Gas Prices Are Falling, But Global Events Could Cause Increase, Energy Secretary Warns

Jennifer Granholm said the U.S. will produce a record amount of oil next year.

Energy Secretary Jennifer Granholm on Sunday said the U.S. will produce a record amount of gasoline next year as the Biden administration continues its efforts to reduce prices for Americans.

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

“As you know, gasoline comes from oil,” Granholm told “Fox News Sunday.” “Oil is traded on a global market. So we are at the whim, if you will, of what happens globally.”

Granholm touted President Joe Biden’s actions to boost the domestic supply of gasoline. That includes releasing one million barrels of oil per day from the nation’s strategic reserves, which she called the “biggest tool at our disposal.”

“This is all about supply and demand,” Granholm told Fox News’ Trace Gallagher. “When Russia invaded Ukraine, that pulled millions of barrels off of the global market. Since oil is traded globally, we have to make up for that lost amount of fuel.”

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

Gas prices started increasing in mid-2020 as the world adjusted to COVID, and went back up this year following Russian President Vladimir Putin’s invasion of Ukraine as Western countries sanctioned Russian oil, according to The Associated Press. Russia is one of the world’s biggest oil producers.

In early August, prices fell below $4 for the first time in five months, due to 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 single day of this summer,” Granholm said of gas prices. “We’re hopeful that that will continue.”

However, Granholm warned that China ramping up its economic activity could lead to prices rising again.

China’s “zero COVID” policy has meant its economy ― which is also facing separate challenges, including youth unemployment and a property 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 watching what happens globally. But we are doing everything possible to try to stabilize supply and demand to keep those prices coming down.”

Granholm also spoke about how incentives included in the “Inflation Reduction Act” — the Democrats’ climate and health care law signed by Biden last week — could help the U.S. become energy independent by creating its own supply chain and energy ecosystem.

“The president has said that we need to manufacture stuff in America, that we can’t rely upon countries who don’t share our values for the batteries for example for electric vehicles, which contain critical minerals, critical materials,” she said.

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

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

“They are intermittent because the sun doesn’t always shine and the wind doesn’t always blow,” Granholm said. “But the battery technology that stores that — that is also incentivized in this Inflation Reduction Act. The technology is there. We just need to make sure that it’s implemented.”

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