Some Basic Truths on Oil

In 2020, Joe Biden declared war on oil and gas in America. In a Democratic primary debate, Biden declared, “No more subsidies for the fossil fuel industry. No more drilling including offshore. No ability for the oil industry to continue to drill period. It ends.” High gas prices are all part of his plan.

Dan O'Donnell @DanODonnellShow

Joe Biden in 2020: "No more subsidies for the fossil fuel industry. No more drilling including offshore. No ability for the oil industry to continue to drill period. It ends."

Yesterday, Biden declared that there was nothing his administration had done to raise prices or restrict drilling. Actually, there are plenty of regulatory measures taken and offshore leases curtailed. More importantly, Biden declared war on fossil fuels.

If you were an investor, would you invest in a company the President of the United States declared on? The Biden Administration’s entire posture has been against the oil and gas industry, which has fostered uncertainty in the market and disincentivized further investment. They have coupled this with regulatory gusto. They have additionally refused to fight activist Obama-appointed judges using climate change as an excuse to shut down offshore oil drilling.

In a strange bit of optics, as the President was suspending Russian oil imports yesterday, he requested $2.6 billion for “gender equity” globally. He’s causing American energy price increases and wasting billions on nonsense. Now, he wants to blame the Russian oil imports for high gas prices, which were high before the ban. In doing so, Biden noted American oil producers produced more oil in his first year than in Trump’s first year.

That is a sleight of hand that highlights just how disingenuous Biden is being. Trump’s first year had been preceded by the oil hostile Obama Administration. Trump got oil flowing again onshore and offshore. Trump’s second year outpaced Biden’s first year. In fact, years two through four of Donald Trump’s tenure each saw more oil produced than Biden’s first year. In other words, the truth is that oil production fell once Biden got in office.

But there is something else.

Oil hit $147.90 on July 14, 2008. That was and remains the record. But oil plunged the next day. By the end of that week, oil prices were down twelve percent. By November, oil was back to $30 a barrel.

What caused the plunge on July 15, 2008?

President George W. Bush announced he was authorizing offshore oil exploration.

That’s it. That’s the only thing that happened. News outlets said it would amount to nothing. The Obama campaign team dismissed it as a stunt. It directly caused the price of oil to start declining.

Why?

Because oil is bought in a futures market, not a present market. The market responded to the information that more American oil would be coming online by sending prices down.

The United States now has larger oil reserves than either Russia or Saudi Arabia.

The U.S. is sitting on 264 billion barrels, 8 billion barrels more than Russia and 52 billion more than Saudi Arabia, the dominant member of the Organization of Petroleum Exporting Countries (OPEC), according to the report by Rystad Energy, a respected oil and gas consulting firm based in Oslo. Three years ago, the U.S. was behind Russia, Saudi Arabia and Canada in Rystad’s estimates of recoverable oil — barrels that are technologically and economically feasible to extract.

If President Biden committed to tapping our oil reserves and expanding domestic energy production, oil markets would respond rapidly, just as they did in 2008.

Instead, even now, his administration dogmatically demands Americans switch to electric vehicles and get off fossil fuels. His administration continually, daily signals that they will put the fossil fuel industry out of business. They thereby disincentivize investments in oil and gas, driving up costs on the American people.

Decline is a choice and it is one Joe Biden’s Administration is making on the backs of the American middle class. Their Marie Antoinette moment of “let them have EVs” is going to provoke a backlash.

They can blame Vladimir Putin all they want. Banning imports of Russian oil was the right thing to do — but it should responsibly be done by expanding American energy production, not relying on Venezuela, Iran, and Saudi Arabia.

The Biden Administration is engaging in malfeasance, catering to the privileged white elite and their climate change fears instead of to most Americans who fear not being able to make ends meet due to Biden’s policies. Just watch the clip below. Listen to former Governor Chris Christie, but pay attention to George Stephanopoulos. He is aghast Christie would want more energy production because, according to Stephanopoulos, climate change is an “existential threat."

Erick Erickson @EWErickson

The Stephanoupolos bit at the end of this @GovChristie clip is telling. So much of the media is on the left's side on energy production much of the press itself will fight against our energy independence. The GOP has a winning issue on its hands.

George Stephanopoulos makes $15 million a year. He can afford high gas prices or a Tesla. You probably can’t. But you are held hostage to the whims of the elite who think they know better than you even as they can afford those things you cannot.

This is not Putin’s fault. This is the Democrats’ fault.