Biden Administration Faces a New Crisis – Too Much Oil

One major element of the inflation that has turned many voters against the Biden administration is the rise in gasoline and energy prices. With the Presidential election fewer than eleven months away, American oil fields “are gushing again,” as the New York Times reports, with “energy companies cranking out a record 13.2 million barrels a day, more than Russia or Saudia Arabia,” with the flow expected to increase still more in 2024 , thus lowering the price drivers pay at the pump – as well as the cost of heating oil (along with gas). (Even with the surge in production, gasoline prices remain 48% higher than when Biden entered office, when they stood at $2.39.) While Biden blamed Vladimir Putin’s invasion of Ukraine for causing the subsequent rise in prices, and recently boasted that they have returned to the level they were at just prior to the invasion, the fact remains that by December of the same year, they had risen to over $3 per gallon – months before the Ukraine invasion.  (In June, 2022, early in the invasion, they peaked at an average of $5.06 per gallon, the highest on record, after which they started to drop below $4.00.)

One might expect Biden and his supporters to be rejoicing at the latest news. Unfortunately, according to the Times, “the comeback in U.S. oil poses big risks,” since “more supply and lower prices could increase demand for fossil fuels” just as “world leaders” were meeting in early December under the auspices of the U.N. in Dubai (the financial capital of the United Arab Emirates, whose income – unlike that of tiny Dubai itself – depends chiefly on oil) were “straining to reach agreements that would accelerate the fight against climate change.” According to “scientists” cited by the Times, “the world is far from achieving the goals necessary to avoid the catastrophic effects of global warming, which is caused mainly by the burning of fossil fuels like oil, natural gas, and coal.”

So, there’s the rub for Biden. Whom will he choose to satisfy – the bulk of the American population, whose economic status has been steadily worsened by the rising cost of fossil fuels, or his “green” supporters – fewer in number, but including many prominent rich liberals, along with young voters, for many of whom climate change has become a sort of religion, and whom his strategists have aimed to recruit for the campaign?

It’s not as if the President hasn’t tried to please the Greenies, having pledged at his inauguration to end oil and gas production on federal lands and waters. For instance, in September, The United States the Administration announced that it will hold just three offshore oil and gas lease sales over the next five years, the fewest in history,  the bare minimum that would allow the administration to continue holding lease sales for offshore wind structures under the so-called Inflation Reduction Act. (That legislation, negotiated with centrist Democrat Sen. Joe Manchin, and others, required that at least 60 million acres of offshore oil and gas leases be made available if the administration was to move ahead on its plan to develop 30 gigawatts of offshore wind farms by 2030.) And previously, Biden announced that it would bar oil drilling on millions of acres on Alaska’s North Slope and cancel previously issued oil leases on nearly half of the National Petroleum Reserve-Alaska, America’s biggest public land holding in the Arctic National Wildlife Refuge. Additionally, just prior to the summit, Vice President Kamala Harris (attending the conference in the President’s place) “highlighted” according to the Times “what she said was nearly $1 trillion in new spending” for “clean energy and climate efforts,” along with pledging the U.S. will send $ billion to the Green Climate Fund to assist poorer nations in reducing fossil fuel consumption. To top things off, the administration announced a crackdown on methane emissions that according to the Independent Petroleum Producers of America, which represents smaller oil companies, forecast will lead to the shutdown of 300,00 of America’s low-production wells, which will be unable to make the new requirements profitably. But the Greens are never satisfied and were denouncing the administration for authorizing a $3.4 million auction of oil and gas drilling rights in Wyoming just before the Dubai summit.

So Biden is torn, having “hectored oil companies to increase production” (and Saudi ruler Mohammad bin Salman, whom he had previously treated as a pariah) so as to drive consumer prices down, according to the Times, with John Kirby, spokesman for the Nation Security Council, explaining that the administration is committed to keeping energy prices down. And wind, sun, and electric cars aren’t going to do the trick in the foreseeable future, if ever. Moreover, reducing oil and gas prices really is an issue of national security, not only for the sake of preserving America’s energy independence from hostile foreign nations like Iran and Russia, but also to help our European allies overcome the energy shortage that hit them following Putin’s Ukraine invasion.

But blame for continuing high energy bills can’t be laid entirely at the feet of the national government. As Connecticut state senator Ryan Fazio pointed out in the December 3 New York Post, while electricity rates have risen substantially in recent years,” the U.S. and other developed nations will soon see “historic increases in electricity demand due to the electrification of vehicles and heating,” even as “base-load power plants … are slowly being replaced by less=reliable” wind turbines and solar panels. Some 36 states, Fazio reports, have Renewable Portfolio Standards (RPS) that require a certain percentage of power to be generated from “clean” energy sources – even as nearly all of them foolishly “exclude nuclear energy from RPS eligibility” and even limit, for no good reason, “the amount of hydropower that is eligible.” At least in Connecticut, where Democrats hold a majority in the legislature, a bipartisan compromise was reached to allow for more hydropower, and for any newly constructed nuclear plants to be eligible under the state’s RPS rules. If only, as Razio (a Republican) observes, this attitude had been adopted by state governments over the past few decades, when working nuclear plants in states like New York, Massachusetts, and Vermont were shut down, for no other reason than to please the environmental fanatics. (The Germans did something equally foolish under the influence of the Greens in shutting down their nuclear plants – even as neighboring France continues to draw most of its energy from such plants.)

As well-qualified students of climate issues like Steven E. Koonin, who served as undersecretary for science in President Obama’s energy department and is the author of Unsettled: What Climate Science Tells Us, What It Doesn’t, and Why It Matters) and Bjorn Lomborg, head of the Copenhagen Consensus and author of several books on the subject including False Alarm: How Climate Change Panci Costs Us Trillions, and Hurts the Poor, and Fails to Fix the Planet, have argued, the debate over the extent, the causes, the effects, and most effective and economical remedies for global warming, is far from over. And the democratic process, fortunately, compels even Democratic presidents to take account of popular demands that conflict with the claims of their most ideological supporters – as well as international security. It is long past time that someone in the Biden administration acknowledged this fact rather than papering it over.

Oh, but that’s not all. If the states, as Supreme Court justice Louis Brandeis once put it, are “laboratories of democracy,” able to try out on a more limited level experiments in innovative policy that may come to be adopted elsewhere, sometimes the labs seem to have been taken over by mad scientists. This is notably the case in California, which (as Allysia Finley reports in the Wall Street Journal) has enacted a requirement, conforming to the demands of some Greens at the Dubai conference, that livestock and dairy farmers reduce their animals’ methane emissions (that is, from flatulence and manure) to 40 percent below their 2013 levels by 2030 – since livestock emissions are said to constitute up to 17 percent of global greenhouse emissions and 32 percent of its methane (said to be 28 times as powerful as carbon dioxide). The state, assisted by the Federal government, plans to achieve this goal through a complex scheme of regulations and subsidies, which are likely to drive many farmers out of business. (The California rules will have a nationwide effect, as Finley points out, since they apply to any livestock raised in the U.S. and then sold in the state.) The result will be to reduce the supply of meat and dairy products and raise their cost.

Are ordinary Americans likely to accept a mandatory conversion to veganism just to ward off the supposed impending climate doom, just as some may have to give up driving once electric cars, far more expensive than gasoline-powered ones, become the only vehicles available for sale? Or will the people finally use their ballots to say “enough! And too much!”?

David Lewis Schaefer, Professor Emeritus of Political Science, College of the Holy Cross.