Gas prices are falling, but world events could lead to a rise, Energy Secretary warns

Energy Secretary Jennifer Granholm said Sunday that the United States will produce a record amount of gasoline next year as the Biden administration continues efforts to lower prices for Americans.

But Granholm warned that consumers could still be affected by events overseas.

“As you know, gasoline comes from petroleum,” Granholm told “Fox News Sunday.” “Oil is traded on a global market. So we’re at the mercy, if you will, of what’s going on globally.

“It’s a question of supply and demand,” Granholm told Fox News’ Trace Gallagher. “When Russia invaded Ukraine, it took millions of barrels off the world market. Since oil is traded globally, we need to compensate for this amount of lost fuel.

The United States will produce a record amount of oil – 12.7 million barrels a day – by next year, she said. The previous record was 12.2 barrels per day, according to The Hill.

Gas prices began to rise in mid-2020 as the world adjusted to COVID, and rebounded this year after Russian President Vladimir Putin invaded Ukraine as Western countries sanctioned Russian oil , according to the Associated Press. Russia is one of the largest oil producers in the world.

In early August, prices fell below $4 for the first time in five months on fears of a global recession, AP reported.

The Energy Information Administration expects that by the fourth quarter of this year, gas prices will fall to $3.78 on average from the current $3.90 on average, Granholm said.

“They’ve fallen every day this summer,” Granholm said of gasoline prices. “We hope this will continue.”

However, Granholm warned that China stepping up economic activity could cause prices to rise further.

China’s “zero COVID” policy has meant its economy – which also faces distinct challenges including youth unemployment and a housing crisis – has taken a hit, according to Bloomberg.

“If China opens up significantly after COVID, there will be more pressure on demand,” Granholm said. “More pressure on demand means upward pressure on prices. So we’re looking at what’s happening on a global scale. But we are doing everything we can to try to stabilize supply and demand to keep these prices down. »

Granholm also explained how the incentives included in the “Cutting Inflation Act” – the Democrats’ climate and health care bill signed by Biden last week – could help the United States become independent on the energy plan by creating their own supply chain and energy ecosystem.

“The president said we have to make things in America, that we can’t rely on countries that don’t share our values ​​for batteries, for example for electric vehicles, which contain critical minerals, critical materials” , she said.

“He wants to relocate manufacturing,” Granholm added. “It’s not just in electric vehicles, this Inflation Reduction Act provides credits to businesses to relocate to America.”

Pressed on whether clean energy sources, including solar and wind, are reliable, Granholm argued that the Democratic bill would help the United States take full advantage of technology to enable this transition.

“They’re intermittent because the sun isn’t always shining and the wind isn’t always blowing,” Granholm said. “But the battery technology that stores that – which is also encouraged in this inflation reduction law. The technology is there. We just have to make sure it’s implemented.


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