The Biden administration is weighing its options to deal with fuel and natural gas shortages that have caused prices to surge in recent weeks ahead of the winter season, said White House press secretary Jen Psaki on Wednesday.
“The president has asked his economic team, as they do on any range of issues impacting the public, to continue to discuss what the options are that we can take to address these shortages,” Psaki said during a news briefing.
Without elaborating, Psaki said that she is “not in a position yet to outline additional steps we can take” and said there is a “range” of steps the Biden administration can take.
The U.S. average for gas prices was $3.288 per gallon as of Wednesday, according to the American Automobile Association (AAA). The Energy Information Administration (EIA) warned (pdf) that the cost of heating oil is expected to rise about 43 percent compared to last year due to “higher expected fuel costs as well as more consumption of energy due to a colder winter.”
The agency expects propane to rise by 54 percent, natural gas costs to rise by 30 percent, and overall electricity costs to rise by about 6 percent. The average U.S. household could spend around $1,734 in heating oil during the 2021 to 2022 winter season, which is up from about $1,210 during the past winter season.
“As we have moved beyond what we expect to be the deepest part of the pandemic-related economic downturn, growth in energy demand has generally outpaced growth in supply,” EIA acting Administrator Steve Nalley said. “These dynamics are raising energy prices around the world.”
U.S. crude oil this week reached $80 a barrel for the first time in seven years, as the Organization of the Petroleum Exporting Countries (OPEC) started restricting output.
On Wednesday, Psaki responded to reports claiming Biden administration officials are meeting with oil and gas companies, saying she is not aware of any discussions between the administration and energy companies.
The spike in energy prices—namely gas—is sure to trigger even more criticism against the Biden administration. Republicans and industry groups have faulted President Joe Biden for moving to suspend construction of the Keystone XL pipeline, aggressively pushing for electric vehicles and renewable energy sources, and later asking for more crude oil production from OPEC and Saudi Arabia rather than depending on domestic production.
In 2019, oil production hit a record of nearly 13 million barrels per day. But the Energy Department on Wednesday stated that output will average only 11 million barrels per day in 2021 before rising to 11.7 million barrels per day in 2022.