By Hiroko Tabuchi and Maggie Astor

More than a decade ago, when Americans faced surging prices at the pump, policymakers developed a vision to wean people off gas and oil: more efficient cars, more compact and walkable communities, more renewable energy.

“We have a serious problem,” George W. Bush had warned in his 2006 State of the Union address. “America is addicted to oil, which is often imported from unstable parts of the world.” It was a powerful statement for a Republican president with deep ties to the oil business.

His remarks — made as oil prices rose and eventually hit $100 a barrel for the first time in the country’s history — marked the start of several years of a remarkable bipartisan push to wean the nation off oil and gas and better insulate Americans from price shocks in the global oil market.

Officials drew up the first increase in fuel economy standards for cars and trucks in decades. National oil savings plans won broad support in Congress, to address energy dependency as well as the grave threat of climate change. Public transportation advocates launched “Dump the pump” days to urge commuters to take trains and buses.

Then the country lost momentum. A surge in oil and gas production at home, as well as a flood of cheap crude overseas, ushered in an era of lower energy prices. Ramping up supply, rather than reining in demand, came to define America’s push for energy independence.

Awash in fuel, Americans bought larger cars and homes that required more oil and gas to power them. Cities built more highways, public transportation use declined, and suburbs sprawled.

Yet the nation’s expansion of drilling over the past decade — which made the United States the world’s largest oil and gas producer — has ultimately made households vulnerable to volatile price swings. American oil and gas companies say that they have no control over high prices at the pump, citing a confluence of global factors: the Covid pandemic, supply chain disruptions and Russia’s invasion of Ukraine.

“No matter how often ‘drill, baby, drill’ is held up as a solution,” said Michael Greenstone, a professor of economics and director of the Energy Policy Institute at the University of Chicago, “the basic economics of it are the U.S. is still a small share of global capacity and global production, and therefore can’t affect the global price very much.”

Continue Reading at New York Times…

Areas of Focus: Energy Markets
Energy Markets
Well-functioning markets are essential for providing access to reliable, affordable energy. EPIC research is uncovering the policies, prices and information needed to help energy markets work efficiently.
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