By Mark Sumner — June 9, 2022
So far in 2022, national gas prices have averaged $3.77 for the year. That number is almost certain to go up; current prices are hovering around $4.70. Efforts to restrict Russia’s access to the global oil market are creating a shortfall that currently has oil trading at around $120 per barrel. But no matter how many times somber newsreaders talk about these record highs, the truth is, we’ve been here before—and not that long ago.
There have been several points in the past where the price of gas was well above the equivalent of $4 in current cash. That includes 2008, when the average over the whole year was $4.32, and 2012, when it was $4.47. That’s not a one-week high—in both years, inflation-adjusted prices were above the current level for brief periods—that’s an average across the whole year.
Here’s a graphic you’re unlikely to have seen on the news when the Very Serious People are making vague statements about how President Biden’s policies have affected oil prices.
graph of oil production
Oil production crashed under Trump after years of steady increases under Obama
The greatest single drop in U.S. oil production in history happened under Donald Trump. This came even as Trump was chopping away environmental regulations and delaying higher requirements for automobile mileage. It happened in spite of Trump authorizing pipelines and drilling in the Arctic National Wildlife Refuge, and opening up national parks to exploitation. It happened because Trump so mismanaged the economy under the pandemic that not even his favorite industry could avoid taking a nose dive.
Trump’s handling of the economy was so chaotic that it created a disruption in oil production from which the industry has still not recovered. That’s something that both Republicans and the media pretend never happened.
Since Trump left office, U.S. production has gone up, not down. The fact that prices were increasing before Russia’s invasion is explained by two simple facts: 1) Speculators were already doing what they do—speculating—by guessing that Russia was going to invade, and 2) Joe Biden’s economic policies were driving up growth in the U.S. generating a rising demand for oil.
In addition to driving the economy off yet another Republican cliff, Trump contributed to those prices at the pump in another big way. President Obama had put in place fuel efficiency guidelines that required 5% increases each year through 2026. Under Obama, manufacturers would have been required to reach 54.5 mpg efficiency for both cars and light-duty trucks by model year 2025. Current efficiency requirements would be 48 mpg.
But as soon as he reached office, Trump began the process of rolling back those requirements. It became official in 2020, but the Obama requirements were never applied by the Trump Department of Transportation under Elaine Chao (Mitch McConnell’s wife). Under Trump, automakers had until 2026 to reach just 32 mpg. Over the course of his four years in the White House, the requirements for light trucks increased just over 1 mpg.
