Energy Secretary Jennifer Granholm declared on CNN's State of the Union Sunday show that “we need to have increased [petroleum] production, so that everyday citizens in America will not be feeling this pain that they’re feeling right now.”
Mr. Biden himself will be visiting with the Saudi's, whom he evidently no longer regards as international pariahs, to coax them to increase their oil production so that our domestic gas prices will subside.
When Mr. Biden took office we were a net exporter of petroleum and natural gas and regular blend gas at the pump was averaging around $2.33 a gallon. Today, eighteen months later, it's hovering around $5.00/gallon and Mr. Biden wants to import from the Middle East to increase supply. What happened?
The President likes to blame Vladimir Putin's invasion of Ukraine, but as Karl Rove points out in a column at The Wall Street Journal (subscription) 56% of the price increase occurred before Putin launched his invasion.
Though the administration is loath to talk about it what happened is that, as Rove writes, "Since taking office, Mr. Biden has labored hard to make American fossil-fuel production more costly so green energy alternatives become more attractive. He succeeded, and the result is record prices."
What, exactly, did the Biden administration do? Rove explains:
On his first day in office, Mr. Biden canceled the Keystone XL pipeline and halted new leases in Alaska’s Arctic National Wildlife Refuge. A week later, he banned new oil and gas leases on federal lands and waters, and in June he shut down exploration on existing leases in ANWR.Given this environment it's little wonder that oil companies are reluctant to invest in upgraded refining capacity. Why should they spend millions, or even billions, of dollars on refineries when the administration has made it clear that they want to put petroleum companies out of business?
In October, he increased the regulatory burdens on building pipelines and other infrastructure.
This February he limited leasing in Alaska’s National Petroleum Reserve. At every turn Team Biden has worked to restrict and reduce domestic oil and gas production.
Almost a year after a federal judge enjoined the White House from implementing its pause on leases in federal lands and waters, the administration in April finally offered 144,400 acres for exploration—only 20% of the acreage originally slated for this tranche of leases.
The administration also raised the federal royalty by 50%, increasing the cost on American consumers. It nominated regulatory officials hostile to fossil fuels and issued climate disclosure rules that made lenders skittish about providing capital.
Team Biden got what it wanted: Daily U.S. oil production dropped from 12.29 million barrels in 2019 to an estimated 11.85 million in 2022, well after demand had rebounded from the pandemic.
Mr. Biden is demanding that oil CEOs increase production while he has both hands around their throats strangling them to death. Not content with what he's done so far to throttle the industry he's now...
...threatening a windfall-profits tax, even though oil and gas production saw only a 4.7% net profit margin last year. Compare that with Microsoft’s 39% net margin, Facebook’s 33%, Google’s 30% and Apple’s 27%. Yet Mr. Biden won’t confiscate tech company profits.Nothing the president has done to alleviate the burden on consumers has, or will, accomplish anything substantial or permanent. Neither releasing a few million gallons from the petroleum reserve or declaring a moratorium on the federal gas tax will result in a significant or lasting reduction in the price of gasoline nor the price of everything else that's manufactured and brought to market by gasoline.
Here's Rove:
If Mr. Biden were serious about lowering fuel prices, he’d follow the advice of President Clinton’s Treasury Secretary Larry Summers, who suggested Sunday “an all-in more-energy-supply approach that emphasizes freeing up fossil fuels.”Rove offers some specifics:
That means undoing all of Mr. Biden’s earlier decisions that pushed oil and gas prices up. It’s important to start now. It took a year and a half of bad actions to get here; it’ll take time to increase supply and thereby produce downward pressure on prices.
To begin, Mr. Biden should stop the Environmental Protection Agency’s assault on small U.S. refineries, which produce roughly 30% of America’s gasoline and diesel.Mr. Biden and his progressive allies wanted to crush the fossil fuel industry. Everything they're doing is to that end and they're succeeding.
Longstanding EPA regulations require them to blend renewable fuel into their product or purchase special credits in a marketplace, but most can’t blend in ethanol because it’s too corrosive to be moved through pipelines. The EPA has long solved this problem by routinely granting these refiners exemptions if no credits are available, as provided by law.
Earlier this month, the EPA announced it is essentially ending exemptions and punishing refiners by retroactively denying exemptions back to 2016, requiring the industry to pay billions.
Even the EPA admits consumers will have to cover these costs. Industry leaders fear some refineries won’t be able to operate under the new regime and will instead shut down, reducing the supply of gasoline and diesel still further.
Perhaps those who voted for them are delighted every time they pull into the gas station, but I doubt the rest of us are.