This week, it was reported the Biden administration has asked U.S. oil-and-gas companies for their help in lowering U.S. energy costs, as gasoline prices have skyrocketed to their highest level in seven years and the U.S. government expects household heating bills to jump as much as 54% compared to last winter.
Does anyone at 1600 Pennsylvania Avenue know the principles of supply and demand? If supply is reduced and demand remains the same, prices will increase—economics 101.
On day one in the Oval Office, Mr. Biden canceled the Keystone XL pipeline, killing 11,000 U.S. jobs and limiting supply. He’s placed a moratorium on new oil and gas leases on federal lands, threatening another 268,000 jobs and limiting U.S. production. The Biden administration has suspended oil and gas leases in Alaska’s Arctic National Wildlife Refuge. It is increasing the number of endangered-species protections to limit oil production on private land. Mr. Biden’s so-called “Build Back Better” plan will unleash a plethora of new taxes and regulations on the industry if passed by Congress.
Although the Biden administration hasn’t fully banned fracking, Energy Secretary Jennifer Granholm suggested it’s still a possibility and has even toyed with the idea of banning U.S. oil exports. These two moves would hasten the Biden administration’s transition to a green economy but would also be a kill shot to many domestic producers.
U.S. shale producers, which have driven the boom in U.S. crude output for the last decade, have taken note of Mr. Biden’s assault on their industry and have been less willing to drill new wells, which can take six months to complete and require significant investment. They are rightfully concerned Mr. Biden’s agenda will hamper any future profits.
Now, after a failed attempt to beg OPEC to boost more fossil-fuel production to ease prices at the pump, Mr. Biden is seeking help from the very industry he’s trying to eliminate.
U.S. oil and gas producers should tell him to take a long walk off a short pier.
“By pursuing policies that restrict supply and make it harder to produce oil and natural gas here in America, Americans will have to pay more for their energy,” Anne Bradbury, the chief executive officer at the American Exploration and Production Council, which lobbies for independent oil and gas producers told Reuters on the White House’s request for their aid.
It’s as simple as that. Restrict supply, prices will increase. If Mr. Biden were really serious about lowering energy prices for American consumers, he would tell the climate alarmists in his White House and within his party to calm down and embrace the production of U.S. oil and gas.
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