Gas prices are on the rise nationally with just weeks until the midterm elections. President Joe Biden and his Democratic allies, fearing political fallout, are starting to panic — and are now reportedly considering a drastic policy response that would actually make everything worse.
“White House officials have asked the US Energy Department to analyze the possible impacts of a ban on exports of gasoline, diesel and other refined petroleum products, an indication that the controversial idea is gaining traction in some parts of the Biden administration,” Bloomberg reports.
This isn’t the Biden administration’s first flirtation with restricting gas exports. The idea is simple: By preventing companies from selling overseas, we’d have more here domestically and, hopefully, lower prices.
But the economy’s actual workings aren’t so simple. Industry executives and detached experts alike have explained why this move would likely backfire — spectacularly.
“Banning or limiting the export of refined products would likely decrease inventory levels, reduce domestic refining capacity, put upward pressure on consumer fuel prices, and alienate U.S. allies during a time of war,” oil industry insiders warned in a letter to the Biden administration this week.
You don’t have to take their word for it.
A study from the Dallas Federal Reserve analyzed the idea and concluded that “there is no reason to expect that U.S. consumers would benefit from such a ban.” Why?
“One important point this proposal overlooks is that the prices of gasoline and diesel in the United States are determined by their prices in global markets since the U.S. trades diesel and gasoline,” the study explains. “Because a cessation of U.S. crude oil exports would lower the supply of oil in global markets and raise its price, one would expect global fuel prices, if anything, to increase as a result.”
“In other words, the prices of gasoline and diesel fuel in the U.S. would not be expected to decline and might actually increase, rendering the crude oil export ban not only ineffective, but also counterproductive,” the authors conclude.
Other studies have reached similar conclusions.
The inescapable reality is that Biden can’t do much to lower gas prices in the next few weeks before the election. (He has already dangerously lowered the country’s strategic reserves.) His anti-energy policies have certainly contributed to elevated gas prices, but they’re never fully within any president’s control, heavily depending on international factors.
Yet none of this has stopped Biden from repeatedly taking credit for the slight downtick in gas prices over the last few months. Now, he’ll have to accept blame for the rise — and no drastic acts of policy desperation can get him off the hook.
This article originally appeared in the Washington Examiner.