Recently, the White House endorsed a three-month suspension of the gas tax, a move that will cost billions of dollars. The plan will result in even higher inflation as more dollars will have to be printed to finance it.
Americans are intensely suffering from high energy prices, a direct result of President Biden’s deliberate elimination of the nation’s energy independence. The cost hikes were not unexpected. Indeed, as former President Obama once said, for the Democrats’ energy policies to work, “Prices must necessarily skyrocket.”
Closing down the Keystone Pipeline, preventing drilling in ANWAR, stopping fracking on federal lands, pressuring banks to not lend to energy companies, and more, not only resulted in a dramatic increase in fuel prices, but led to massive inflation, since every commodity is both manufactured using energy and transported to consumers using energy.
Investopedia’s Nick Lioudis points out the direct link between inflation and high energy costs. Among the key points: “Energy accounted for about 7.3% of the CPI as of December 2021, including the index weighting of about 4% for energy commodities. In addition to that direct effect on inflation, higher oil prices raise inflation indirectly because crude oil is a key ingredient in petrochemicals used to make plastic. So, more expensive oil will tend to increase the prices of many products made with plastic…Federal Reserve Chair Jerome Powell said in his semiannual testimony before the U.S. Senate Banking Committee in March 2022 that, as a rule of thumb, every $10 per barrel increase in the price of crude oil raises inflation by 0.2% and sets back economic growth 0.1%.”
Many addressed the irrationality of the move. . House Committee on Natural Resources Ranking Member Bruce Westerman (R-Ark.) stated at the time “We’ve made incredible progress over the years, making our energy cleaner, cheaper, and safer than ever. We should continue producing it here at home, where we can regulate the environmental standards and pollution requirements. Instead, President Biden is cutting off our supply while the demand continues to grow, forcing us to depend on energy from overseas where we can control none of these environmental regulations. Energy policy should be a rational, long-term plan not a knee-jerk, unscientific decision that does absolutely nothing to help the environment.”
The move emboldened the nation’s enemies. Russia’s most important asset is its energy sector. It profited immensely from Biden’s war on fossil fuels, allowing it to finance its war on Ukraine. China, where most solar panels and windmills are created, also benefits.
The Administration still has not answered the most basic question: since renewables can only meet about 20% of energy needs for at least several decades, where will the rest come from?
Despite the deep pain and international crises resulting from his energy policy, Biden shows no sign of addressing the crisis, other than temporary gimmicks. On September 9, 2019, then-candidate Joe Biden made a clear and unequivocal promise: I want you to just take a look. I want you to look into my eyes. I guarantee you; I guarantee you, we are going to end fossil fuel, and I am not going to cooperate with them.”
Nick Lioudis, writing in Investopedia points out the direct link between inflation and high energy costs. Among the key points: “Energy accounted for about 7.3% of the CPI as of December 2021, including the index weighting of about 4% for energy commodities. In addition to that direct effect on inflation, higher oil prices raise inflation indirectly because crude oil is a key ingredient in petrochemicals used to make plastic. So, more expensive oil will tend to increase the prices of many products made with plastic…Federal Reserve Chair Jerome Powell said in his semiannual testimony before the U.S. Senate Banking Committee in March 2022 that, as a rule of thumb, every $10 per barrel increase in the price of crude oil raises inflation by 0.2% and sets back economic growth 0.1%.”
The Administration has clearly failed to be truthful about its actions. The Maciver Institute takes Biden to task for his allegation that the oil industry is not using 9,000 drilling permits currently available. “If that number is correct (and it may not be since Fiscal Year 2021 data is not yet available), it would mean that a record-high percentage of active drilling leases are being used. According to Western Energy Alliance, an energy industry trade association, there are 37,496 leases in effect. If only 9,000 are not being used, then a record 76% of them are. In other words, the American oil industry is using more approved leases than ever before. One of the major reasons many are not being used is litigation by environmentalist groups trying to stop drilling. Western Energy Alliance alone is currently in court defending more than 2,200 leases—a full 24% of those that are not being used (because they obviously can’t be used while lawsuits against them are still pending).
The White House’s distinct lack of concern for the unnecessary economic suffering of the American people is deeply disturbing.
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