The issue of fossil fuels vis a vis the government is another complicated situation. A lot of people blame the Biden administration for the high fuel costs, and while they do bear some responsibility; its not entirely their fault as often claimed. Did their actions cause the spot price for oil contracts to rise? Absolutely. What people claiming them blameless don't understand is that oil is a commodity. The prices in commodity markets are determined by a variety of factors, and not all of them are hard facts. When an administration clearly states they are gong to end fossil fuels and then takes steps to show they are serious its going to cause those commodity traders to start bidding those contracts up, and the price of oil to rise.
However, we have a perfect storm with fuel prices right now. Back in 2020 when the nation basically shut down during the pandemic the bottom fell out of the oil market in a way that's never happened before. Demand contracted so sharply in a market where demand is often looked at as more or less inflexible, that for the first time in history oil contracts went negative. The price for a 3 tanker contract became -$30,000, meaning they would literally pay you $30,000 to take the oil. Understand that those contracts are never meant to be realized by those traders. They have no interest in the actual oil. Their goal is to buy that contract low and sell it high without ever touching anything. The problem was that there was so much oil on hand and no place to store it that basically no one wanted to buy it and commodity traders were trying to do anything just to get rid of it. The instant that happened I knew that we were going to see fuel prices rise once the pandemic ended. Oil companies were not going to lose money, at least not long term, so there was going to be profit taking once they could do it without fear of being labeled pandemic profiteers, and once they ran through their excess inventory. So some of the price we are paying now is just that: oil companies making back the profits they lost in 2020-2021.
There is another major factor no one is talking about and that's why Diesel is so high, and what the future of that looks like. The world supply of Diesel right now is so low the last time we had this little the world had half its current population. There was also a worldwide agreement on marine Diesel called IMO2020, which almost no one talks about. It didn't make headlined because in 2020; it didn't matter. Basically its made it necessary to produce two distinct types of Diesel fuel, one for on the road use and another for marine use. This means infrastructure changes and the inability to use Diesel universally in all markets, basically making a scarce commodity scarcer.
A lot of folks are saying "just make more fuel". Oh, that it were that simple. Unfortunately, we really can't with our current infrastructure. We haven't built a new refinery since 1977, and the ones we have are running at 95% capacity, which factoring in time for maintenance shutdowns is about the realistic max.
Other folks say "just become self sufficient and use only American oil in America". We don't want to do that for two reasons. First, American oil is expensive to produce. We keep our domestic cost down by importing relatively cheap oil and exporting relatively expensive oil to China. Second, all crude isn't the same. Some crude is turned more readily into different fuels, so we tend to want the crude that produces the most of the fuels we use in the US, and US crude often isn't it. Now, we could realize a net cost reduction by exporting more than we import.
There's a lot of talk about excise taxes too. Truth is the average gallon of fuel is $0.60 tax more or less depending on your state. Removing this tax would obviously drop the price, but the money lost by the government is going to come from somewhere so that's probably a bad idea.
As for forcing us to go electric, well, CA is already doing that. Legislation passed that no more new gas cars can be sold after 2025. They've also mandated an end to fossil fuels for heat, hot water, and cooking in new homes. As for cutting off supply, I don't see it, but without a unified national energy policy that doesn't change with the fickle winds of elections why wold the oil industry invest in infrastructure? Refinerys are multi billion dollar investments. No smart business person would make that kind of investment, with a 3-5 year timeline for completion when the government could change the rules mid process. Therefore, the government IS driving up prices by being fossil fuel averse. However, the issue remains, what replaces Diesel fuel in this electric utopia? Anyone see an electric tractor trailer? Cargo ship? Yeah, me neither. So long as those ships burn 60,000 gallons of Diesel a day and there's no alternative we are stuck with fossil fuels whether our government likes it or not. Ultimately while they can certainly make it more expensive, and are, you can't stop using something you need when there's no alternative.
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