With a gallon of gas averaging $4.19 nationwide and $5.74 in California, Americans are being told soaring energy prices are an ephemeral problem created by Russia’s invasion of Ukraine that have nothing to do with Joe Biden’s long-term energy policies.
Gasoline gets all the attention because it’s so visible on a per-gallon basis. In fact, prices for all forms of fossil fuels are up across the board—energy jumped 33.9% in March from a year earlier.
In placing the blame exclusively on Vladimir Putin, Biden must be counting on the American people to be consuming steady amounts of Russian vodka, thereby impairing their ability to create and retain short-term memories. The past twelve months, for example.
Unfortunately for Sleepy Joe, the folks at the New York Post were sober enough to put together a timeline of gasoline prices since Biden took office. They matched the timeline against significant announcements on energy policy being made by the administration.
Since Biden took office, and just prior to the Russia invasion, gasoline prices across the country increased on average by 48.3%. The US, which had been a net exporter of oil as recently as 2019 is now importing more than it exports. We have quickly moved from “energy independent” to again relying on those outside our shores to power our vehicles, heat our homes, and make our factories hum.
Some of what Biden has done to drive up energy prices since taking office include:
- Halted oil and gas leases in Alaska’s Arctic National Wildlife Refuge
- Directed the Interior Department to stop oil and natural-gas leases on federal lands and in public waters.
- Signed an executive order requiring federal agencies to calculate the highly speculative risk of global warming
He also stopped work on the Keystone XL pipeline from Canada as soon as he took office. How does stopping the construction of something that won’t produce oil flow until a later date impact prices today, you ask? The simple answer is that like with other commodities, the price of oil today is determined by both its current availability and price, combined with its anticipated future availability and price. Biden stopping the future flow of lower cost fuel from Canada changed the calculus for current energy pricing.
Not only is Joe Biden responsible for the increase in energy prices, but he actually told us he was going to increase energy prices before we elected him. Joe Biden is doing exactly what he said he was going to do.
As cited in the same NY Post article, Biden told New Hampshire voters on September 19, 2019, “I guarantee you, we’re going to end fossil fuels.” When asked during the October 22, 2020 presidential debate, “Would you close down the oil industry?” Biden replied, “I would transition from the oil industry.”
There are multiple forces at work that have led to the greatest price increases we’ve experienced since the early 1980’s.
- We have deliberately damaged the supply of energy from domestic sources: This is what I highlighted above. Biden’s policies have impacted both current production capabilities and future anticipated capabilities. This has the effect of decreasing supply and when supply decreases, prices increase.
- We have greatly increased our money supply beyond our increase in goods and services. This is the actual definition of inflation. The Consumer Price Index jumped 7.9% in February, the largest single month increase in 40 years. Increasing prices are a symptom of inflation and a convenient way to measure its impact. But actual inflation is caused when the supply of money increases so fast that there ends up being too much of it chasing too few goods. Biden did not start it, but he has added fuel to our monetary fire.
- We were recovering from being locked down for a year-plus and people had started spending money again: Not only was the money supply increasing too fast in terms of available dollars, but prior to Russia invading Ukraine, the American consumer was coming out of their masked shell and beginning to spend money again. Some of that money got put into their pockets by the government printing it and handing it to them in the form of Covid relief payments. So, there was a combined effect of too much money chasing too few goods and chasing them faster.
- The cost of energy is a component cost of virtually everything so the upward pressure on prices gets amplified. As Biden drove up energy prices through his polices to curtail domestic production, he was driving up the cost to every goods and service provider in the country. How do you get the merchandise to your store shelves? How do you pay for gas driving to work at the beauty shop? And so on. Biden’s energy policies did not single-handedly cause inflation, but they have allowed inflation to flourish.
Joe Biden, with his combined ideals of “green energy” and “printing greenbacks”, has made high prices a phenomenon that will linger for the near and intermediate-term future. Large domestic energy companies have been hamstrung in their ability to explore for and extract domestic oil and gas reserves. Even if the Russia-Ukraine war ended tomorrow, (and it won’t), US dependence on foreign oil and the corresponding higher prices will not end.
Recently the Wall Street Journal ran a piece titled “Oil Markets’ Big Winners: Little Guys Who Are Eager to drill.” The article chooses as its focal point 84-year-old Autry Stevens, who owns Endeavor Energy Sources. His company, like other independents, has not been as hampered by the Biden Administration’s new anti-energy policies. Stevens is now reportedly worth over $10 billion after having been in financial trouble just a few short years ago.
The article points out that independent energy firms are now operating 62% of our oil and gas rigs compared to 49% just a few years ago. That’s good news, right? The triumph of private business and the resourcefulness of free market capitalism are coming to the rescue. Here’s why the good news is bad news. The independent companies don’t have the great resources to extract oil from various US locations. The big companies can best do that. The gathering strength of the smaller independents, good news in an unregulated economy, here is a canary in a coal mine for American consumers.
Joe Biden did this. And he did it on purpose. What’s worse is that he told us he was going to do it before he was elected. But the greatest tragedy is that Americans either didn’t believe it, understand it, or care about it. They care now. Unfortunately, we have to wait until the November mid-term elections to find out just how much they really care.
- OPINION: Joe Biden’s War on Energy Has Weakened America - May 3, 2022