This is the Cato Daily Podcast for Saturday, April 30th, 2022.

I'm Caleb Brown.

There are steps that the Biden administration could take to make oil production easier

and ease prices at the pump.

The administration appears loath to take some of those steps.

Cato's Gabriela Beaumont Smith details one vital input for oil and gas production

that costs more than it should and yes that's the government's

fault.

Joe Biden would like to bring down gas prices.

It's caused him quite a bit of political pain, so I guess first of all why are gas prices so high?

Gas prices are high at the moment because of pretty simple economics, supply and demand.

demand is very high and the supply isn't really there to meet the demand.

President Biden has asked oil and gas companies to increase production by drilling more. These companies are not

willing to do that because they're not sure that they'll see a return on their

investment. So what has Joe Biden asked gas companies to do?

So I understand that the administration has increased permits to drill on federal lands to incentivize these oil and gas companies

to drill more so that more oil and gas can enter the market.

There will be more supplied to meet this increased demand,

but those petitions and that access to the federal land just isn't enough to convince these

companies to drill more and get more oil and gas out into the market.

So what else contributes to the return and investment decisions that oil companies might make?

Well, one big part of the investment decision process is production costs.

...