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Moving to renewable energy is the way to reduce the energy costs of households, Treasury Secretary Janet Yellen told ABC's George Stephanopoulos this weekend, adding that federal government policies on energy were not to blame for the current price situation.
In response to a question citing API's president Mike Sommers as saying that the Biden administration moved away from domestic oil producers and this contributed to inflationary pressures, Secretary Yellen said, "I don't think that the policies are responsible for what's happening in the oil market."
"Actually, consumption of gas and fuels are currently at lower levels than pre-pandemic and what's happened is that production has gone down, refinery capacity has declined in the United States, and oil production has declined," she added.
Yellen went on to suggest that oil producers were "partly caught unaware" by the strength of the post-pandemic recovery of the economy and were in no position to meet the oil demand that came with this stronger-than-expected recovery. Yet, she said, "high prices should induce them to increase supplies over time."
Over the medium term, however, Secretary Yellen believes the solution to lower energy costs is the shift towards renewable energy.
"The way in which we can ensure reasonable energy expenses for households is to move to renewables, to address climate change, as a medium-term matter. That's a way to free us from geopolitical movements in oil prices," she said.
Asked about whether a pause in the national gas tax was also among the tools the White House was ready to use as a short-term relief for drivers, Secretary Yellen confirmed it was on the table.
"President Biden wants to do anything he possibly can to help consumers," Yellen said. "Gas prices have risen a great deal, and it's clearly burdening households. So he stands ready to work with Congress, and that's an idea that's certainly worth considering."
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.