For years, progressives have advocated increasing the cost of gasoline and other fossil fuels via a “carbon pricing” scheme, but now that prices have spiked, President Biden is blaming Russia, begging communist dictatorships to produce more dirty fuels, and lying about the insanity of his own energy policy.
Earlier this week, President Biden blamed the record high gas prices on Russian President Vladimir Putin, calling never before seen numbers, “Putin’s price hike.” “Today’s inflation report is a reminder that Americans’ budgets are being stretched by price increases and families are starting to feel the impacts of Putin’s price hike. A large contributor to inflation this month was an increase in gas and energy prices as markets reacted to Putin’s aggressive actions,” he said in a statement. To quote President Biden himself, this is complete malarkey. Prices were rising at record rates long before President Putin launched his unprovoked war in Ukraine. Inflation hit the highest 12 month rate since 1982 in December 2021, up 7.0% after an already blistering 6.8% in November. Gas prices followed a similar trend. At the end of January 2021, the average price per gallon was $2.39, but by December it had risen to $3.27, an almost $.90 increase per gallon. Last week they spiked another $.80 to $4.10 and have risen even higher since then. It’s fair to say that some portion of this is the result of the war in Ukraine, but it is a complete fantasy (dare I call it a lie?) to suggest Putin is responsible for the entire spike.
This is especially true when you consider that increasing the cost of petroleum products has long been a key part of the progressive plan to combat global warming. For years, environmentalists have argued that we need to increase the cost of carbon to spur the transition from fossil fuels. As late as last October, the Brookings Institution was pushing for a “carbon price either through reconciliation or other legislation.” If you are unfamiliar with the term, “Carbon pricing is exactly what the name implies: imposing a price on carbon emissions to mitigate the negative externalities created by greenhouse gas emissions.” This price can be applied via an outright increase in the cost of carbon in the form of a tax or some kind of trading scheme, but either way they have specifically advocated increasing the costs of fossil fuels, from the gas you put in your car to the oil or natural gas you use to heat your home. So there is no mistake, the Brookings Institution concluded that “In considering how the U.S. can meet the targets set out by Biden, one fact becomes clear: the U.S. needs a carbon price.” At the time, they were also quite pleased that high-profile Democrat politicians such as Senate Finance Chair Ron Wyden and Senator Sheldon Whitehouse have “publicly supported the proposal” because “carbon pricing is the most basic and effective tool to reduce carbon emissions, as much of the world has already discovered.”
While President Biden himself has not explicitly endorsed his preferred approach to carbon pricing, he has supported the goal in principle. He said precisely that at the third and final President Debate in October 2020. Then-candidate Biden began his portion of the climate change topic by unequivocally declaring that “Climate change, climate warming, global warming is an existential threat to humanity. We have a moral obligation to deal with it. And we’re told by all the leading scientists in the world that we don’t have much time. We’re going to pass the point of no return within the next eight to 10 years. Four years of this man [President Trump] eliminating all the regulations that were put in by us to clean up the climate, to clean up– to limit the– limit of admissions [sic, emissions] will put us in a position where we’re going to be in real trouble.” He endorsed a plan at the time that would cost families up to $6,500 according to a Wall Street firm Biden himself cited. He further declared “We need other industries to transition to get to, ultimately, a complete zero emissions by 2025.” The resulting exchanging with then-President Trump is worth reading in full:
Trump: Would you close down the– Would you close down the oil industry?
Biden: I would transition from the oil industry. Yes.
Trump: Oh, transition.
Biden: It is a big statement because I would stop–
Welker: Why would you do that?
Biden: Because the oil industry significantly — but here’s the deal —
Trump: That’s a big statement.
Biden: Well, if you let me finish the statement, because it has to be replaced by renewable energy over time. Over time. And I’d stop giving to the oil industry– I’d stop giving them federal subsidies. You won’t give federal subsidies to the gas and, excuse me, to solar and wind. Why are we giving it to the oil industry?
Trump: We actually do give it to solar and wind–
Welker: All right, we have one final question–
Trump: That’s the biggest statement. In terms of business. That’s the biggest statement.
Welker: All right, we have one final question– Mr. President–
Trump: Because basically what he’s saying is he’s going to destroy the oil industry. Will you remember that Texas? Will you remember that Pennsylvania? Oklahoma? Ohio?
Welker: Vice President Biden, let me give you ten seconds to respond and then I have to get to the final question. Vice President Biden?
Biden: He takes everything out of context, but the point is, look, we have to move toward a net zero emissions. The first place to do that by the year 2025 is in energy production. By 2050, totally.
President Biden began to make good on that promise as soon as he got into office. He canceled the Keystone XL pipeline, suspended new oil and gas leasing and drilling permits on federal land until climate change impacts can be calculated, and slowed approvals on existing leases to a crawl. Forbes interviewed Stacey Morris, Director of Research for the data provider Alerian who said, “These executive orders were pretty well-telegraphed.” She identified New Mexico, Wyoming, North Dakota, and Colorado as states that would be impacted most and noted this would lead to more imports. Of course, she also claimed “The headline looks scary, but we don’t see any immediate impact from these executive orders,” leading Forbes to conclude this wouldn’t impact gas prices, which of course proved completely wrong. In 2020, the United States became a net exporter of petroleum for the first time since 1949. We exported approximately 8.51 millions barrels per day while importing 7.86 million. We also produced more than we consumed. Last year, however, imports surged to 8.47 million barrels per day while exports remained almost flat. We are still net exporter, but by a far lower margin. It should be no surprise that prices rose under these circumstances, leaving us extremely vulnerable to an unanticipated occurrence like the outbreak of a war in Europe.
Regardless of the precise impact of the war, one thing is clear: Our energy policy is insanely backwards. We are attempting to reduce the consumption of fossil fuels by making them more expensive, but consumption of these fuels is not dictated entirely by cost. It is instead dictated by need, as in people need to put gas in their cars, heat their homes, receive goods from Amazon and UPS, etc. These needs are fixed in the short term. The average person can’t simply switch to clean sources on their own. Driving up prices only risks a recession, which surprise, surprise, some are saying might happen as a result of gas topping over $4 per gallon. Think of it this way: Anytime someone objects to endlessly raising the debt ceiling, they are greeted by howls of outrage that this money has already been spent and we’re reneging on our promises. This is the same thing: The energy we need today and the mix we need for the short term is already spent. Driving up prices will not reduce it. They are working the wrong side of the equation, costing us money with no counterbalancing progress toward their stated goals.
If you are at all concerned about climate change and not simply impacting people’s wallets, you need to reduce demand for fossil fuels, not simply increase prices. This, of course, is much harder to do, but a couple of ideas come to mind. First, we should clearly encourage the work from home phenomenon forced upon us by the pandemic to continue perpetually. This not only improves quality of life, but also reduces demand for gasoline. Electric cars are often proposed as the answer to the question, but they can have limited impact if your electricity is generated by a coal fired plant. Nuclear is the only real answer in that regard, and the government should spearhead initiatives to replace old, dirty plants with new, state of the art nuclear plants. We should also consider incentivizing businesses that limit travel for essential purposes. Virtual should be the go to unless truly needed. Otherwise, there is little we can do except encourage continuous improvements in energy efficiency for new construction, appliances and other big ticket products, and industrial applications, plus focus on carbon capture any other technologies that reduce emissions.
Alas, it is easier to say what we should not do. Last on our list should be encouraging Venezuela and Iran to produce more oil to fill a gap we created. Even if you set aside the danger of dealing with terrorist regimes, they extract fossil fuels far less cleanly and with far more environmental impact than the United States. This should be obvious to anyone, but the Biden Administration is actively considering reducing sanctions against the communist dictatorship in Venezuela in an effort to acquire more oil. Even Democrat Senators like New Jersey’s Bob Menendez get this one right, “Nicolás Maduro is a cancer to our hemisphere and we should not breathe new life into his reign of torture and murder. As such, I would strongly oppose any action that fills the pockets of regime oligarchs with oil profits while Maduro continues to deprive Venezuelans of basic human rights, freedoms, and even food.” Perhaps nothing encapsulates the insanity of our energy policy more: The President and his party have openly discussed driving up fossil fuel prices for years. This has been one of their key objectives to combat global warming. In fact, they advocated it while prices were already rising. Now, however, they’ve suddenly discovered it’s a bad thing, but rather than unleash cleaner American energy and take steps to reduce demand, they are begging dictatorships to fill the gap with dirtier sources. I know I’ve asked this before regarding Ukraine in particular, but generally speaking, does this make sense to anyone?