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A Simple Plan for Biden to Lower Gas Prices and End Fossil Fuel Hegemony

Conservatives have never let an energy crisis go to waste. Liberals shouldn’t, either.

President Biden climbs out of a Jeep.
Win McNamee/Getty Images

There’s a global energy crisis, or rather a few different, interrelated ones. There’s also a lot of opportunistic hype. As heat bills surge in the U.K. and gas prices soar in the United States, right-wingers in the U.S. and Europe have eagerly blamed high prices here and shortages there on overzealous government climate policies, green movements, and the now-trendy use of the phrases ESG and net-zero among corporate investors. This argument is rubbish. But there’s a reason the fossil fuel industry’s more reliable boosters are repeating it far and wide: If politicians carefully consider their options right now, they could set the stage for a sustainable and shortage-free future—and end fossil fuel supremacy for good.

So far, the Biden White House has steered well clear of any challenge to fossil fuel producers. Among the reasons American consumers are facing relatively high prices right now is that, after years of hemorrhaging investor cash, oil and gas producers treated the shock of the pandemic as a wake-up call to strategically constrain production, allowing prices to rise rather than flooding the market with excess supply. For the most part that worked, with higher prices making way for the sorts of costly unconventional production that has dominated the U.S. oil and gas sector since the Great Recession.

But there are other problems, too, both here and abroad: Economies’ boom back from pandemic shutdowns have seen a spate of supply chain issues involving everything from semiconductors to couches, dubbed the “Everything Shortage” by The Atlantic’s Derek Thompson. Flooding in China’s biggest coal-producing region, Shanxi, knocked 60 mines out of commission. That’s sparked industrial fuel shortages, prompting the government to try and get power flowing by any means necessary. Russian state-owned oil giant Gazprom is only honoring long-term supply contracts to Europe, in what both the U.S. and European Parliament have been quick to argue is a cynical bid to extort European support for its Nordstream 2 pipeline. Earthquakes caused the Netherlands to shut down its Groningen gas field, which might ordinarily pitch in amid a crunch. It all looks, British author Richard Seymour wrote recently, like “a gathering of apparently unrelated shocks.”

The world is experiencing an unmanaged—read: unplanned—decline of the fossil fuel sector. It’s a bit like a very old beloved pet whose health has been waning for some time, whose owners have spared no expense on treatments. Those have worked for a while to fend off some catastrophic ailments. There are moments when they seem like their old self. But continuing to spend a small fortune keeping them alive amid conditions that keep piling up—hoping they’ll return to some dignified quality of life, despite all evidence to the contrary—isn’t doing either party much good. Unlike that old pet, the fossil fuel sector’s continued existence is a threat to the foundations of human civilization, and it’s shitting all over the future.

Declining investment in oil and gas drilling and export infrastructure is a good thing, in line with the International Energy Agency’s recommendations this spring to stop developing new reserves, end the sale of new internal combustion engine vehicles by 2035, and phase out virtually all coal- and oil-fired power plants by 2040 in order to keep temperatures from rising more than 1.5 degrees Celsius (2.7 degrees Fahrenheit). But we still live in an economic system built, foundation to capstone, around fossil fuels. Bringing lots of renewable power online in the short term can help to address rising demand, but the energy incumbents are powerful and lots of people still depend on them to pay the bills and turn on the lights.

The energy transition is ultimately a planning problem. We need a coordinated international approach to keep countries supplied with energy and to ensure consumers don’t go broke trying to keep the heat on. Instead, decades of climate policy—on both sides of the Atlantic—have misguidedly treated energy disruptions as a market failure to be fixed by a private sector provided the right set of incentives.

Fixing the current problem would require ambitious but not especially complicated policies: Coordinated government programs could mass-install heat pumps (much more energy efficient than furnaces) that run on a rapidly decarbonizing electric grid instead of on precarious gas supply chains, creating millions of jobs in the process. While that happens, they could follow Spain’s lead in providing subsidies—furnished by industry profits, perhaps—to help see households through inevitable energy price swings, and go on a wartime footing to build out low-carbon mass transit options and dense, resilient housing. Governments could also pour money into finding zero-carbon alternatives for heavy industries like steel and concrete, all while their energy planners meticulously account for which of today’s energy sources are best suited to meet today’s needs, matching supply to demand and ensuring that a few months of energy crunch don’t become an excuse to lock in 30 additional years of fossil fuel infrastructure. (Recent analyses indicate that U.S. liquid natural gas export capacity could double within the next three years if industry gets its way.)

Since the end of World War II, though, the U.S. has mostly let these kinds of higher-level economic planning capacities wither. As Kevin Book, managing director of research firm ClearView Energy Partners, told Bloomberg this week, “The U.S. government doesn’t have the ability to move earth and molecules any faster than the private industry that is responsible for producing energy.” This is unfortunately true; if anything, the government tends to move a lot slower than the private sector. The U.S. has plenty of government policy and funding in place to prop up its energy sector, which is hardly a free market bastion. But most of that takes the form of showering industry with massive subsidies, leases, and other amenities while maintaining a hands-off approach to most production and distribution decisions. This doesn’t need to be the case, though.

Energy crises are special. From the oil shock of 1973 to the collapse of the USSR, they have a way of catalyzing—though not causing—transformative shifts in business as usual. As Seymour wrote of 1973, “Soaring energy prices and their knock-on effects on stock markets and political stability catalyzed the realignment of classes and the formation of new political alliances to overhaul production.” Along with the Volcker Shock—where Jimmy Carter’s Fed pick triggered a recession and global debt crisis to tackle inflation—the frenzy around a pretty overhyped oil crisis helped usher in neoliberals positing answers to ongoing crises of industrial overcapacity and declining rates of profit.

It’s not too hard to imagine a similarly scary path forward from today’s high fuel prices in the U.S.: As gallons of gas approach pre-2008 highs, Democrats could manage to pass a roughly $2 trillion reconciliation budget with modest and entirely inadequate amounts of climate spending, maybe even a carbon tax. The right would then latch on to general confusion about what’s actually in the infrastructure package and blame high gas prices on Joe Biden and Nancy Pelosi’s radical green agenda, contributing to a blowout congressional sweep for the GOP in 2022. The Republican majority would then refuse to recognize that a Democrat has been elected to the White House in 2024, likely locking in at least a decade of right-wing rule and eviscerating any hopes for comprehensive climate policy.

A Green New Deal is not on the immediate horizon in the United States. But with a little forward thinking, today’s energy crunch could, instead of ushering in a decade of deadly reactionary politics, work out pretty well for the planet. Right now, the White House is reportedly mulling an emergency declaration to reinstate the crude oil export ban—not as environmental policy, certainly, but rather to keep oil prices low at home. That ban was first enacted in 1975 as part of a suite of protectionist energy policies intended to create “energy independence,” fearful of OPEC’s influence over a key commodity. Thanks to a lot of lobbying from industry, it was quietly repealed the same week the Paris Agreement was brokered in 2015. Whatever the intentions—again, they’re hardly green—reinstating the ban now would be a greater challenge to fossil fuel industry profits than any posed by a U.S. president in recent memory. The White House might even restrict liquefied natural gas exports, impeding the industry’s current plan to exploit Europe’s energy crunch to build out tens of billions of dollars’ worth of new infrastructure.

There is an admittedly distant world in which the U.S. agreeing to exercise more control over its bizarrely private-sector-dominated energy sector gives it the tools needed to carry out a more orderly transition. Rather than ceding that ground back to the private sector once this moment passes, the White House could—like presidents before—use those same powers to inaugurate a new era of energy independence premised on the industries of tomorrow, stemming the flow of American fossil fuels abroad.

The Biden White House hopes to arrive in Scotland for the 2021 United Nations Climate Change Conference at the end of this month armed with a reconciliation package that includes at least tens of billions of dollars a year on climate spending, in the form of clean energy tax credits, a clean electricity payment plan, and more. Whether it gets this through Congress or not, though, Biden could use existing authorities to take the reins in the American energy sector and start setting an example for the rest of the world for how to take on fossil fuel profiteers.

Like the Obama administration before it, Biden’s White House has tried to have its cake and eat it, too: talking up all the green investments he wants to make while approving a rash of permits for new drilling on public lands and promising to keep cheap gas flowing. That’s why Indigenous leaders are converging in D.C. this week under the banner People vs. Fossil Fuels, demanding an end to new fossil fuel spending, permit approvals, and exports. The White House can’t keep pretending its most destructive industry doesn’t need to be euthanized. Will high gas prices be the thing that finally prompts the Biden administration to rethink its all-of-the-above stance? Probably not. But in a crisis anything is possible.