President Biden recently proposed suspending the federal gas tax for three months, the latest in a long line of failed efforts – including releasing crude oil from the Strategic Petroleum Reserve — to convince the American people that he cares about high gasoline prices.
Mr. Biden has even gone as far as haranguing oil companies — and sending them a strongly worded letter — and complaining that they are making money from the scarcity that he and his team have created.
The substantive outcomes of a suspension of the federal gas tax are pretty clear — the wholesalers, the retailers and the consumers are going to split the benefit in some fashion. Consumers might see as much as a nickel reduction per gallon. Not nothing, but not much either.
Everyone knows that Team Biden has no intention of addressing the underlying problem — global underinvestment in oil and natural gas development and refineries over the last few years specifically brought about by propaganda — mostly governmental — about the likelihood of net-zero greenhouse gas emissions by whenever and an energy “transition” that, to date, has been more ephemeral than substantial.
Josh Young, the chief investment officer at Bison Energy, notes that investment in U.S. oilfields peaked in 2012 at about $16.5 billion and dropped as low as $3.9 billion in 2021. That is not, as the young people like to say, sustainable.
On this very point, and in a display of clarity about what it cares about (hint: it’s not high prices), the International Energy Agency recently concluded that “our estimates for 2022 suggest that today’s aggregate fossil fuel investment is broadly aligned with the near-term needs of a scenario in which countries hit their climate pledges.”
In other words, the IEA doesn’t care about the need for more energy and consequently lower energy prices. It is focused on countries meeting their climate pledges.
The Biden crew’s message to oil companies is the same, but a bit more nuanced. Energy companies should invest in new production and new refineries immediately, and then shut the wells and close the refineries more or less as soon as prices moderate. This is to be done, same as the IEA, because of climate change.
That’s nonsense, and the leaders of the energy companies and their trade associations have been uncharacteristically clear in identifying it as such. The American Fuel and Petrochemical Manufacturers and the American Petroleum Institute offered this good advice to Mr. Biden: “Today’s situation did not materialize overnight and will not quickly be solved… To protect and foster U.S. energy security and refining capacity, we urge you to take steps to encourage more domestic energy production, including promoting infrastructure development, addressing escalating regulatory compliance costs… and ensuring capital markets are functioning for all participants.”
Team Biden also needs to publicly reject notions of net-zero, let go of the fantasy of banning gasoline-powered cars, and cease the jihad against oil and gas being waged by its own financial regulators. The chances of all that happening are zero.
It is time that people — especially the media and Republicans — have clarity in their own minds about that and share that clarity with others.
• Michael McKenna, a columnist for The Washington Times, is the president of MWR Strategies. He was most recently a deputy assistant to the president and deputy director of the Office of Legislative Affairs at the White House.
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