This article contains mild spoilers for the first half of Season 4
Storylines in the Netflix TV show House of Cards aren’t generally rooted in reality. Look no further than the issue of gasoline prices and the oil shortage in Season 4. President Frank Underwood is running for election against the backdrop of retail gasoline rising above $6 per gallon, Moscow slashing production to achieve its geopolitical goals, and fuel stations running dry. That is the complete opposite of today’s real world: Motorists are benefitting from the lowest pump prices in well over a decade, Russia and other major producers have seen their global market clout get hampered by the rise of U.S. shale oil and have boosted rather than cut production in response, and storage tanks for crude oil and refined product are brimming, leaving no shortage of supply.
Compared to other storylines in the Netflix drama, the energy subplot is not completely out of the realm of possibility. It wasn’t all that long ago the U.S. and global oil markets were in a crisis, with producer countries having outsized power.
Even so, compared to other storylines in the Netflix drama, the energy scenario is not completely out of the realm of possibility. It wasn’t all that long ago the U.S. and global oil markets were in a crisis, with producer countries having outsized power. In 2007-08, oil prices skyrocketed to $147 per barrel, with the velocity of the increase helping induce a recession. U.S. drivers were seeing the highest levels ever for gasoline prices, and there was limited global spare production capacity to deal with any supply disruptions. Even as recently as the middle of 2014, global prices were north of $100 and pump prices were consistently elevated near $4 per gallon. In 1990-91, when oil prices soared ahead of the First Gulf War, there was growing public anxiety the situation would worsen. An economic downturn eventually ensued. And, of course, in 1973 & 1979, major oil price shocks caused by oil embargoes among OPEC countries triggered nasty recessions, with the 1973 embargo sending the United States into the worst economic slowdown since the Great Depression. House of Cards models its Season 4 energy subplot on the crises of that decade, with long lines at fuel pumps and a petro state (this time Russia) withholding supply to create an artificial shortage, lift prices, and support its geopolitical ambitions. In fact, President Underwood asks supporters: “Now, how many of you remember 1973, when gas prices were as bad as they are today?” Further linking the current crisis to the Arab Oil Embargo of 1973, Underwood says: “OPEC was trying to hold us hostage then just as Russia is trying to hold us hostage now.”
Even though the U.S. and global oil markets are currently enjoying an abundance, this situation may not last forever.
The main lesson: Even though the U.S. and global oil markets are currently enjoying an abundance, this situation may not last forever. Shale oil (conspicuously absent in the 2016 world of House of Cards) has been a game-changer for the world market, but it is questionable how durable it is. Capital expenditures are being slashed throughout major non-OPEC countries. Producers such as Russia and OPEC members are set to see their market share rise again next decade. In fact, Moscow is trying to gather both OPEC and non-OPEC producers in order to put a cap on roughly three-quarters of the world’s output. With Russia wanting to help negotiate a deal between OPEC and non-OPEC producers, it is trying to assert its status as an energy and military powerhouse, and also gain more clout surrounding its goals in the Middle East.
Real-world players similar to President Petrov, the fictional Russian leader in House of Cards, could become more powerful in such an environment. The U.S.-Russia tension in the show is eased with a bailout for Moscow (along with a highly implausible deal of Washington and Beijing dividing control of some Siberian oil fields), but real-world issues involving oil crises do not necessarily resolve themselves so swiftly.
Gasoline prices in an election year
President Underwood has to deal with a testy electorate because of high gasoline prices. During one scene while he is in his presidential limousine in South Carolina, an irate voter in front of a gas station flashes him an obscene gesture. Later, he is told his approval ratings are taking a hit as the oil crisis worsens. He even consults with his Secretary of State about further tapping the Strategic Petroleum Reserve (SPR) to ease the market and boost his status among voters. She tells him that using oil stored in the SPR would provide only temporary relief.
Underwood, played by Kevin Spacey, wouldn’t be the first commander-in-chief to deal with significant energy issues in an election year. In 1980, Jimmy Carter lost the presidency, in large part as a result of fallout from the energy crisis and his call on citizens to conserve during a time of scarcity. His request didn’t go over well with voters. High gasoline prices during the 1970s reflected the economic discontent of the time, undermining his chances of re-election. But lessons learned from the 1970s and actions taken to boost energy security—including the establishment of fuel economy standards and the SPR, along with other measures—have played critical roles in the past four decades.
Since Carter, no president has been voted out directly as a result of energy issues, but there has been a loose correlation between gasoline prices and the success of the incumbent party in elections.
Since Carter, no president has been voted out directly as a result of energy issues, but there has been a loose correlation between gasoline prices and the success of the incumbent party in elections, given that they are a major factor in consumer and voter sentiment. For instance, in 1984 and 1996, Presidents Ronald Reagan and Bill Clinton easily won re-election, respectively, thanks in part to robust economies and low fuel prices. In 2008, when oil prices were rising sharply during the administration of Republican George W. Bush, the Democratic Party took back the presidency—although many other factors besides high pump prices helped Barack Obama win that year. In 2012, Obama had to deal with historically high price levels, but luckily for him, they collapsed by almost 40 cents in the couple of months leading up to the general election. Consumers had also acclimated by that time to gasoline prices well north of $3 per gallon. The current low oil price environment should benefit the Democratic nominee, but as the primary season has shown (in both real life and in House of Cards), this year guarantees to defy conventional expectations.
For many reasons, we’re lucky to not be living in the fictional energy-shortage world of President Underwood. Some storylines from House of Cards mirror real life, while many remain extremely far-fetched. But the nightmare scenario of an oil shortage with disastrous economic fallout has actually happened. The fact that oil powers more than 90 percent of the transportation sector means it could happen again. It’s important that it never does.