You saw Joe Biden demonize fracking and the oil industry throughout his campaign until the debates when Donald Trump cornered him on it, at which point he denied it all. Then, once he moved into the White House, Biden began his war on oil and helped to drive up prices on everything Americans need. At UnHerd, Ashley Rindsberg explains Biden’s war on oil and the mistakes he made that led to Americans paying so much for fuel. Rindsberg writes:
One of the many ironies of the Just Stop Oil movement is that, for the past year, their protests have been positively correlated with the price of oil. If you were tempted to indulge in a little schadenfreude, you might think that the infinitely annoying movement is putting money in the pockets of the world’s biggest fossil fuel producers.
The reality, however, is much grimmer. What has landed us here is a combination of three of the Biden administration’s signature policies — its aggressive support for ESG, its proxy war against Russia, and its sabre-rattling approach to China. The result is that the US is now in an energy chokehold right when the country needs as many options as possible.
After nearly two years of biting inflation, developed nations are starting to believe that the beast of relentlessly rising prices has been tamed. But as oil prices again barrel towards $100 — with one industry CEO predicting it could reach a devastating $150 — that could be about to change. Earlier this month, Saudi Arabia announced that it would extend a July production cut of one million barrels a day through the end of 2023. On its own, this news is bad enough. What makes it worse is that the Saudis are now apparently coordinating energy policy with America’s enemy number one, Russia, which has cut 300,000 barrels a day for the same period.
For Joe Biden, the timing couldn’t be worse. He is polling neck and neck with Donald Trump, and is facing an onslaught of challenges from House Republicans related to the business dealings of his son, Hunter. But from a policy point of view, the news is far more serious. The causes of surging oil prices trace back to structural changes Biden made to the economy, combined with now intractable foreign policy commitments, which, this late in the game, cannot be easily undone.
Those decisions go back to Biden’s very first day in office. On 20 January 2021, the new president signed an executive order revoking a permit required for the Keystone XL, an extension of an existing pipeline that would have transported an extra 830,000 barrels per day from Canadian oil fields to refineries in Texas. The move had its roots in Biden’s campaign strategy, which positioned Biden as a “climate change pioneer”. According to the text of Biden’s executive order: “The United States and the world face a climate crisis. That crisis must be met with action on a scale and at a speed commensurate with the need to avoid setting the world on a dangerous, potentially catastrophic, climate trajectory.” The Keystone XL pipeline “disserves” American interests, Biden said.
The media bolstered the decision, arguing that, with oil then trading at around $60 per barrel, the pipeline was not economically viable. But it would take just five months for oil to rise 50% to around $80, and a little more than a year for the price of oil to double to about $120 per barrel, pushing inflation up significantly. More importantly, Biden’s executive order and the decision by developers to abandon the pipeline signalled a shift in the policy winds on US energy and oil exploration. With the price of oil rising and the government taking an aggressive ESG-minded position on domestic exploration and development, oil producers went from investing in technologies such as new shale extraction methods to a new mode of profit-taking, where innovation is stopped in favour of extracting the profit from previous years’ investments.
When Biden signed the order, there was little or no inflation on the horizon. By the spring of that year, when inflation jumped to 4% and kept rising — with oil prices tracking it, resulting in a 50% jump in prices at the pump — the administration seemed to grow desperate. In November 2021, Biden began tapping the Strategic Petroleum Reserve, a reservoir of oil meant to weather the country through war. This began with an initial release of 50 million barrels (out of a total capacity of 714 million), in the hope that the move would lower fuel prices and curb inflation. It didn’t. Over the course of the subsequent year, Biden would release another 180 million barrels of oil from the SPR, leaving the SPR at its lowest level in four decades.
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E.J. Smith - Your Survival Guy
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