Secretary of State Antony J. Blinken meets with Saudi Foreign Minister Faisal bin Farhan Al Saud, at the U.S. Department of State in Washington, D.C., on October 14, 2021. [State Department photo by Freddie Everett/ Public Domain]
The Year (or Four) of Magical Thinking
Does Saudi oil have magical properties, wonders Amber Athey in SpectatorWorld.com, that make it incapable of contributing to climate change?
Making good on his pledge on the 2020 campaign trail to “end fossil fuels,” President Biden began his deliberate policy to curtail oil production and force a transition to battery powered transportation. Upon taking office, Biden, suspended all new gas and oil leases on federal property, culminating with the cancelation of the expansion of the Keystone XL pipeline.
Help! Where’s the Off Ramp?
Now faced with the consequences (new low: 35.1% approval rating) of his own actions, Joe Biden is looking for a way out.
Somehow, the Biden administration has decided it can still convince oil companies to ramp up domestic production in the short term while simultaneously promising to adhere to the president’s ambitious climate change goals in the long term. It’s an illogical all-stick, no-carrot approach — and unlikely to inspire oil companies to go along with the new plan.
Inconsistent Messaging
The Biden administration wants energy companies to do more now, to invest more now, when, in fact, in 5-10 years oil companies don’t think that demand will be there, as John Berman noted on CNN. Mr. Berman was addressing the inconsistencies in energy secretary Jennifer Granholm remarking on the need for oil companies to increase supplies, while she was admitting that in 5-10 years the U.S. plans to move to clean energy.
What company, asks Ms. Athey, would be idiotic enough to “reinvest profits into what the current administration is planning to make a dying industry?”
Unintended Consequences
Oil refiners argue that they are not able to magically increase supply to the levels demanded by the Biden administration.
Many refineries are undergoing seasonal as well as unplanned maintenance, oil reserves are low due to a pull-back on production during the first year or two of the pandemic, the war between Russia and Ukraine reduced supply, and many refineries went offline entirely because of the pandemic and/or natural disasters. It would take a lot of investment and a little bit of time to get things back on track.
A Self Inflicted Energy Disaster
Biden is blaming the record high profits for oil refiners on corporate greed, “rather than an amalgamation of undue circumstances. Biden is threatening these companies with emergency powers if they don’t boost supply,” continues Ms. Athey.
Well, yes, oil companies are certainly enjoying big profits, especially after several years of consumer demand being suppressed by lockdowns. However, it doesn’t stand to reason that refineries are intentionally choking supply to drive up prices.
If that were the case, however, some suppliers could take advantage by ramping up their production and undercutting their competitors, which would give them greater market share and, presumably, higher profitability.
Biden’s antagonistic relationship with domestic oil producers means, ultimately, he cannot rely on them and vice versa to alleviate the gas price hike. Instead, Biden plans to beg the Saudis for more oil. On the campaign trail, Biden said he was going to make Saudi Arabia “pay the price” and turn them into a “worldwide” pariah for their alleged killing of journalist Jamal Khashoggi. Now he is apparently treating them with greater respect than American companies.
Get Serious Mr. President
Joe Biden should stop his war with American oil companies. Our country needs long-term investment in domestic production. Instead, Biden is trying to have his cake and eat it too.
Destroying America’s Self Sufficiency
Replace with Middle East Oil
Stopping this administration’s war on U.S. oil companies would “alleviate the national security concerns inherent in relying on the Middle East for supply and help bring down costs for American families.”
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