It is very easy to understand gasoline pricing — you drive up to the pump, study the price of different grades of gasoline, insert your card, and pump your gas.

[The price of gas taken together with the price of groceries makes one as intimately knowledgeable of the state of inflation in America as a Nobel Laureate economist.]

Today, when you fill up it costs about twice what it did when Joe Biden was elected President.

But, what really controls the price of gasoline? Is it crude oil prices?

Get on with it, Big Red Car

Fine, dear reader, let’s do.

 1. When Joe Biden was elected, US crude oil production was 13.1MM bbl/day which was about 1MM bbl/day more than US domestic demand for crude.

[In this discussion be careful to recognize when we speak of crude oil v gasoline which is a refined product that comes from crude.]

  2. US domestic demand for gasoline had been dampened — lowest since 1995 — by the COVID pandemic that had Americans consuming far less gas than usual because everybody was staying home and nobody was going out to eat, entertain, travel. Makes sense, no?

 3. The international price for crude oil is set by those who have oil available to export/sell — typically this was the OPEC nations in the Middle East.

 4. When the US was a net exporter of crude oil and refined products, the US had a thumb on the scale of crude oil pricing through its excess crude sales.

If OPEC tried to jack up prices, buyers bought American oil (and liquified natural gas).

Crude oil prices were low because the world had an excess of production, including the United States and the US was an honest broker rather than a predatory pricer. This is the big point.

 5. We, the United States, became energy independent — produced more crude oil than domestic demand — during the Trump admin when daily production went from 8.4MM bbl/day to 13.1MM bbl/day.

Do not understate the importance of American energy independence.

It did not happen over night or by accident. Trump, big bad mean Tweeting Trump, did this.

Come on, Big Red Car

Doubt it, do you? What did Joe Biden do when he came into office?

 1. When Joe Biden came into office with a razor thin victory (on the wings of COVID and being the non-Trump) he immediately squared his account with the Green Wet Dream crowd by cancelling the Keystone XL pipeline that would have delivered 900,000 bbl/day of Canadian tar sands crude to refineries in the US that had more than enough capacity to refine it.

Already under construction, the Keystone XL pipeline would have come on line within less than two years.

 2. Brandon also shutdown Federal lands new leases, auctions, fracking, and reversed/enacted rules that sent a shiver through the energy industry.

 3. Brandon also banned exploration in ANWR in Alaska, a huge future source of crude oil.

 4. The industry — like anybody who has taken a boot tip to the nuts is prone to do — stepped back, took a deep breath, and stopped spending capital in an industry that requires constant capital expenditures to maintain the current level of production.

 5. Production plummeted — PLUMMETED — going from 13.1MM bbl/day to less than 10MM bbl/day in less than 3 months. Hello, America!

The explosion in gas prices was the result of these discrete actions effectuated by a President who doesn’t care about the consequences because high gas prices drives the Green Wet Dream. He doesn’t care.

To make it worse, the COVID scare began to fade and people began to drive again and the demand for gasoline at the pump went up. Boom!

How do we fix it, Big Red Car?

Sorry, I don’t think we can. I think the only chance — ONLY CHANCE — would be for President Biden to reverse his disastrous policies. Hahahahaha. I can’t believe I wasted the effort to actually write that.

Can you see that happening? No, you can’t and neither can I.

Sen Joe Manchin has called for his President to reverse his policies, and Sen Joe Manchin holds a key vote on the impending Build Back Bolshevik Bill, but it isn’t going to happen.

Manchin WILL kiss the ring. Oh, yeah.

Bottom line it, Big Red Car — Georgia football is on shortly

OK, here’s the bottom line.

 1. Joe Biden did this to the country with discrete decisions to pay off the Green Wet Dream. None of this is an accident. It is bad policy.

 2. His actions — his policies — have triggered massive contraction in the energy business destroying America’s energy independence setting off an orgy of rising prices starting with gasoline.

 3. This is not a head fake. This is a pathway to DOUBLE DIGIT INFLATION (PPI is at 8.6%) and a massive retrenchment of American buying power, an insidious tax on everybody that will create enormous pain.

 4. The largest spending bill in the history of the United States coupled with the largest tax increase in the history of the same United States will be like pissing gasoline on the fire.

 5. The whole recipe is this — massive inflation, slowing growth, horrendous supply chain issues, and rising interest rates. Joe Biden is about to make Jimmy Carter look like a great President, a virtually impossible feat.

This is going to get very dicey — very, very, very dicey. Remember where you heard it.