Our nation is once again in a perpetual state of energy dependence. Twice now, the president of the United States has pleaded with the Organization of Petroleum Exporting Countries (OPEC) to come to the rescue of the American economy, and twice he has been snubbed. The most recent instance only confirms what everyone has known for nearly two years — the emperor has no clothes.
This week OPEC and its plus one Russia (OPEC+) announced they would curb production by 2 million barrels per day. This happened despite the Biden administration’s quid pro quo scheme to purchase OPEC barrels to refill the Strategic Petroleum Reserve (SPR) in exchange for a guarantee to not lower production. According to Goldman Sachs, we are likely to see oil prices return to $110 per barrel, and gasoline prices will likely return to $5-$6 a gallon nationally.
It’s understandable to see this announcement as a betrayal by OPEC, but the real betrayal is the Biden administration’s actions in weakening America’s energy independence and dominance. America should never be put in a position where our energy policy is dictated by foreign nations. Under our leadership in 2019, the U.S. achieved energy security when we became a net energy exporter for the first time in 67 years.
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That all came to a grinding halt when the Biden administration took the reins of the American economy. Since day one, when American energy producers were struggling to come up for air from the devastation of the pandemic, the Biden administration tied cement blocks to their legs by canceling the Keystone XL pipeline, layering regulatory red tape, and empowering excessive litigation aimed at killing new energy infrastructure development — and he did it all while pointing the finger at American companies and accusing them of price-gouging and war profiteering.
Biden has begged the Saudis to boost oil production to no avail. FILE: Saudi Crown Prince Mohammed bin Salman fist bumps U.S. President Joe Biden upon his arrival at Al Salman Palace, in Jeddah, Saudi Arabia, in July 2022.
(Reuters)
American energy producers used to be the world’s largest swing producers — a mighty force able to counteract the price-fixing measures of foreign cartels like OPEC+. Today, however, the Biden administration prefers to fight fire with surrender.
Rather than correct his many mistakes in regulating American energy to the brink of extinction, the administration has fecklessly deployed its own price-fixing tools, flooding the market with America’s strategic oil reserves. And if 260 million barrels wasn’t enough, the Biden administration is now set to release another 10 million barrels next month — an announcement just in time for the U.S. midterm elections.
And where are we today? Although down from their summer peak, the price at the pump is still $1.49 higher than when Biden took office. That’s a 62% spike over what was on his first day. In fact, gasoline prices currently sit at nearly the same level as the period immediately before Putin invaded Ukraine. The inescapable logic is that global geopolitical turmoil is not the only reason for high prices. Biden’s strategy of foreign dependence is making America extremely vulnerable and threatening to drive the American economy off the cliff.
And high prices are not the only source of vulnerability for America. The SPR is at a near 40-year low, having been drained by the Biden administration by 34 percent. Moreover, this number doesn’t account for the total promised to be released by the administration. When all is said and done, the SPR will be at its lowest levels since 1983 — a total depletion of 42.5 percent.
Moreover, America’s stockpiles of transportation fuels like gasoline, diesel, jet fuel, and, of course, critical heating oils are also at record seasonal lows not seen since 1996. This doesn’t bode well for a nation that has lost over 1 million barrels of refining capacity under the Biden administration.
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Before we deflect blame toward OPEC, we should get our house in order. Consider that, according to the economists Stephen Moore and Casey B. Mulligan, had the Biden administration not repealed the Trump administration’s pro-growth policies, America would be producing around 2 to 3 million barrels more than we currently are, and U.S. GDP would be increased by $100 billion per year. Those are precious barrels and revenue Americans can’t afford to leave off the table.
Unfortunately, the build-nothing Biden administration has never thought to look to American energy. Instead, they run to foreign governments for energy, like Venezuela. The irony is that Venezuela itself is an OPEC member. At the same time, the administration is considering a ban on energy exports — a move that would slash American GDP by $44 billion and kill 85,000 American jobs in 2023. But don’t worry, that’s all part of the green plan — it’s certainly difficult to assume otherwise.
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If that wasn’t enough, some Democratic members of Congress are proposing to remove U.S. troops stationed in Saudi Arabia and prohibit future defense assistance to a strategic ally. What the Biden administration and the congressional left forget is that Saudi Arabia is not our gas station; we have our own resources under our feet.
I can only imagine how difficult it will be for the Biden administration and Democrats to defend its ineptitude and track record of policymaking as we approach midterms in November.
