As the West unites behind the Ukrainian people, pump prices are skyrocketing. On Tuesday, President Joe Biden announced a ban on all Russian oil and gas imports — the right call, but one that will exacerbate the price crisis.
Even as Biden acknowledges the impending strain, he refuses to do what’s necessary. Rather than unleashing domestic oil and gas production, Biden has attempted to mark America’s energy industry as a boogeyman.
“We understand that Putin’s war against the people of Ukraine is causing prices to rise,” he admonished. “But it’s no excuse to exercise excessive price increases or padding profits or any kind of effort to exploit the situation for American consumers.” His suggestion that the energy industry is merely “profiteering or price-gouging” is presumptuous and dishonest.
His head in the sand, Biden asserted Tuesday, “Loosening environmental regulations and pulling back clean energy investment won’t — will not — lower energy prices for families. But transforming our economy to run on electric vehicles powered by clean energy, with tax credits to help American families winterize their homes and use less energy, will help.”
Newsflash for central planners: “Transforming an economy” takes time. Lots of time. But the national average for a gallon of gas has hit $4.17, the highest price on record. This is happening now.
Biden offers no relief beyond releasing 30 million barrels from the strategic petroleum reserve. And that’s a shallow gesture that won’t affect gas prices. Meanwhile, the president rejects the very idea that his own administration’s policies impede production.”It’s simply not true that my administration or policies are holding back domestic energy production,” the president fibbed.
Nonsense. As Western Energy Alliance President Kathleen Sgamma wrote, “There are six things [Biden] could do that would immediately unleash American oil and natural gas production by sending a few powerful signals.” These include halting “overreaching regulations” that “dampen investment in new production today because of uncertainty about burdensome red tape in the future.”
The oil and gas industry is highly capital-intensive. Companies make investment decisions extending out to a five- to 10-year time horizon. If the regulatory environment is not favorable to taking the considerable risk of investing in more production, they won’t do so.
Lambasting these companies, Biden alleged that “they could be drilling right now, yesterday, last week, last year. They have 9,000 [sites] to drill onshore that are already approved.”
The facts about federal oil leases are more complicated. There are 37,496 currently in effect but no guarantee of profitable extraction at each site. Leases are also often held up waiting for government approvals or slowed by litigation from environmental groups. Sometimes, an existing lease must be combined with a new one to make a full unit. Biden’s moratorium on onshore lease sales holds this up.
Gas prices were already rising before the invasion due largely to Biden’s anti-energy policies, without which we would be in a much better position to weather this storm. Yet, as you listen to the president, you can’t help but ask, “What kind of bubble is he living in?”
For the rest of us, it’s Biden’s alternate energy reality. We’re just living and suffering in it.
Jimmy Sengenberger is the host of Jimmy at the Crossroads, a web show in partnership with the Washington Examiner that focuses on the intersection of politics and economics, as well as The Jimmy Sengenberger Show on Denver’s News/Talk 710 KNUS.
