As gas prices rise, Biden asks FTC to investigate ‘illegal conduct’
DETROIT – President Biden on Wednesday helped name a General Motors plant that makes electric vehicles, moving in a battery-powered Hummer to highlight a transition to energy-efficient cars and trucks that the president hopes his law will $ 1 trillion infrastructure will accelerate.
But the visit came on a day when Mr Biden faced a more immediate problem – soaring gas prices. Before leaving for Michigan, the president asked the Federal Trade Commission to investigate whether oil and gas companies were engaging in “illegal behavior” that drove up prices at the pump.
Mr. Biden toured GM’s âFactory Zero,â watching workers bolt a 3,000-pound battery into the body of a white Hummer truck, then ride it through a vacant lot behind the plant.
“These suckers are something else,” he said after the ride.
In a speech at the plant, Biden said it was an economic and environmental necessity for the United States to be the world leader in the production of electric vehicles. âWe’re going to make sure these jobs end up in Michigan,â he said, ânot halfway around the worldâ.
The split screen of what Biden calls America’s future and the immediate political pain of high gas prices have shown how far the United States must go to catch up with its rivals in the race for low-cost vehicles. emissions and how dependent they remain on fossil fuels.
Soaring gas prices, driven up by an OPEC production choke and renewed driving activity as commuters and tourists return from a pandemic break, have shaken Americans’ outlook on the economy and helped fuel an acceleration in inflation that put part of Mr. Biden’s economy at risk. agenda to Congress.
The average gallon of gasoline was nearly $ 3.40 in the United States on Monday, according to the Energy Information Administration, its highest price in seven years.
Wednesday, Mr. Biden asked the Federal Trade Commission to determine whether large oil and gas companies were artificially raising gasoline prices for U.S. consumers, the administration’s latest effort to target concentration in the energy sector in an effort to cut costs.
The move is unlikely to prompt immediate action from the FTC, which Has the power to break down the big players in the industry, and it’s unlikely to materially affect gasoline prices anytime soon. But that could prompt the commission to open an investigation to gather data on how companies set gasoline prices, which could be used in future enforcement actions.
Mr Biden’s letter to Lina Khan, the antitrust champion he appointed commission chair, says “there is growing evidence of anti-consumer behavior on the part of oil and gas companies.” The President noted that prices at the pump had increased even as refined fuel costs had fallen and industry profits had increased. The two biggest players in the industry, Exxon Mobil and Chevron, have doubled their net income since 2019, he wrote, while announcing billions of dollars in dividend issuance and share buyback plans .
“The FTC is concerned about this issue and we are reviewing it,” said Lindsay Kryzak, a spokesperson for the agency, in a statement.
Rising gas prices have long been a political issue for presidents, who are often blamed for increases that are largely beyond their control.
The Liberal Data for Progress polling group posted a memo on Wednesday showing that increased voter disapproval of Mr. Biden “correlates strongly” with rising gas prices over the summer and fall. The note claimed that the rise in prices at the pump had outpaced other economic improvements that should lift the president, such as a strengthening labor market and strong wage growth for low-wage and middle-class workers. The group applauded the FTC’s request while urging Biden to “consider short-term executive prescriptions that address the recent increase in retail gasoline prices to a reasonable extent.”
Administration officials have singled out the oil companies. Chris Meagher, deputy White House press secretary, told reporters at Air Force One that drivers would pay up to 25 cents less per gallon if the gap between the costs of refined fuel and the prices of the gasoline at the pump was returning to normal levels before the pandemic.
The increase of about $ 1 a gallon since Mr Biden took office has the president stuck between his goals of reducing greenhouse gas emissions that drive climate change and keeping costs down for consumers of the middle class.
Mr Biden declined to include a federal gas tax hike to offset spending in his infrastructure negotiations with Republicans, while insisting the deal includes $ 7.5 billion for build what the White House says are up to 500,000 electric charging stations nationwide. The infrastructure law also provides $ 7.5 billion to help strengthen the supply chains that power electric vehicles and $ 5 billion for electric buses.
“It’s going to take us by 2030 to have half of America’s electric vehicles,” Biden said at a press conference in Rome last month after a meeting in which he pushed global producers of more oil to be pumped to lower prices. “So the idea that we won’t need gasoline for automobiles is just not realistic.”
When the cost of gasoline exceeds $ 3.35 a gallon, he added, “it has a profound impact on working class families just to come and go to work.”
Electrifying the transportation sector is emerging as a critical step for rich countries like the United States as they attempt to reduce fossil fuel consumption and avoid catastrophic increases in global temperature. Over time, the shift to a more heavily electric vehicle fleet will also reduce gasoline demand – and with it, prices.
But the United States lags far behind Europe and China in the adoption of electric cars. Battery-powered vehicles accounted for less than 3% of new registrations in the United States this year, compared to 9% in the European Union and 10% in China.
One of the reasons for slow adoption in the United States is the lack of places to recharge. There are 45,000 public charging stations in the country, according to the Ministry of Energy. The European Union, with less than half the area of ââthe United States, has five times that.
Sales of electric vehicles have grown rapidly in the United States despite less government pressure, nearly doubling from last year even as gasoline vehicle sales plummeted. Tesla dominates the US market, accounting for well over half of electric vehicle sales. But mainstream automakers are gaining share with models like the Ford Mustang Mach-E, Chevrolet Bolt, and Volkswagen ID. 4.
Electric vehicles have implications for the United States’ rivalry with China. Beijing hopes to harness the shift to electric transportation to become a major exporter of automobiles. Chinese automakers like SAIC Motor have made aggressive moves in Europe and are expected to target the United States. The more cars they sell, the more experience they gain with new technology, which they can apply to make better products.
Mr. Biden is pushing Congress to do more to push for the electric shift. The $ 1.85 trillion collection of spending programs and tax cuts Democrats hope to pass in the House this week includes billions of dollars in loans and grants to further support the manufacture of electric vehicles. It would increase tax credits for the purchase of electric vehicles up to $ 12,500 each, providing more for union-made cars and trucks built in America.
The president has repeatedly championed electric vehicles in person. Mr Biden this spring visited a Ford plant that makes an all-electric version of the F-150 pickup truck, which the president also took for a ride. GM has said it will go all-electric by 2035. Ford has announced $ 30 billion in electrification investments and said it will go zero-emissions worldwide by 2040. The White House said Wednesday that automakers have now committed $ 70 billion to manufacturing electric vehicles in the United States.
On Wednesday, Biden met autoworkers and GM General Manager Mary Barra and marveled at the Hummer’s turning radius and top speed. At a groundbreaking ceremony for the plant, Barra said the spending bill Mr. Biden defended in Congress would put America “on an irreversible path to a zero-emissions future.”
The president opened his remarks by pointing to new research suggesting his spending bill wouldn’t add to the price hike across the country, but he quickly returned to the cars.
âMy God, it’s good to be back in Detroit,â Mr. Biden told the crowd. “And this Hummer: one hell of a vehicle.”
Jack Ewing contributed to New York reporting.