Mar 22, 2022 - Business

A reality check on the political blame game for high gas prices

Illustration of a car gas gauge, with a neutral emoji on the left and a swearing emoji on the right, and the needle reaching the swearing side.

Illustration: Brendan Lynch/Axios

The solution to steep gas prices is not as easy as drilling more wells and pumping more oil from the ground in Colorado.

Why it matters: Gas prices are becoming a political touchpoint in the 2022 election, and elected officials are trying to influence the view of voters between now and November.

State of play: President Biden and Gov. Jared Polis, both Democrats, are pinning part of the blame for soaring pump prices on the oil and gas industry.

  • The governor's office told Axios Denver that operators are sitting on more than 2,600 unused permits to drill in Colorado and expressed frustration that they have "little intention of increasing production" in response to Russia's invasion of Ukraine.

That sentiment echoes what Republicans and the oil and gas industry in Colorado are saying, but their fingers are pointed in the opposite direction. They blame the Democratic administration and newly tightened rules surrounding drilling in Colorado.

  • "I think it's time for Polis and Biden to put our oil and gas workers into production so we don't have to buy Russian oil," Heidi Ganahl, a GOP candidate for governor, told John in a recent interview.
  • The industry shares this view. Lynn Granger, the American Petroleum Institute's state director, said in a statement that "years of short-sighted policymaking at both the state and federal levels have contributed to where we are today."

Reality check: Production is driven by market forces, not just the regulatory landscape and available permits.

  • Right now, companies are reluctant to invest big money into new wells, reflecting investors' desires to pull profits from existing operations.
  • Moreover, it takes significant time and planning to bring a well online, meaning the industry typically plots its strategy months to years ahead of time.

By the numbers: Colorado ranks fifth in the nation for crude oil production and seventh for natural gas, but 2022 production is expected to remain below pre-pandemic levels.

Only 12 rigs were active in the state at the end of 2021, down from more than two dozen in late 2019, a new legislative report shows.

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