116 3rd St SE
Cedar Rapids, Iowa 52401
The Biden administration’s energy policy is leading us on a collision course with the multiple other crises we are facing. Let’s take a step back and look at where we started and where we are today. First, we all can remember what President Joe Biden, then candidate Biden, said about fossil fuels during the Democratic debates: “No more, no new fracking.”
Fast forward to the early days of the administration. Biden signs an executive order cancelling the construction of the Keystone XL pipeline on his first day in office. Now, if we’re being honest, one less pipeline won’t lead us to an energy crisis. Recent data by the American Petroleum Institute puts total mileage of all types of pipelines at nearly 2.6 million miles. The Keystone pipeline was expected to total 2,147 miles when completed. So really a small drop in a very large bucket.
Sure, the loss of jobs for the union pipeline construction workers was devastating, but it was the statement this administration was making that was much more profound. It was a complete reversal from the Trump administration and it sent a message that this administration was going to be a thorn in the side of the non-renewable energy sector. What came next was another devastating blow to the industry.
Biden in January signed an executive order on “Tackling the Climate Crisis at Home and Abroad,” moved to “pause all new oil and natural gas leases on public lands or in offshore waters pending completion of a comprehensive review.” It also required the Office of Management and Budget along with the National Climate council to “take steps to ensure that, to the extent consistent with applicable law, Federal funding is not directly subsidizing fossil fuels.”
The messaging from this administration is clear, they are moving towards an energy policy that will destroy industry and shove the cost onto the American public. This perfectly aligns with their economic policy of endless federal spending and money printing from the Federal Reserve. Inflation registered at a 5.3 percent annual clip according to the Bureau of Labor Statistics for the month August. Since President Biden took office gas prices moved from an average of $2.37 per gallon to $3.19 per gallon. These are real costs that affect all Americans across the country at a time when wages have been stagnant. Looking forward, there is not much to be excited about.
The Wall Street Journal recently reported that China is beginning to see power shortfalls and local governments have begun instituting power caps on local manufacturers. This will have major implications on an already strained supply chain that has had inflationary pressure not only here in the U.S. but globally as demand has increased coming out of the pandemic. Ultimately the power crunch as reported by the Journal is due to China’s effort to “limit carbon emissions,” a policy objective very similar to our current administration in the U.S.
Before the pandemic hit, U.S. oil production stood at a weekly average of 12,975 thousand barrels a day. Last week production averaged 10,450 thousand barrels a day according to the U.S. Energy Administration. Meanwhile consumption is up from 19,602 thousand barrels a day at 20,391 thousand barrels a day. Imports have remained stable during this time period, but recent news from OPEC may indicate that supply will take a deeper hit just as we begin to enter the winter months where natural gas used to heat homes across the majority of the U.S. increases. An application of basic economics tells us that higher prices will be the inevitable result of this demand and supply mismatch.
Who are the real winners? We have a border crisis, inflation crisis, employee shortage, Chinese aggression and now an energy crisis looming. As far as I can tell the only winners seem to be subsidized renewable energy companies and Wall Street firms who bought oil futures contracts earlier this year. As usual, due to bad policy from our federal government, the American people lose.
John Freese lives in Cedar Rapids.