Treasury Secretary Janet Yellen said Sunday that the Biden administration’s policies are not responsible for record-high gas prices, and the only way to fix the energy crisis in the "medium-term" is to move towards "renewables to address climate change."
During an appearance on ABC’s "This Week," Yellen was asked to respond to a statement Wednesday by the American Petroleum Institute, which said the Biden administration’s "misguided policy agenda shifting away from domestic oil and natural gas has compounded inflationary pressures and added headwinds to companies’ daily efforts to meet growing energy needs while reducing emissions."
Yellen fired back that the historically high gas prices have nothing to do with policies and are reflective of low-producing oil companies.
"Well, I don't think that policies are responsible for what's happening in the oil market," she said. "Actually, consumption of gas and fuels are currently at lower levels than pre-pandemic, and what's happened is the production has gone down. Refinery capacity is declined in the United States and oil production has declined. I think that producers were partly caught unaware by the strength of the recovery in the economy and weren't ready to meet the needs of the economy. High prices should induce them to increase supplies over time."
Yellen argued that the best way to address the energy crisis in the "medium-term" is to transition the country off of fossil fuels.
"And look, as a medium-term matter, the way in which we can assure reasonable energy expenses for households is to move to renewables to address climate change, as a medium-term matter," she said. "That's the way to free us from geopolitical movements in oil prices."
Yellen added that President Biden is considering a range of options to help bring down gas prices, including a federal gas tax holiday.
"President Biden wants to do anything he possibly can to help consumers," she 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 certainly worth considering."
The national average of a gallon of unleaded gas hit $4.99 on Sunday after hitting an all-time high of $5 for a solid week earlier this month. Biden has blamed the Russian war in Ukraine and the COVID-19 pandemic for fueling the price rise and record inflation, while Republicans blame exorbitant government spending and U.S. dependence on foreign oil markets.
In its statement last week, the American Petroleum Institute called on the administration to "prioritize unlocking U.S. energy resources – that are the envy of the world – instead of increasing reliance on foreign sources."