Mar 9, 2022

Breaking Down Joe Biden's War on Gas Prices

To understand the high gas prices, the focus should be on Biden's renewable energy aspirations, which have enabled rising prices since his inauguration.
Breaking Down Joe Biden's War on Gas Prices

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“No more subsidies for the fossil fuel industry. No more drilling, including offshore. No ability for the oil industry to continue to drill period. It ends.” - Biden 2020

As a candidate, Biden campaigned on replacing oil and gas with renewables. As a president, he's strived to keep those promises.

Some of Biden's actions to date

  1. Jan 2021 (Avg. Gas Price: $2.33) Through an executive order, Biden began halting oil and gas leasing on federal lands and waters.
  2. Jan 2021 (Avg. Gas Price: $2.33) Biden directed government agencies to eliminate fossil fuel subsidies by 2022.
  3. May 2021 (Avg. Gas Price: $3.11) The Biden Administration pressured big banks to divest from traditional energy investments.
  4. June 2021 (Avg. Gas Price: $3.15) Biden revokes permit and cancels Keystone XL pipeline.
  5. Aug 2021 (Avg. Gas Price: $3.25) Called on Russia and OPEC to increase their oil production to counter rising prices instead of increasing domestic production.
  6. Aug 2021 (Avg. Gas Price: $3.25) Increased regulations and scrutiny to punish and sanction the fossil fuel industry.
  7. Dec 2021 (Avg. Gas Price: $3.39) Biden halted federal aid for new fossil fuel projects abroad.
  8. Feb 22.2022 (Avg. Gas Price: $3.90), Just moments before Russia's invasion, Biden delayed issuing new oil and gas drilling permits on federal land.
  9. March 8.2022 (Avg. Gas Price: $4.25) Biden banned Russian oil imports. Other European countries have not followed suit, hurting America more than Russia.

The result of green policies: The Biden Administration limited fossil-fuel production but did little to lessen dependence. With a lower supply and consistent demand, high prices aren't a surprise; they're expected. This is an open strategy to promote the switch to renewables.

A welcomed result: It's no secret that climate activists who want to move away from fossil fuels celebrate high gas prices. It means what they're doing is working.

Big picture: As gas prices rose because of global supply constraints in the pandemic era, Biden exacerbated the issue with his green policies.

The administration's response

Blaming domestic oil producers: Yesterday, when asked about the prices, Biden responded, "Can't do much right now. Russia is responsible.” Jen Psaki took a different route and blamed oil producers for not drilling more. Executives from the oil industry claimed that Psaki was purposefully ignorant of the drilling process.

  • Sen. Marco Rubio told Fox News he had “never seen such a level of disingenuity.”

Promoting electric vehicles: Transportation Secretary Pete Buttigieg and others presented a simple solution for the current gas crisis: electric vehicles. The average price for an EV is $56,000, and the median household income in the U.S. is $67,000.

Replacing one regime with three others: After ditching Putin's oil, Biden is now pressing countries like Saudi Arabia, Iran, and Venezuela to help curb America's rising gas prices.

Oil executives ‘mystified’: As of a week ago, Joe Biden hasn't been reaching out to the oil executives to curb the gas crisis in the country. Devon Energy Corp. CEO Muncrief was “mystified” that there wasn't any dialog.

Media's response

The media defends Biden: Dozens of headlines from outlets like CNN, NYC, and MSNBC suggest that Republicans wrongly blame Biden for the crisis. Most of the articles point to the supply chain crisis that resulted from the pandemic but ignored Biden's policies that exacerbated the problem.

  • Some mention that Biden's first-year oil output was higher than Trump's first year. This is primarily misleading, considering both Trump's second and third years were significantly higher in production than Biden's first year.

Media suggests higher prices are worth it: Instead of playing the blame game, some outlets are pushing the narrative that the higher gas prices are worth supporting Ukraine. This is not a great argument, considering that Russia will easily replace U.S. oil purchases. China is already pushing state-owned companies to purchase oil from Russia.

Our reliance on Russian oil

We’re a net importer of oil: The U.S. produces 11.3 million barrels per day (BPD) but consumes 17.2 million BPD. Despite producing more than any other country, we still need to import to meet our needs.

Russia supplies seven percent: Russia supplies 7%–a significant amount–of our oil. Because of our massive energy demands, replacing that oil will put more pressure on global prices. Essentially, prices will still surge even if we successfully replace Russia’s oil.

Replacing Russian oil: Some analysts are saying that even if we strike a deal with OPEC, Venezuela, or Iran, the imports would be insufficient to fully replace our imports from Russia.

  • Note: OPEC allies like Iran and Venezuela have been sanctioned by the United States. They’ve maintained unwillingness to provide relief.
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