Biden administration energy policy: let OPEC pump the oil
Rather than let US oil producers step in, the president calls on our nation’s adversaries.
President Biden’s the goal of ending oil production in the United States does not seem so straightforward at the moment. Gasoline prices are nearly a dollar a gallon higher than around this time last year, with oil prices barely the highest in seven years as demand started to pick up after COVID. And with energy being a vital input into nearly every aspect of modern life, higher prices for oil and gasoline are only fueling the inflationary fire this year.
But rather than let US oil producers step in, President Biden is calling. . . the OPEC oil cartel to pump more oil. Obviously, he wants other countries to do the dirty work of drilling for oil for him. And he is making his way.
Consider the facts: the oil will be pumped out and the money will flow, but to whom?
Establishing a market in which OPEC can profitably sell more oil effectively creates a market opportunity for OPEC Plus (of which Russia is a part) and Iran. The two countries pose a strategic challenge to America – a challenge that is, in large part, funded by the hydrocarbon wealth of those countries. Oil and gas sales fund about half of the Russian government in 2019. (Its revenue fell in 2020 due to COVID-19 but is positioned for a comeback in 2021.) The money is helping to secure it. aggression in Ukraine, in addition to cyberattacks on infrastructure in America and its allies, and emboldens the reckless behavior of autocrats aligned with Moscow in sensitive parts of the world.
Iran has huge oil and gas reserves, and in 2018 exports of these products accounted for a quarter of the government’s budget. Iran is using this money to sponsor terrorist organizations that threaten American allies, to send warships to the Caribbean to partner with Maduro’s Venezuela and, whatever the agreements say, to advance its nuclear ambitions. .
Giving OPEC Plus an opportunity to make more money is a headache. Russia and Iran would benefit from increased oil revenues; it would also help fund activities that created foreign policy problems for years. But perhaps that shouldn’t be too surprising given that President Biden has already canceled the Keystone XL pipeline while also giving the Russian Nord Stream 2 pipeline a boost – a move that will simultaneously increase Europe’s dangerous dependence. vis-à-vis Russian oil and financially hit Ukraine.
Biden would do better by letting U.S. oil producers extract more oil and gas in response to price signals. But so far its flaw has been meeting the needs of the climate lobby. The president’s administration has suspended some past permits and is seeking to block future permits to drill on federal lands (although these face legal difficulties), as well as use more stringent endangered species regulations. to obstruct drilling on private land. Reduced US oil production means higher oil and gasoline prices for everyone, Americans included.
Given the implications, if there was a time for the administration to reconsider its restrictive stance on fossil fuel production, this would be it. America has the long-term potential to produce more energy than it needs – and did so no later than last year. This is a benefit which, in an increasingly dangerous international environment, makes no sense for the United States to throw away. (That’s not to say, of course, that giving up such a benefit would befall regimes that don’t wish us well.)
Biden’s stance on fossil fuels stems from his broader climate agenda and, more specifically, obligations under the Paris Agreement – obligations he re-committed the United States to when he took office. But America has already been the world leader in energy-related emission reductions since its emissions peaked in 2005, according to data from the BP Statistical Review of World Energy. This is largely due to the increased use of natural gas compared to coal. Ironically, President Biden’s policies would slow down this transition and, by reducing production, make it more difficult for America to provide developing countries with this more environmentally friendly alternative.
But even under the Paris agreement, China wouldn’t be forced to cut emissions for many years, and Russia just isn’t interested in cutting emissions like it has pledged to do. (and could even increase its shows), giving them a free pass while America pays. Their investments in increasing the production and use of fossil fuels are a reminder that their actions speak louder than words. Why tie a hand behind your back when your opponent is fighting two of you?
Instead, “Oil for you, but not for me” is the message from the White House. The president appears to be content with giving OPEC and our opponents a leverage abroad rather than standing up to extremists in the climate lobby. In a way, President Biden gets a glimpse of the strategic situation his climate policies will place the United States in, but he doesn’t seem to be learning the right lessons. The fact that the result of his policy is to shift relatively clean US hydrocarbon production to much dirtier foreign competitors only serves to make his approach an environmental and strategic mistake.