Oil and Gas Companies Aren’t to Blame for Pump Prices
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Under the guise of lowering gas prices, Democratic leadership in the House and Senate is ramping up legislation-creation efforts and railing against oil and gas companies, according to POLITICO Pro (subscription), The Wall Street Journal (subscription), E&E News (subscription), Punchbowl News, CBS News and Bloomberg (subscription).
What’s happening: In fact, gas prices are dramatically on the rise owing to a combination of factors, including lowered U.S. production, the same supply chain issues that have disrupted the shipment of other goods, limited production by OPEC countries, continued fallout from cyberattacks and Hurricane Ida, a shortage of tanker drivers and more, according to CBS News.
- But the situation is neither as black and white nor as predictable as President Biden would have it.
- “Individual retailers set gas prices based on what they expect their future fuel deliveries to cost,” reads the Journal editorial. “But they have no clue right now due to all of the global uncertainty. Oil prices have plunged this past week in part because the United Arab Emirates said it would urge OPEC to pump more. But the cartel might not.”
Accusation from the Senate: “‘Over the past few days, oil prices have actually been decreasing, but the price of gas at the pump has not,’ Senate Majority Leader Chuck Schumer said Wednesday,” according to the POLITICO Pro piece.
The House, too: Rep. Frank Pallone (D-NJ), chairman of the House Energy and Commerce Committee, this week asked representatives from six oil companies to testify before his committee about why they were prioritizing “their own profits” by keeping gas prices “artificially high,” according to POLITICO Pro.
Democrats’ tax ideas: Congressional Democratic leadership has floated gas price-reduction suggestions, including the following:
- Gas tax “holiday”: The White House recently weighed in on this proposal, which would temporarily eliminate the 18.4-cent-per-gallon federal gas tax that funds infrastructure building as a means of lowering costs to consumers.
- Lease cancellation: “There’s also a proposal floating around Democratic leadership circles to enact legislation canceling oil companies’ federal leases unless they’re actively drilling,” according to the Punchbowl News article. “One Democratic source called this ‘use it or lose it.’”
- “Windfall profits” tax: Rep. Peter DeFazio (D-OR), chairman of the House Transportation and Infrastructure Committee, is pushing for an idea similar to the one floated earlier this month by Sens. Sheldon Whitehouse (D-RI) and Elizabeth Warren (D-MA) to enact a per-barrel tax on oil and gas companies. The Whitehouse tax would be equal to 50% of the difference between the current Brent crude price and the average crude price from 2015 to 2019, according to the Bloomberg piece. (Read the NAM’s response to that proposal here.)
But some Democrats aren’t so naive: “Is there normally a lag between a change in [crude oil] price and the price at the pump? Yes. The energy production system is complex and has many stages in the chain, and the volatility of the price per barrel has been huge in recent weeks,” Sen. Chris Coons (D-DE), who is close to President Biden, told POLITICO.
- Senate Energy and Natural Resources Committee Chairman Joe Manchin (D-WV) also expressed skepticism according to E&E News.
- “I have no problem bringing [oil executives] in to basically explain how the process works…we can all understand it a little better, rather than beating people up who are expected to provide the energy we need,” Sen. Manchin said Wednesday.
The Journal’s take: “President Biden is adopting Donald Trump’s habit of venting his political frustrations on Twitter,” according to a Wall Street Journal editorial this week. “‘Oil prices are decreasing, gas prices should too,’ Mr. Biden tweeted Wednesday. ‘Oil and gas companies shouldn’t pad their profits at the expense of hardworking Americans.’ Sorry, Mr. President. There’s no vast industry conspiracy to raise gasoline prices.”
The NAM says: “Americans are tired of partisan grandstanding and pass-the-buck politics,” said NAM Vice President of Energy and Resources Policy Rachel Jones. “Each of these ideas might look a little different, but they would all have the same result, and none of them would help with inflation.
- “Demonizing the very people we need to produce more domestic energy is a dangerous recipe for shipping jobs overseas and making dictators stronger. And manufacturers know that in the end, these bogus ‘make-someone-else-pay’ schemes always come back to haunt us. When we sacrifice our energy security, prices go up, global emissions go up, China gets stronger, and we become weaker.
- “Instead, we need to remove any roadblocks in America to increasing domestic energy supplies and building out our energy infrastructure, which, by the way, includes renewables as well as domestic oil and gas exploration, nuclear, biomass, hydro and other new energy sources. Now is not the time to fight about favorites; it’s time to stand strong behind all energy options and focus on our drive to sustainability and energy security.”
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Manufacturing Associations Launch Coalition to Curb Regulatory Onslaught in Washington
Sector Requests Senior-Level Adviser Designated to Coordinate Efforts Among Agencies Within the White House
Washington, D.C. – Today, the National Association of Manufacturers, members of the NAM’s Council of Manufacturing Associations and Conference of State Manufacturers Associations launched Manufacturers for Sensible Regulations, a coalition addressing the impact of the current regulatory onslaught coming from federal agencies.
According to the NAM’s Q2 2023 Manufacturers’ Outlook Survey, more than 63% of manufacturers report spending more than 2,000 hours per year complying with federal regulations, while more than 17% of manufacturers report spending more than 10,000 hours.
“President Biden and Congress have prioritized strengthening the manufacturing sector in America through historic legislation like the Bipartisan Infrastructure Law, the CHIPS and Science Act, initial permitting reform actions in the Fiscal Responsibility Act and even some energy provisions in the Inflation Reduction Act,” said NAM President and CEO Jay Timmons. “Unfortunately, the continued onslaught of regulations is having a chilling effect on investment, curtailing our ability to hire new workers and suppressing wage growth, especially for small and medium-sized manufacturers. The recently released regulatory agenda from the administration shows this barrage isn’t stopping.”
“Washington is creating tremendous doubt across our sector at a time when we’re still dealing with economic uncertainty. And the unbalanced regulations coming out of this administration threaten to undermine our ability to grow, compete and win on a global scale,” said American Cleaning Institute President and CEO, NAM board member and CMA Chair Melissa Hockstad. “We want President Biden’s manufacturing agenda to succeed. Unfortunately, we are seeing the signs that the regulatory agenda is jeopardizing the investments enacted over the past 18 months.”
“U.S. pulp and paper manufacturers recognize the need to address the challenges of our changing climate and share the administration’s goal to secure a more sustainable future,” said American Forest & Paper Association President and CEO Heidi Brock. “This can only be achieved by working with—not against—manufacturers to craft achievable and balanced regulations that address environmental challenges without threatening manufacturing jobs.”
“Manufacturers have proven to be extraordinarily resilient in recent years, leading Utah and the entire country coming out of the pandemic and through times of geopolitical turmoil,” said Utah Manufacturers Association President and CEO, NAM board member and COSMA Chair Todd Bingham. “But the regulatory agenda currently coming out of our nation’s capital has the potential to derail the gains we’ve made during this administration. We will work with our state partners and the White House to find solutions to help grow our sector in the most responsible way possible.”
The NAM survey also highlighted that only 67% of manufacturers are positive about their own company’s outlook, the lowest since Q3 2019. It shows the consequences of regulations: If the regulatory burden on manufacturers decreased, 65% of manufacturers would purchase more capital equipment, and more than 46% would increase compensation.
The group has been meeting with key members of the Biden administration and Congress to highlight the devastating impact of unbalanced regulations.
-NAM-
The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs nearly 13 million men and women, contributes $2.90 trillion to the U.S. economy annually and accounts for 55% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.
-CMA-
With a membership including 260 national manufacturing trade associations representing 130,000 companies worldwide, the Council of Manufacturing Associations creates partnerships across the industry, amplifies manufacturers’ voices and connects members to experts and trade association executives. CMA members gain insights, share perspectives, form coalitions and ensure manufacturers have a strong voice in national policy.
-COSMA-
Members of the Conference of State Manufacturers Associations serve as the NAM’s official state partners and drive manufacturers’ priorities on state issues, mobilize local communities and help move federal policy from the ground up in all 50 states and Puerto Rico.
House Majority Whip Emmer, NAM Spotlight Cost of Regulations and Policies to Boost Manufacturing
Princeton, MN – The National Association of Manufacturers hosted House Majority Whip Tom Emmer (R-MN) at Glenn Metalcraft for a facility tour on Monday to discuss the impact of the current regulatory burden manufacturers are facing across federal agencies.
Leaders also discussed manufacturers’ policy priorities as outlined in the latest version of “Competing to Win,” the NAM’s comprehensive blueprint to bolster manufacturers’ competitiveness.
“My visit to Glenn Metalcraft demonstrated the need to address the regulatory state overwhelming manufacturers in the heartland. Small and medium-sized manufacturers are working hard to grow their businesses and increase compensation for employees, but those efforts are undermined by new regulations and the lack of permanent, competitive tax policies to promote research and development and capital investment,” said House Majority Whip Tom Emmer. “I want to thank the National Association of Manufacturers and Glenn Metalcraft for providing insight that will guide my work in Congress.”
“Manufacturers across the country are fighting to thrive under the weight of an increasing number of unbalanced and often unfeasible regulations from agencies across the federal government—all amid an uncertain economic environment,” said Glenn Metalcraft President and CEO Joe Glenn. “Glenn Metalcraft would like to thank Whip Emmer and the National Association of Manufacturers for giving us a voice and calling attention to this issue.”
“Manufacturers are struggling to navigate substantial regulations from Washington on top of the deluge of new laws from St. Paul. We appreciate Whip Emmer for expanding our state-level efforts on the national stage,” said Minnesota Chamber President and CEO Doug Loon. “The National Association of Manufacturers is an excellent partner in championing policies for businesses to grow and compete globally. We appreciate their efforts with the Biden administration and Congress to hold agencies accountable and deliver sensible regulations.”
“The barrage of federal regulations from Washington has created serious concern across our industry, with manufacturers reporting that it’s standing in the way of job creation, investment and wage growth. Manufacturers have made it clear that the administration’s regulatory agenda could easily derail manufacturing’s recent success. Glenn Metalcraft and so many others are forced to make tough decisions as agencies issue unbalanced regulations that threaten our sector’s ability to grow and compete,” said NAM President and CEO Jay Timmons. “The positive effects of tax reform, the Bipartisan Infrastructure Law and the CHIPS and Science Act are all being undermined by the growing regulatory burden, and I want to thank Whip Emmer for spotlighting this threat in his home state of Minnesota.”
Background: Recently, the NAM, members of the NAM’s Council of Manufacturing Associations and Conference of State Manufacturers Associations launched Manufacturers for Sensible Regulations, a coalition addressing the impact of the current regulatory onslaught coming from federal agencies.
According to the NAM’s Q2 2023 Manufacturers’ Outlook Survey, more than 63% of manufacturers report spending more than 2,000 hours per year complying with federal regulations, while more than 17% of manufacturers report spending more than 10,000 hours. The NAM survey also highlighted that only 67% of manufacturers are positive about their own company’s outlook, the lowest percentage since Q3 2019. It shows the consequences of regulations: If the regulatory burden on manufacturers decreased, 65% of manufacturers would purchase more capital equipment, and more than 46% would increase compensation.
-NAM-
The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs nearly 13 million men and women, contributes $2.90 trillion to the U.S. economy annually and accounts for 55% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.