The precipitous rise in prices for gas and virtually every other commodity comes from massive government spending atop regulatory strictures that diminish supply, particularly of domestic oil and natural gas. The explosion in federal spending, including Biden’s $1.9 trillion American Rescue Plan Act and his $1.2 trillion Infrastructure Investment and Jobs Act, has catapulted the nation into over $30 trillion in debt, pushing federal dollars into the economy at an alarming rate, the highest in American history. The inflationary impact of that profligate spending is aggravated by government-induced shortages in oil and gas, which not only raise gas prices but also drive up the cost of all goods and services and induce supply chain disruptions. These are structural catalysts to inflation and supply shortages that will feed cost spirals until government gets out of the way. President Biden knows only one direction, more government. He refuses to accept any responsibility for the inflation caused by his massive federal spending and overregulation, and he hopes by misleading the American people he can save his party from a drubbing in the mid-terms.
Indeed, with an astounding disregard for American welfare (some one in five Americans likely cannot afford basic food requirements to last a full month), Biden demands that trillions more taxpayer dollars be spent (presuming against basic economic laws and global monetary history that more spending will eliminate inflation). He endlessly recites half-baked calls for trillion-dollar versions of his once vaunted (and monstrous) $3.5 trillion Build Back Better plan, and he seriously entertains an illegal executive order to pay off upwards of $1.6 trillion of student loan debt. Not even the temporally and spatially challenged Biden is oblivious to the association between government spending and inflation or between supply killing regulation and inflation. In truth, he simply does not care. If achieving his socialist agenda requires most Americans to suffer impoverishment, so be it. He will not admit that intention. He adopts instead the pedestrian political tactic of shifting blame to his opponents.
Biden seems to be counting on a big fat energy lie to beguile voters in the mid-terms, hoping they will think his socialist spending and green overregulation have nothing at all to do with skyrocketing retail costs and a reduction in standards of living. Rather, on May 10, without a shred of evidence, he told the American people a whopper: that Putin, oil companies, the pandemic, and “ultra-MAGA” Republicans are to blame for inflation. Those sordid, largely amorphous evil spirits are to blame (how, he would not say).
On March 8, Biden lamely insisted: “It’s simply not true that my administration or policies are holding back domestic energy production.” Indeed, the White House pledged with a wink and a nod to “do everything we can to reduce the impact that high gas prices have on Americans.” A day before Biden spoke, then White House Press Secretary Jen Psaki told Peter Doocy that the Biden Administration had not placed “any limits on oil companies’ ability to make use of current drilling leases” and that “there are 9,000 approved drilling permits that are not being used, so the suggestion that we are not allowing companies to drill is inaccurate.” Psaki, like Biden, misleads. They really do know better.
In reality, the only thing standing between a glut of American gas and oil and American consumers are federal and state regulations. America is rich in fossil fuels, including oil and natural gas. We have enormous untapped reserves that could last one hundred years or more. If accessed, refined, and brought to market, domestic oil and gas could drive down prices at the pump, drive down jet fuel prices and corresponding ticket prices, and could drive down prices of consumer goods. The issue is not one of availability. Government green regulatory impediments stand in the way of access, refining, and distribution. For example, in the Marcellus Shale and Point Pleasant-Utica Shale formations in the Appalachian Basin, the US Geological Survey estimates that some 214 trillion cubic feet of natural gas is capable of being harvested. Yet, FERC, DOT, BLM, and EPA, not to mention state agencies, stand in the way of pipeline construction, production, and refining needed to bring that gas to market. In the North Central Slope of Alaska, the US Geological Survey estimates that there are 3.6 billion barrels of oil and 19.78 trillion cubic feet of natural gas capable of being harvested. Yet, on April 25, the BLM ordered the closure of about ½ of the Alaskan National Petroleum Reserve to drilling, ending President Trump’s plan for harvesting those resources, hearkening back to Obama Administration policies that aim to put the kibosh on oil and gas production. If the Keystone XL pipeline were completed, rather than truck at considerable expense a subset of the available tar sands oil from Alberta, Canada into the United States, a continuous flow of some 830,000 barrels per day would reach the Gulf Coast of Texas for refining. Yet, on January 20, by executive order, Biden shuttered the Keystone XL pipeline. If far more of America’s oil and natural gas reserves were opened for production and pipeline distribution, the United States would not only be energy independent but could supply all of Europe’s needs through liquified natural gas depots.
Plagued by ever increasing federal and state regulations, the existing production of oil and natural gas is slated for elimination by the Biden Administration within the decade in accordance with Biden’s climate change objectives. Those objectives, which are government-wide, remain in place, belying Biden’s statement to the American people that everything that can be done will be done to lessen gas prices. As manufacturers of domestic sources of oil and gas continue to be disincentivized by this administration to remain in business and as federal regulations increasingly make oil and gas production unpredictable and unaffordable, fuel prices will continue to rise and resulting across-market inflation will add to consumer misery.
Moreover, the 9,000 drilling permits (9,173) held by companies cited by the President and Psaki is but a minor subset of the number needed to ensure meaningful oil and gas production. Moreover, in addition to drilling permits and compliance with a plethora of environmental regulations, companies must obtain development and operating permits before production commences. In addition, pipelines must be accessible for major production and pipeline permits must be granted first. Those in this sector have watched the Biden Administration’s climate change agenda being translated into regulatory strictures at every stage of the process, imposed by politically appointed far-left green zealots beholden to Biden’s climate change agenda, making it all but impossible to have the kind of predictability and affordability required to invest in costly equipment, rigs, and labor.
Further belying Biden and Psaki’s contention is the reality that BLM issuance of drilling permits is way down from its peak of 643 last April to just 171 in August. Finally, EPA, among other federal agencies, is pushing hard to impose more costly NEPA requirements, expanding the instances in which environmental impact statements and assessments must be performed as conditions precedent to permit approvals. Far from doing everything he can to enable access to America’s rich oil and gas reserves, Biden is behind the scenes doing everything he can to bring about the demise of America’s oil and gas industry. By his actions, Biden wants to achieve elimination of fossil fuels regardless of the cost borne by the American people. His actions speak louder than his false promises.