Biden's War On Energy Production
While Joe Biden has a lot of phony excuses for high energy costs, the simple fact is the pain we're facing at the pump is a result of Biden's failed policies.
After the Keystone Pipeline was blocked for 12 years by Obama, the Trump administration opened up the Keystone Pipeline immediately upon being sworn in and created over 40,000 high-paying jobs. Biden shuttered it, losing most of those jobs. Has any new pipeline project started under Biden's administration? How about a new refinery? Hasn't he stopped leasing federal lands for oil exploration? Once again, the US is now dependent on foreign oil and we are funneling billions to non-ally countries. They use our money to buy weapons for our enemies.
Normally, the pure economic forces resulting from such high energy prices would trigger the energy industry to rush new energy production to the market and prices would moderate. Has this happened?
Ever wonder why?
The cause isn't JUST canceling a pipeline but a whole series of disastrous presidential policies put in place in the early days of Biden's presidency. He is now reaping the whirlwind for his policies.
Canceling Drilling Leases and Limiting Domestic Production
Biden's policies gravely limited domestic production beginning almost immediately after taking office. Actions such as halting federal permits for oil and gas leases have a major impact, particularly on future production. But In the immediate term, with reduced prospects of new sources in the future, the market factored the reduced prospects of future production limits into current prices.
It is basic marketplace economics so this was easily foreseeable.
A Major Increase In Punishing Regulation
Drillers are having a much more difficult time getting approvals from federal agencies, including the EPA, not just on new drilling projects BUT ALSO ON INCREASING THE PRODUCTION OF EXISTING WELLS. But, all the time, Biden has been making speeches imploring oil companies to INCREASE the output of gasoline.
Simple questions: from what? Gasoline begins with crude oil as its precursor, not speeches.
Further, across the board, federal regulations are choking the energy business that, yet again, naturally leads to price increases due to increased operating costs. This is also basic economics.
Unfortunately, the Biden administration isn't finished yet; additional far-reaching regulations are being implemented and more have been proposed.
The effect isn't just on drilling leases and production, it is on infrastructure as well. Yes, we need new pipelines. But also, the US hasn't built a new refinery with significant output capacity in the United States in almost the last 45 years. During the COVID shutdowns and the resulting downturn, the energy industry shut down some older, obsolete refineries that were no longer economically viable but faced uphill battles getting past the regulatory hurdles for modernizing. As COVID was ending, the energy industry was just beginning to recover as Biden came into office and his policy punishments began.
Growing governmental restrictions have made obtaining all of the required permits for new refining operations increasingly difficult as well as a major expense. Further, there is the time and cost of the inevitable litigation then begins upon issuance of any permits.
Thank you for over-reaching regulation, Mr. President.
A Torrent of Negative Rhetoric
Presidential words have an impact; an ongoing torrent of negative rhetoric is even more so.
First, such sustained negative rhetoric gives cover to the bureaucracy and its agencies for their energy-negative actions. Bureaucrats know how to follow a lead.
Second, such a sustained level of negative rhetoric also discourages important investment in the energy sector just at the time when it is needed.
On the campaign trail, Biden said, "We are going to phase out fossil fuels ..." and "We going to get rid of fossil fuels." You might write off such a statement as typical Biden bombast until, on his first day in office, he shuts down a major pipeline project and then shortly afterward, cancels oil leases.
Simply put, he has convinced investors and the marketplace that his words are serious and we were facing a policy shift at least in his likely one and only term. Rhetoric and policy conspired together to create the current environment.
A Reliance on the Unicorn of the Green New Deal
A very basic mistake in Biden's policies was child-like thinking that the Green New Deal was real and could be turned on like flipping a switch; that it could be implemented and even capable of filling the gap of reduced fossil-fuel production.
It can be easily argued that Biden's master plan was to CAUSE the increase in energy costs to make the Green New Deal economically viable. Simply put, it is immature and can't stand alone, even with government subsidies, UNLESS the cost of fossil-fuel-derived energy is artificially INFLATED. If you can't bring down the cost of the Green New Deal, all you can do is artificially INCREASE the cost of fossil fuel so the Green New Deal can economically compete.
You can easily see the trend. Biden's Secretary of Energy, Jennifer Granholm, became the latest administration politician to suggest the solution to high gas prices was to buy an electric vehicle. We set aside the fact that working people simply can't afford one, doesn't anybody think that the price of the electricity to charge it won't radically increase as well. Wind and solar production can't reliably supply the energy needed. Electrical generation plants are driven by the ever-increasing cost of the fuel that fires the plants.
Soaring energy costs are a disaster for the world economy. But, there is a belief held by many on the left that, ironically, this is an "opportunity" to shift from what they believe is a "fossil fuel addiction." All that has to happen is governmental policies that make fossil fuel prices permanently high so the United States, and the rest of the world, will transition to other energy sources.
So, under Biden's policies, fully expect all energy prices to go much higher as it will have to do in order to make the Green New Deal even remotely viable.
Summary: It Is Biden's Fault
This didn't just happen; it was a result of poor planning and execution of the terrible policies of Biden and his administration. It isn't Putin or Ukraine or corporate greed but the fault of a feckless and incompetent Presidency. If Biden wants to blame someone, he should look in a mirror.