Are you enjoying this historic surge in consumer product shortages and inflation, which the White House in its best Marie Antoinette impression labels a “high-class problem?”
Well, get ready, because it’s about to get even worse.
The federal government warned just last week that Americans should expect significantly higher heating bills this winter. Specifically, the Energy Information Administration projects that approximately half of U.S. households that heat with natural gas will pay an average of 30% more this year than last year, which will increase to 50% higher if winter is merely 10% colder this year than last:
Compared with last winter, we forecast propane expenditures will rise by 54%, heating oil by 43%, natural gas by 30%, and electricity by 6%. We expect space heating demand to generally be higher this winter based on forecasts from the National Oceanic and Atmospheric Administration (NOAA) that U.S. average heating degree days will be 3% higher than last winter (Winter Fuels Outlook). Altering our assumptions for a 10% colder-than-expected winter significantly increases forecast expenditures, while a 10% warmer-than-expected winter still results in increased expenditures, because of price increases.
If that sounds like bad news, well, The Washington Post has a message for you: Get over it, you spoiled brats. “Time for some new, more realistic expectations,” Post columnist Micheline Maynard lectures, concluding that, “we’d do ourselves a favor by consciously lowering expectations.”
Just three months ago, Joe Biden snapped that “no serious economist” suggested that runaway inflation was any threat. Then, his administration frantically pivoted to assuring us that the problem was merely “transitory.” Now that higher gas prices and overall inflation remain stubbornly and alarmingly persistent, they’re switching to mocking Americans’ “high-class” expectations and Jen Psaki’s “tragedy of the treadmill delayed” snark.
Next thing you know, they’ll be lecturing us that Soviet-style shortages and gas lines are actually a good thing. Oh, wait – they already have.
Although the Biden Administration rationalizes that this is all a problem of surging demand rather than any sort of Biden Administration blunder, the International Energy Agency reports that global oil demand won’t reach pre-pandemic levels until next year.
Meanwhile, the production side is under assault. Between 2010 and 2015, according to Rystad Energy, global oil and gas exploration investment averaged approximately $100 billion per year. Since 2015, however, that investment average had fallen 50% to $50 billion per year. This year alone, aggregate investment will be down approximately 26% from pre-pandemic levels.
And why would that be otherwise? European regimes continue to shut down exploration and production, while the Biden Administration has made domestic U.S. energy production Public Enemy Number One. On his very first day as president, Biden halted the Keystone XL pipeline and subsequently imposed a moratorium on oil and gas leases on federal lands. Since that time, the administration has slashed drilling permits by 75%. These and other innumerable Biden Administration actions have sent an unmistakable signal to our energy sector that their days are numbered.
In addition to punishing American consumers, the Biden Administration’s actions only serve to empower oil-rich dictatorships like Russia and Iran.
By artificially limiting domestic energy investment and production, while Europe does the same, Biden proportionately empowers nations like Russia and Iran to fill that gap. If consumer demand remains steady but domestic production falls, we collectively place ourselves back at the mercies of those authoritarian regimes.
Keep in mind that Trump Administration sanctions had Iran’s economy on the ropes, and American energy production increases had relegated Russia’s Vladimir Putin to increasing irrelevancy. But then Biden arrived, and canceled the Keystone XL pipeline while inexplicably lifting sanctions on Russia’s Nord Stream 2 pipeline to Europe. Wasn’t Trump supposed to be the one engaging in Russian “collusion?”
Now, in “You Can’t Make This Stuff Up” news, Politico reports that Biden is begging oil industry leaders to help bring down rapidly rising gas prices while broader consumer inflation threatens to cripple what had been a surging economy that he inherited from Trump. This comes on the heels of Biden approaching OPEC hat-in-hand for help in boosting global oil production.
Had Biden simply done nothing upon entering office and maintained President Trump’s more market-based energy policies, this rolling catastrophe might’ve been avoided. Under Trump we became energy independent and prices plummeted, which finally made good on what for decades was considered a laughable pipe dream to which presidents since Nixon had rhetorically aspired, but maintained no serious hope of accomplishing.
But then we actually did it.
To relieve American consumers from escalating energy prices while increasing pressure on oil autocracies like Russia and Iran, the solution is obvious. We must return to an “all of the above” energy policy that relies upon market forces, not “Green New Deal” dictates. The choice is a simple one.
Reprinted with Permission from - Center For Individual Freedom by - Timothy H. Lee
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