesel taxes, the president reiterated that rhetoric but additionally sought to declare that criticism raised by Republican lawmakers about how Biden's technique had led to increased gas costs amounted to a deficiency of aid for Ukraine — or even complicit assistance of Russian aggression.

"The American individuals understood. The American folks rose to the instant. The American persons did what they usually have performed: protect independence all-around the globe. They chose to stand with the persons of Ukraine," Biden claimed. "So for all individuals Republicans in Congress criticizing me today for significant gasoline charges in The us, are you now indicating we were being erroneous to help Ukraine? Are you indicating we were completely wrong to stand up to Putin? Are you expressing that we would alternatively have decreased fuel selling prices in The us and Putin’s iron fist in Europe? I do not believe that that."

"If we did stand by, Putin would not have stopped. Putin would’ve held heading, and we’d confront an even steeper price tag, and it was not just me," he continued. "Glance, I get the quick politics of the attack. I get that. But the basic reality is fuel prices are up practically $2 a gallon mainly because of Vladimir Putin’s ruthless attack on Ukraine, and we wouldn’t let him get absent with it. And we’re undertaking every thing we can to minimize this suffering at the pump now."

Biden's Wednesday opinions also appear as the White House is struggling to defend its procedures in the face of rampant inflation as the midterm election cycle kicks into comprehensive equipment.

Reporters have regularly pressed White Dwelling push secretary Karine Jean-Pierre in latest months in excess of the president's and the administration's look at of the economy specified the unfavorable sentiment expressed by voters and the subsequent adverse economic alerts posted from in just the federal governing administration.

"The truth is, we are in a fundamentally different location as opposed to when the president took office and as opposed to this time a year back," she explained to reporters during a briefing in early June in protection of Biden's economic selections. "In the course of this presidency, people today felt unsure about the economic climate frequently, but they basically felt as excellent about their personal money predicaments as they at any time have, in accordance to the Federal Reserve survey, with practically 80% of grown ups reporting that they are monetarily relaxed. So that matters as perfectly."

A quantity of Democratic officials, on the other hand, have expressed worries for months about Biden's fixation on tying inflation to Putin somewhat than making an attempt to confront economic uncertainty immediately.

"No just one is going to have to vote on Vladimir Putin whenever before long," a single Democratic strategist informed the Day by day Mail on the subject.

Biden's new gasoline strategy focusing on Republicans does tumble in line with his earlier endeavours to blame financial woes on the GOP and feedback senior Democratic officers have earlier provided to the Washington Examiner.

The president has ramped up assaults on a tax program put forth by Countrywide Republican Senatorial Committee Chairman Rick Scott (R-FL) in purchase to assert that Republicans will transfer to increase taxes on reduced- and center-income people today ought to the celebration take back congressional majorities in November.

"Most folks are not tuned into the each day happenings in D.C., but they are understandably tuned into what is actually taking place in their genuine-environment life," one particular senior Democratic official previously explained to the Washington Examiner with regards to the problem. "We're a little around six months out, and we're speaking about how all people who wants a position can get a work suitable now, but the American folks are frustrated — I do not think any person is denying that — with fuel rates, with inflation."

In the meantime, the president himself has expressed more stress of late above his poll quantities and incapacity to communicate his economic wins to voters efficiently.

He explained to Jimmy Kimmel for the duration of an job interview in late May that "there is a lot of main matters we have finished, but what we haven't finished is we have not been ready to connect it in a way that is—" at which position Kimmel included, "Which is ideal."

The president additional, "A single of the factors that is quite challenging now is to have, even with notable exceptions, even with genuinely excellent reporters, they have to get some fast clicks on [the] nightly news, so instead of asking the query — in any case, it just — every thing will get sensationalized."